New bid to lift ScotGov confidentiality lid on ferry costs

MSPs are making new attempts to remove the Scottish Government confidentiality veil around the full costs of the ferry fiasco – through an appeal to the new wellbeing economy secretary Màiri McAllan.

Among the concerns being raised is over the Scottish Government entering 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 also come under scrutiny for steadfastly refusing to spell out the extra costs involved in continuing to complete one of the two wildly delayed and over-budget ferry fiasco vessels which they admit is not value for money.

A Scottish Government 'value for money' 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.

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

But the previous wellbeing economy secretary Neil Gray gave a rare shareholder authorisation known as a 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".

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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".

A similar shareholder authorisation in the form of a letter of comfort was made as the Scottish Government forced the awarding of the disastrous ferry contract to the then Jim McColl-led Ferguson Marine in October 2015 despite concerns from state-owned ferry owners and buyers, Caledonian Maritime Assets Limited that there was no mandatory builder's refund guarantee.

The Scottish Government has blocked all 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.

It later used another loophole that claims exemption because its disclosure would cause "substantial prejudice to the effective conduct of public affairs" in a move that is being challenged.

Richard Leonard, convener of the Public Audit Committee that is examining arrangements around the delivery of Glen Sannox and Glen Rosa, has told Ms McAllan that where the board of a company wholly owned by ministers consider it necessary to seek and receive shareholder authorisation, such occasions "should be a matter of public record".

Mr Gray had said that "no decision has yet been taken on whether the broad principle of publishing shareholder authorisation can be accepted".

And Mr Leonard told Ms McAllan that the committee "seeks confirmation of when a decision on publication will be made".

In his most recent response on NDAs, Mr Gray said that one was signed "in preparation for confidential information being shared ahead of a contract award relating to [a] due diligence report on the costs for vessels [Glen Sannox and Glen Rosa].

The remaining nine NDAs as of January remain active and relate to "ongoing commercially sensitive work".

Mr Leonard said that means that no information was shared.

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He has now told Ms McAllan: "In the interests of openness and transparency, the committee seeks a commitment from the Scottish Government that it will publish as much information as possible about each of these NDAs, at the earliest opportunity."

The two ferries being built at the Inverclyde shipyard were due online in the first half of 2018, with one initially to serve Arran and the other to serve the Skye triangle routes to North Uist and Harris, but are at least six years late. It has been confirmed that both are now to serve Arran.

Glen Sannox, launched by Nicola Sturgeon nearly seven years ago, is not expected to be ready for passengers till August at the earliest.

Glen Rosa was meant to be delivered to CalMac in August 2018, but that is currently scheduled to be completed in May 2025 – meaning it would be ready for passengers the following August.

The dates of arrival and the costs have been in a constant state of flux as construction has been plagued by design challenges, cost overruns and delays.

In the midst of the delays and soaring costs, Ferguson Marine under the control of tycoon Jim McColl fell into administration and was nationalised at the end of 2019 with state-owned ferry owners and procurers Caledonian Maritime Assets Limited (CMAL) and the yard's management blaming each other.

Ministers have also been criticised for apathy over a six-month failure to sanction a full forensic probe into the cost of Scotland's ferry fiasco.

Nearly six months ago, the Scottish Government was told to make a ministerial order to kickstart an Audit Scotland investigation into what happened before Ferguson Marine was nationalised.

A ferry user group official said that "it made no sense" for the Scottish Government not to be transparent about the costs of the ferries.

"It does not make sense to be at least open about the cost differential between going ahead with Glen Rosa against starting from scratch if it has failed a value for money test," he said. "What has the Scottish Government got to hide on that?"

Notification of the 'written authority' came in May last year from Gregor Irwin, the director general of economy for the Scottish Government who is designated as the 'accountable officer' for the Scottish Government's investment in Ferguson Marine.

The Scottish Public Finance Manual, issued by Scottish ministers to provide guidance on the proper handling and reporting of public funds, states that the accountable officer has a "personal responsibility for the propriety and regularity of the finances under their stewardship and for the economic, efficient and effective use of all related resources".

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Accountable officers are personally answerable to the Parliament for the exercise of their functions.

Under Section 15(8) of the Public Finance and Accountability (Scotland) Act 2000 (the Act), an accountable officer can obtain written authority from Scottish ministers if they consider that an action they are required to take is “inconsistent with the proper performance of the functions” they carry out.

The officer is required to provide copies of the request for the authority and the authority itself to the Auditor General for Scotland and the clerk to the Public Audit Committee.

A Scottish Government spokesperson said: 'Non-disclosure agreements are deployed to enable the exchange of commercially sensitive information between parties.

“Publication of this material could hamper Ferguson Marine’s ability to win future contracts and as such is not in the interests of the company, its employees or the taxpayer.

“The Scottish Government is committed to being as transparent as possible in relation to decisions around Ferguson Marine and the construction of the two ferries, while protecting the company’s ability to operate in a highly competitive market.”