Chamber and committees

Okay. This is an observation, more than anything—I am not necessarily criticising the presence of the division—but 40 people is a lot of folk. Really, there are only two strategic commercial assets that are wholly owned by the public, and another two that have had public financial intervention. Therefore, it is not a huge portfolio to manage—if that makes sense. We often hear that those are independent self-managing organisations with their own executive management teams, directorships and reporting mechanisms. The question, then, for a future date is whether this is just overkill or the division is doing its job effectively. I understand that the division is a response to your recommendations.

Here is the conundrum. If the accountable officer identifies that there will be a fairly substantial additional cost and that, in their view, the project does not represent value for money to the public, yet ministers decide, as is their prerogative, to put more money into that project, what is your role in that process? Clearly, a process is being followed, but it is not necessarily leading to a good outcome in terms of value for money. What are you looking to see from the Government should there be further cost overruns?

Good morning. I have a broad range of areas to cover. I will start by taking us back to something that Carole Grant said about outstanding accounts from 2022-23 that are still to be produced, published and made available. In correspondence from the chief financial officer just last week, we received a summary of the final outturn for 2022-23. I want to have a quick look at that, because it is relevant to this year’s consolidated accounts. Does that financial outturn take into account best guesstimates for those departments that are yet to report? Is it your understanding that there may be another version of the final outturn—a final final outturn, if you like?

It would probably be helpful to do that. Before I start talking about this, I presume that it is all in the public domain. I am looking at page 13 of the correspondence from the chief financial officer, rather than at your report, but it is relevant. If you do not have that, we can look at it some other time.

I imagine that the same will be true when we have the conversation about 2023-24. What are you looking for when you see huge underspend figures in the final outturn?

That is diplomatic.

The point that I am making is that we hear evidence of projects being put on hold, reprofiled or moved into future years to make ends meet, as is required of Government, and we hear about moratoriums on new capital investment. It is right for the public to ask us why schools or ferries are not being built and why hospitals are not being replaced when we are producing bits of paper that show £0.5 billion of underspend in the final outturn. I appreciate that the answer probably lies in complex accounting, but that straightforward question is asked of Parliament, which is why I raise it.

While we are on the issue of commercial assets, I might well jump ahead to the issue of Ferguson Marine and the assets in that respect. Your report specifically picks out MV Glen Rosa and MV Glen Sannox. The estimate for completing the vessels still sits at around £300 million. I think that that is your understanding, too, but in your report you make some criticism of the due diligence process with regard to value for money. Can you talk us through your concerns?

That is really helpful. Perhaps those are questions for Government departments to answer in the future.

I will move the conversation on to strategic commercial assets, on which your report helpfully provides some analysis. The strategic commercial assets division is a fairly new venture, in governance terms. My understanding is that it employs around 40 staff and spends a considerable amount of money on external consultants. I use the word “considerable”, which is subjective. It spent £1.6 million last year. Is there any indication of the cost of that operation to the Government? In your opinion, does it represent good value? It is a fairly new set-up.

I guess that that is the question. We know the total value of money invested from the public purse and we know what it was thought might be recoverable, or what the value of the loan was, which is not necessarily the value of the business itself. That would be a whole other conversation. That value seems to have jumped up massively. Are you confident that there is sufficient rationale for what is almost a doubling of the recoverable value of the loans?

I look forward to that work, if it occurs.

It is interesting that you picked up on local government. That is the only line in the accounts that seems to suggest an overspend—of £5 million. Every other budget line that has been presented to us has a considerable underspend, totalling £509 million—half a billion pounds. Is that normal? I am new to the committee, but a £0.5 billion underspend, in the final outturn versus the budget, seems like an awful lot of money.