Chamber and committees

Auditor General, you will be aware that the vessels were supposed to cost under £100 million—that is, for both. The latest figure, back in March, was £300 million. My suspicion is that it might have gone up since then, given the further problems that have been encountered at the yard. You do not state that that does not sound like value for money, but you allude to it. Is that your assessment?

From a public expenditure point of view, if that £100 million becomes £350 million or £400 million, is there not a risk that costs will endlessly spiral? Is there a mechanism for intervening and saying, “Look—you can’t just keep chucking money at something endlessly”? Those figures seem to show massive jumps, not little increments of overspend, so when you look at budget versus what is actually being spent—when things are going massively over budget, by hundreds of millions of pounds, in a very short space of time—what is the cut-off?

I look forward to that.

At this point, I have to ask you to help me to understand what is reasonably complex auditing language, and to put it in layman’s terms for politicians and the wider public who, perhaps, are not qualified in that regard. I am looking at exhibit 2, which is about the specific strategic commercial assets—that is, Glasgow Prestwick Airport Ltd, Ferguson Marine (Port Glasgow) Ltd and, of course, the Liberty Steel smelter and Burntisland Fabrications Ltd. I wonder whether you can help me to understand what you are reporting there, given the strong interest that this committee and others have shown in the matter for a number of years.

Each of the entities will have a perceived value, as the Government has stated that there is an intention to return them to private ownership in the future. Alongside that, though, there is the issue of the money that has already been invested by the public purse in those businesses, normally by way of loans, some of which appear on the balance sheet in the consolidated accounts. Can you talk us through what you are seeing at the moment? What is the bigger picture with those assets? Shall we start with Prestwick?

To put it in simple terms, what rationale would the Government present for the increase in the numbers? The value of Prestwick has doubled whereas, for Ferguson Marine—albeit that it is a small percentage of the money that has been invested—the £304 million that has been invested now sits at a value of £94 million, which is less than a third. What factors are you seeing that give you comfort that those are true and accurate assumptions?

This is reminding me of “The Antiques Roadshow”, because things are only worth what someone is willing to pay for them. How do you marry that with the value of the loans in the consolidated accounts? At what point would you, as auditor general, say that the Government is not being realistic about the opportunity to recover its investments? It could very well just say up front, “Look, we’re going to write these assets off, because we don’t expect any future owner of the assets to give us any of the money back.” Is there some pretence that it might get some of the money back, and this is just a risk assessment of how much it might recover? It just sounds like a very subjective approach to what has been invested and how much might be lost.

I see from your report that, as of the end of March this year, the total outstanding capital borrowing was £1.76 billion, and the amount that was borrowed for capital projects was less than the cap. Therefore, there is still a bit of wriggle room, so if the Government wanted to borrow more money for capital projects, more money would be available.

That is helpful feedback. You mentioned the concept of borrowing. We are frequently told that the Scottish Government has no ability to borrow money, but can you talk us through the national loans fund and how that is used? The presumption is that the Government cannot get itself into debt per se. However, it has an ability to borrow when that is required. Where does that money come from and what can it be spent on?

There might be some disparity in the figures. I am just quoting from the Auditor General’s report, which quotes directly from the Scottish Government’s figures. The Scottish household survey was last published on 23 December. I appreciate that another one is probably coming out soon, and it may show that that figure of 91 per cent has gone up; I hope that it does.

Notwithstanding that, having technical access is not the same as having the knowledge to use what you can access. It remains a fact that 15 per cent of our population lack basic foundation digital skills. The number of people who have the skills to use high-speed internet is disproportionate, relative to the number of people who can access high-speed internet. What work are you doing to benchmark that against other parts of the UK or countries in the Organisation for Economic Co-operation and Development region of which we are a part?

Why do one in 10 households in Scotland still have no access to the internet?

I will have to choose between the two questions that I had shortlisted, but that is fine. I will ask about rural connectivity, which is an important area and one that is of particular relevance to Scotland. The report hones in on it in a whole section and particularly in paragraph 21, on coverage in urban areas versus rural areas.

On the back of what Geoff Huggins said, I appreciate that getting to the last couple of per cent of people is always the most difficult and often the most expensive as well, from a technical, physical and logistical point of view. However, I am aware of the Scottish and UK Government schemes and the work in the private sector. Lots of activity is taking place on things such as the broadband voucher scheme, the shared rural network and so on. Can you give me an update on the progress on that? When do you think you might hit 100 per cent to ensure that rural communities have access to 4G and broadband that is as good as the access that urban communities and cities have?