Chamber and committees

So there is a possibility that there could have been a pre-emptive strike. The 2021-22 Scottish Government pay policy guidelines stipulated a minimum 2 per cent pay increase for public sector workers who were earning between £25,000 and £40,000, and it was 1 per cent for those who were earning between £40,000 and £80,000. The payment of a 17.5 per cent bonus was therefore, in anybody’s terms, a significant deviation from the Government’s pay policy.

I want to pick up on that point before I bring in Bill Kidd. To go back to the framework agreement, Joanne Brown, you said that it was 12 to 18 months in the making. On pay, the framework agreement talks about maintaining

“regular dialogue with the SG Finance Pay Policy on any proposals with an expectation that these will be broadly consistent with the provisions of SG Pay Policy and Staff Pay Remit. Any significant deviations will require further approval.”

Was that iteration in circulation at the point at which the turnaround director drafted a paper that was approved in February 2022, just a month before the framework agreement, including those clauses, was introduced? Was it a pre-emptive strike by the turnaround director?

You used—advisedly—the word “reviews”, plural. It is a little bit confusing, and perhaps in the realm of bewildering, that there could be more than one review with, presumably, broadly similar terms of reference. Aspects such as a business plan for the yard, what can be done to give it a sustainable future and what the market looks like are, presumably, part of the research that an organisation such as FMI would carry out. Why would there not be just one review to be signed off by both FMPG and the Scottish Government?

Auditor General, you spoke about ambiguity and the framework agreement not being as clear as it might have been. How should the sponsorship team’s relationship with an NDPB such as this be, when presumably not insubstantial amounts of public money—£10 to £15 million—need to be committed? Does it come as a letter of comfort at the end of the process or should there not be some kind of prior sign-off by the sponsorship team or the minister or whoever to allow the expenditure to be committed? We have heard that before in other circumstances around the contract.

Good morning. I welcome everyone to the 12th meeting in 2023 of the Public Audit Committee. The first item on our agenda is a decision on whether the committee will take agenda items 3, 4, and 5 in private. Do we all agree to take those items in private?

Members indicated agreement.

Thank you very much. I will begin by going back to what has been a recurring theme in relation to the delivery of those two vessels, which is cost overruns. In particular, I want to ask about paragraph 13 of the report, in which you draw attention to the fact that, during October to mid-December 2022, Ferguson Marine Port Glasgow made expenditure commitments of between £10 million and £15 million more than the Scottish Government had allocated. I guess the obvious question is: how could that be? Was it appropriate, and where was the sponsorship team of the Scottish Government during that?

Auditor General, you couched the situation in terms of there being a tension between the fact that Ferguson Marine is a company limited by guarantee and that some of its governance is dictated by the Scottish public finance manual. There was a report in a national newspaper today about the commissioning of some consultancy work to scope what needs to be put in place for the company to thrive in the future. The article suggests that the organisation that is carrying out that work—First Marine International—requested a non-disclosure agreement on its report. Initially, the Scottish Government said that there was no NDA, but it has now accepted that one is in place, and there is talk about commercial sensitivity.

We all understand that there will be some commercial sensitivity, but there is also a public interest, and there must be a way through that that would allow as much as possible of the report to be in the public domain and subject to scrutiny. Are you aware of that and do you have any reflections on it?

Thank you. That is a very clear message.

Craig Hoy wants to bring up further related matters.

We have received apologies from Colin Beattie. I welcome Bill Kidd to the committee.

Thank you very much indeed. You mentioned the committee’s priorities, so I am bound to ask this. Last week, we published a report on the construction of ferries 801 and 802. In that report, we made some recommendations on work that we thought that it would be useful to be included in your work programme, recognising that we cannot instruct you to do anything. Those recommendations were about the procurement of the vessels and what we thought would be a useful forensic analysis of the money that was paid over to Ferguson Marine Engineering Ltd. Have you had any time to consider that? How do you plan to give that consideration?

Secondly, on a broader point, something that is not explicitly mentioned in the work programme papers that we have seen is the discussion about the business investment framework that was published last year by the Scottish Government. The committee has some ideas about how that could be improved, and we have had some useful discussions in public evidence sessions with you about that, especially around the Scottish Government’s consolidated accounts.

Could you give us some reflections on those points?