Ministers use new legal loophole to block reveal of ferry costs

Ministers have moved the goalposts as it continues to block disclosure of the full cost of the ferry fiasco – having sought legal loopholes to block the release of vessel construction updates.

The Scottish Parliament's Public Audit Committee has been continuing to try to break down the confidentiality veil around the affair after The Herald revealed that the Scottish Government entered into ten gagging clauses with external private companies concerning the state-owned and publicly funded shipyard firm Ferguson Marine at the centre of the fiasco.

Ministers have come under fire for refusing to spell out the extra costs involved in continuing to complete one of the two ferry fiasco vessels which they admit is not value for money.

A Scottish Government due diligence review supported by a secret analysis by consultants Teneo said it would be cheaper to scrap the ship still being built at Ferguson Marine and place a new order elsewhere.

But the wellbeing economy secretary Neil Gray gave a rare written authority in May to plough ahead with supporting the delivery of the two ferries at Ferguson Marine in May, saying it is the "platform upon which future success can be built".

It is understood the Teneo report is subject to a non-disclosure agreement (NDA).

The Scottish Government has blocked information over the costs that led to Mr Gray's written authority citing that it was exempt in terms of the Freedom of Information Act – because its release would result in "substantial prejudice" to its commercial interests.

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He said that non-delivery of the ferries at nationalised Ferguson Marine (Port Glasgow) would put the very future of the yard and the jobs it supports "in jeopardy".

The public audit committee convener Richard Leonard has told Mr Gray that "there is no such caveat regarding commercial confidentiality in the Scottish Public Finance Manual for the publication of written authority."

He told Mr Gray: "It therefore seeks to establish why the Scottish Government considers there to be issues of commercial confidentiality when it comes to publishing occurrences of shareholder authorisation for companies wholly owned by Scottish ministers."

The Herald can reveal that, in response to our challenge to the Scottish Government's stance over the blocking of information relating to the costs around the value for money assessment, it is now no longer relying on its previous stance that any publication would cause substantial prejudice to Ferguson Marine.

Instead, they are using another loophole that claims exemption because its disclosure would cause "substantial prejudice to the effective conduct of public affairs".

In a defence of its position, the Scottish Government has said: "It is essential that the Scottish Government can continue to have a productive relationship with companies like Ferguson Marine, who run businesses of national and local importance to Scotland.

"Ferguson Marine has not consented to the disclosure of the information and as such, disclosure would be likely to undermine trust in the Scottish Government. In turn it makes it likely that this, and similar businesses, would be reluctant to engage with the Scottish Government on such matters in the future to the detriment of the Scottish economy and employment. Therefore, disclosure of the information will substantially prejudice the Scottish Government from taking similar action to secure the future of employers and jobs.

"We recognise that there is a public interest in the release of this information as part of an open, transparent and accountable government and to inform public debate. We also recognise the public interest in the shipyard, and in how the government works with companies such as Ferguson Marine where public funds are involved.

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"However, given the importance of the shipyard to Scotland, we believe that this is outweighed by the public interest in maintaining a productive relationship between the Scottish Government and Ferguson Marine. It is of vital importance to Scotland, and the people of Scotland, that the Scottish Government can intervene to protect jobs and the wider economy.

"The public interest lies in protecting some sensitive information in the service of allowing future interventions. Ultimately, the aim of this intervention was to protect jobs, and it is clearly in the public interest to withhold information that will jeopardise any similar future proceedings."

There have been further concerns registered by some MSPs that the publication of the progress updates by Ferguson Marine, government-owned ferry owning and procurement agency Caledonian Maritime Assets Ltd (CMAL) and Scottish Government's monthly updates over progress over the beleaguered ships has stopped.

The Scottish Government has been blocking publications of updates for months, citing a loophole in the Freedom of Information (Scotland) Act.

The Scottish Government nationalised Ferguson Marine at the end of 2019, after it fell into administration under the weight of the soaring costs and delays – with the shipyard firm and CMAL blaming each other for the problems.

Mr Gray's due diligence approval heralded the sanctioning of an extra £72.6m in capital spending on the ships. That was made up of £15m approved in December, last year and a further £57.6m for 2023/24.

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Ministers have also been asked to explain the use of the non-disclosure agreements by Ferguson shipyard as calls are made for further investigation into the firm under the ownership of tycoon Jim McColl who won the ferry contract.

The public audit committee convener Richard Leonard has asked for the reason the NDAs were required, the private company that was involved and the date on which it was entered into.

The TaxPayers' Alliance, which campaigns against public money wastage, said the NDAs "appeared to be unusual" and said people would be "shocked by the unusually aggressive nature of this cover up".