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Public Audit Committee
Meeting date: 8 September 2022
Richard Leonard
Well, the vessels are five years late and two and a half times over budget, so maybe that is a reason why you should reflect on it.
I will bring in Willie Coffey.
Public Audit Committee
Meeting date: 8 September 2022
Richard Leonard
Good morning. I welcome everyone to the 21st meeting in 2022 of the Public Audit Committee. The first item on our agenda is a decision on taking business in private. Do members agree to take agenda item 3 in private?
Members indicated agreement.
Public Audit Committee
Meeting date: 8 September 2022
Richard Leonard
The second item on our agenda is consideration of the Auditor General for Scotland’s section 23 report entitled “New vessels for the Clyde and Hebrides: Arrangements to deliver vessels 801 and 802”. I welcome David Middleton, who is our first witness this morning. In 2015, he was the chief executive of Transport Scotland.
David, the committee appreciates that time has elapsed since you left your role at Transport Scotland. However, you were the most senior official at Transport Scotland when key decisions to award the contract to Ferguson Marine Engineering Ltd were made, and there are questions that we need to ask and that we need you to answer. Before we proceed to questions, I invite you to make a short opening statement.
Public Audit Committee
Meeting date: 8 September 2022
Richard Leonard
Thank you, Mr Middleton—we appreciate that. The deputy convener of the committee, Sharon Dowey, has questions to put to you.
Public Audit Committee
Meeting date: 8 September 2022
Richard Leonard
And on 25 August as well.
Public Audit Committee
Meeting date: 8 September 2022
Richard Leonard
We have minutes that CMAL submitted to us that show that.
Public Audit Committee
Meeting date: 8 September 2022
Richard Leonard
Based on what you have just said, I am a bit confused, because the papers for the CMAL board meeting on 25 August referred to the problem with the builders refund guarantee. That is item 13 on the agenda for that meeting, at which Transport Scotland officials were present. Surely you, as the accountable officer, would have been aware of that major stumbling block.
Public Audit Committee
Meeting date: 8 September 2022
Richard Leonard
I suppose that the critical point is about the language used. Mr Brannen told us that it would be a decision “entirely” for the transport minister, but the evidence appears to suggest otherwise. Do you have any final comment on that?
Public Audit Committee
Meeting date: 8 September 2022
Richard Leonard
I will begin by asking you about something quite particular in the written evidence that you submitted to us on 23 June. My question concerns events on 31 August 2015, when an announcement was made that Ferguson’s was being awarded preferred bidder status. In your written submission, you said:
“Press release and coverage at the time would have stated the award would be subject to ongoing negotiations, therefore I do not believe the announcement would have undermined CMAL’s negotiating position.”
However, the BBC piece, which the First Minister tweeted, quoted her as saying:
“This is an excellent result for Ferguson Marine Engineering Limited and I am delighted to name them as preferred tenderer for the contract”.
She also said:
“This contract will see the 150-strong workforce retained and more staff taken on at the shipyard”.
On that date, you said:
“This is a significant investment that proves Scottish shipbuilding can succeed in a competitive market”.
There is no suggestion that it was anything other than a done deal.
Public Audit Committee
Meeting date: 8 September 2022
Richard Leonard
Okay. So you were back from annual leave on 31 August, but you were not at Port Glasgow?