Doubts over ferries' costs, the future of Ferguson Marine shipyard and unacceptable bonus payments

The 2021/22 audit of Ferguson Marine Port Glasgow (Holdings) Limited

Uncertainty remains over the final costs and completion dates of two delayed lifeline ferries, Glen Sannox (801) and vessel 802. Concerns have also been raised over the payment of performance bonuses to senior managers at Ferguson Marine Port Glasgow.

In total, the two vessels are currently estimated to cost £293 million, with delivery already five years late. Despite additional Scottish Government funding in 2022/23 and 2023/24, the latest estimates suggest there is around £9.5m of funding required for the ferries beyond the amount already approved – this needs to be considered as part of future budget processes. There is also doubt about the longer-term viability of the Ferguson Marine Port Glasgow (FMPG) shipyard, despite sustained investment by the Scottish Government.

The Scottish Government has assured FMPG there will be financial support for at least another year, enabling delivery of vessels 801 and 802. Approval for this is needed from the Scottish Parliament. Further investment in the shipyard and workforce are also needed to help secure future contracts. The Scottish Government has commissioned an independent review of future options for the Ferguson Marine shipyard which is due to report shortly.

Auditors have raised concerns over £87,000 of performance bonus payments to senior FMPG managers during 2021/22. It is not clear how their performance was assessed, nor were appropriate frameworks and governance in place. FMPG should have sought Scottish Government approval for the payments.

Stephen Boyle, Auditor General for Scotland, said:

It is deeply concerning that the costs to complete these ferries have continued to escalate, whilst the island communities these boats are meant to serve remain significantly impacted.

Despite substantial sums of public money being invested, there is still no certainty over how much the ferries will cost, when they will be ready or whether the shipyard has a viable future.

It is unacceptable that performance bonuses were awarded to senior managers at the shipyard, without proper governance for such payments. The Scottish Government needs to make sure its rules over pay are followed by this public body.