Chamber and committees

I will ask about the general application of quality standards. That is a recurring theme, as we all know, but in this case, they apply to the shipbuilding industry. Over many years, the committee has heard about the importance of thorough planning and design at the outset of any project, whether it be a piece of software, a bridge or vessels, as in this case.

On page 25 is your report, you say that Ferguson started building the vessels before the designs were agreed with CMAL, which led to substantial reworking being required, with

“increased costs and delays”

and

“no link to quality standards.”

Those are the words in your report.

Why was that allowed to happen at the outset? Surely nobody would start building something before they knew what they were being asked to build. Do such failures mean that there was little prospect of a successful construction outcome further down the line?

Thanks very much, convener, and madainn mhath to the panel from NHS Highland. I start by reminding everyone that when a health board comes before the Public Audit Committee it is usually because of Audit Scotland knocking on the door and this Scottish Parliament committee having a look at matters.

To your great credit, you appear to have turned your finances around. However, my question is, how can there be such a transformation on finances with no impact on healthcare, or the public’s perception of it, in NHS Highland? You said that nothing of significant concern resulted from that. If you do not mind, please tell us how that can be.

My questions relate to the application of quality standards in design and construction, Auditor General. As you and members are well aware, that is a common theme at the committee over many years.

The Rural Economy and Connectivity Committee took around a year to carry out its inquiry into the matter and its findings were published in December 2020. Its report, which has more than 100 pages, is full of commentary, conclusions and recommendations. Your report came out in March this year. Did you, in your analysis of the situation, make any substantive new findings compared to what the committee reported in its inquiry?

I was just coming to that particular issue. Paragraph 50 of the report says that “CMAL could only advise” and not require Ferguson to alter its approach to design and construction. I have never heard of a quality standard worth its salt in which the customer cannot instruct the builder to carry out its wishes.

What then emerged were these owner observation reports that members will have read about in the various documents. In quality management parlance, these are change requests, which are common in any other effective quality standard. However, according to your report, there were 346 such reports, only half of which had been carried out by the time Ferguson went into administration. Was the scale of that particular outcome unusual in your experience? Was it a symptom of the failure to agree in advance the designs of this peculiar construction, effectively meaning that everyone paid the price later on in the project?

Looking ahead, are you confident, and can you give the committee an assurance, that you can continue to make the savings that you are making and that, after the pandemic, you can continue to deliver the quality and level of care that the public in the NHS Highland area expects?

This is my last question for the moment. Again, it is on the quality issue, which is crucial and goes to the heart of much of all this. In paragraph 62 of the report, you mention that

“the quality of fabrication was not acceptable”

and that

“vessel parts were not being built to the correct specification or standards.”

In paragraph 138, you report that Ferguson had installed

“1,400 cables that ... were too short”

and that, following a survey by the newly appointed turnaround director, all of them will have to be replaced, which will lead to more expense and more delay. The report notes that there are more than 8,000 remaining cables still to go in.

I simply ask this: who on earth sanctioned the installation of cables that were too short to do a particular job? Why did nobody spot that early on, at the outset? Why did it take a new director to come in to suddenly discover that? In your view, Auditor General, does that not point to incompetent management and construction processes from the outset?

So it was not noticeable until late on the process that the cables in the vessels were too short.

Thank you for that, Pamela. That is very encouraging. Tapadh leat.

Do you engage directly with the public? If you are saying, “We used to spend all this money on delivering this care and we no longer do that”, does that have an impact, or are you still able to deliver the same level and quality of care through the transformation process that you have embraced as a result of the Audit Scotland report and the Public Audit Committee’s interest in the work that you do?

Sorry, Antony—I just want to come in here. Did Ferguson dispute that the cables were too short?