Chamber and committees

Agenda item 2 is to continue our inquiry into the Audit Scotland report on the Scottish Government consolidated accounts.

I welcome the Auditor General for Scotland, Stephen Boyle, who joins us in the committee room. I am delighted to see you here, Auditor General. Joining him from Audit Scotland online are Michael Oliphant, who is audit director, and Helen Russell, who is a senior audit manager of audit services. They also joined us for last week’s meeting.

Before I continue with questions on the consolidated accounts, I will ask the Auditor General, given that Audit Scotland and the Accounts Commission produced an overnight report into social care, to elaborate on the principal lessons from it. Of course, the committee will turn to in-depth discussion of the subject at some point in the future. The thing that struck me about the report was the paragraph that said, in relation to a national care service:

“Regardless of what happens with reform, some things cannot wait. A clear plan is needed now to address the significant challenges facing social care in Scotland based on what can be taken forward without legislation, which could provide strong foundations for an NCS.”

Auditor General, do you want to say a few words about the report?

Thank you, Auditor General.

We will press on with the committee’s questions about the audit report on the Scottish Government consolidated accounts. People who are joining us remotely should type R in the chat function if they want to contribute. Auditor General, as you know, if you want to delegate an answer or ask your colleagues to come in to develop particular answers, we are keen that you do so.

I turn to the section in the report around the Scottish Government’s strategic approach to investment in private companies, and I invite Sharon Dowey to open the questioning on that.

Craig Hoy has some questions that follow on from that.

Other companies that are covered in the report are Ferguson Marine (Port Glasgow) Holdings Ltd and Burntisland Fabrications Ltd—BiFab. You told the committee previously that you plan to publish a comprehensive audit report into how things are going with Ferguson Marine. Is that on schedule?

Okay. I will switch from the Clyde to the Forth and ask about BiFab, which is also covered in your report. What are the Scottish Government’s total confirmed and potential losses in relation to BiFab?

The minister told Parliament yesterday that

“The note in the consolidated accounts for 2020-21 was merely a technical assessment of a range of credit risk scenarios, which is an accounting standards requirement.”—[Official Report, 26 January 2022; c 21.]

You are describing something that is a bit beyond that, are you not?

I am sorry, but we cannot hear Mr Kenny. I do not whether he has muted himself or whether we have muted him at this end.

Are you going to provide us with a translation, Mr Beattie?

I presume that if the business is sold on, it will be possible to recover some of that funding.

I turn to another aspect of the report, which is the arrangements between the Scottish Government and GFG Alliance Ltd in relation to the Lochaber aluminium smelter. There is particular reference to the power-purchase agreement, which has been the subject of some interest. Could you explain to us the implication of quadrupling from £37 million to £161 million that provision in the accounts? What does that mean?