SERIOUS concerns have been raised over the "poor" governance and decision-making at a Scottish Government-owned shipyard.
In a report published on Tuesday about the publicly owned Ferguson Marine Port Glasgow (FMPG) shipyard, auditors stated that the “failings and weaknesses” in the yard’s control must be addressed.
One example given in the report on “poor decision-making” at the yard was that no evidence was provided for FMPG’s decision to award two employee exit packages, both above the £95,000 public sector threshold, which were made without the required ministerial views.
It added that an internal investigation revealed the yard’s previous chief executive agreed to changes to a seconded employee’s contract without the formal approval of either the board or remuneration committee.
Auditors said that the changes to the contract were “a failure to follow accepted procedure”, and that it also resulted in FMPG having to back-pay HMRC £48,000 in underpaid income tax.
Stephen Boyle, auditor general for Scotland, said “swift action” is needed to make sure “poor decisions” at the yard are not repeated.
“The future of the Ferguson Marine Port Glasgow shipyard remains uncertain. Currently the yard hasn’t secured any future work or income, beyond the delivery of the Glen Rosa,” he said.
“We are again highlighting issues of inadequate governance and decision making. An independent review of governance arrangements needs to be swiftly actioned to ensure such poor decisions, without the right checks and balances, are not repeated.”
The report also highlighted “multiple risks” to the continued costs of completing MV Glen Rosa, which is currently due to be delivered in September 2025, stating that ongoing investment is needed to make the yard competitive and generate future income.
FMPG currently has no contracts for work following the completion of MV Glen Rosa and is funded by the Scottish Government until 2026.
Deputy First Minister Kate Forbes said that the Scottish Government is already working to strengthen governance arrangements at the yard and will “carefully consider” the points raised in the report.
“The Scottish Government is committed to helping Ferguson Marine reach a position where it can competitively bid for a range of projects and build a sustainable future,” she said.
“Officials have been working with the Board to explore options to improve productivity and, as previously set out, we are willing to invest up to £14.2 million over two years, subject to due diligence and provided commercial standards are met.
“The draft 2025/26 Scottish Budget allocates £46 million to Ferguson Marine for the completion of Glen Rosa and to cover the yard’s planned capital investment, subject to parliamentary approval.”
The Glasgow yard’s business plan for 2029 had assumed it would receive funding from the Scottish Government’s small vessel replacement programme.
However, a direct contract award was not possible due to UK subsidy laws.
FMPG is now one of six firms invited to tender for the contract.
