Future of Ferguson shipyard 'uncertain' - watchdog

The MV Glen Rosa, which launched in April, is the second of two delayed ferries being built by the nationalised shipyard in Port Glasgow

The publicly-owned Ferguson Marine shipyard faces an "uncertain" future, a spending watchdog has warned.

The Port Glasgow yard has no work beyond the MV Glen Rosa, which is due to be delivered in September 2025.

The Auditor General for Scotland also criticised some recent redundancy payments and highlighted "inadequate governance and decision-making".

A spokesman for Ferguson Marine said it remained optimistic that its bid for the Small Vessel Replacement Programme (SVRP) tender and other commercial activities would be successful.

Deputy First Minister Kate Forbes said the Scottish government was committed to helping Ferguson Marine Port Glasgow (FMPG) reach a position where it could "competitively bid for a range of projects and build a sustainable future".

The shipyard has been at the centre of Scotland's long-running ferries saga but last month it finally delivered Glen Sannox, the first of two LNG ships being built for Caledonian MacBrayne.

The ships have been plagued by design and build problems, ending up four times over budget and six years late.

John Petticrew, the interim boss of the yard, has agreed to stay on until Easter as the firm struggles to recruit a replacement chief executive.

Mr Petticrew recently told Holyrood's net zero energy and transport committee he believed a failure to properly design the ships before starting construction was at the heart of what went wrong.

Auditor General for Scotland Stephen Boyle issued a bleak forecast for the Ferguson Marine yard

In his report, the auditor general said no evidence was provided as to how FMPG decided to award two employees redundancy packages in excess of the £95,000 public sector threshold.

In such cases the views of ministers should have been sought, he said.

An internal investigation also revealed the yard's previous chief executive agreed changes to a seconded employee's contract without seeking approval from either the board or remuneration committee.

As well as being a failure of procedure, this resulted in FPMG having to pay back £48,000 to HMRC in underpaid income tax.

Mr Boyle said: "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.

"We are again highlighting issues of inadequate governance and decision-making."

He added that an independent review of governance arrangements needed to be "swiftly actioned" to ensure "poor decisions" were not repeated.

'Not acceptable practice'

The auditor general said ongoing investment was needed to make the yard competitive and generate future income.

At the moment it only has guaranteed funding from the Scottish government up to 2026.

The report notes its business plan to 2029 had assumed direct award of the SVRP, but the Scottish government decided against this, citing problems with UK subsidy laws.

As a result it now faces competition from five other firms for the tender, four of them based abroad.

FMPG said the issue in relation to the seconded employee followed "proactive action" by its chief financial officer and accountable officer, who alerted HMRC and repaid the money owed.

A spokesperson added: "The decision not to disclose this agreement – and two other payments to departing employees - to the FMPG Board or its remuneration committee is not acceptable practice at Ferguson Marine."

They also confirmed the individuals involved were no longer employed by FMPG.

The spokesperson added: "Since uncovering the governance concerns, a significant amount of work has been undertaken to implement a robust programme of governance inspections and improvements, and we continue to make every effort to ensure that correct protocols are followed."

'We are in a better position'

Meanwhile, Kate Forbes said officials had been working with the board to explore options to improve productivity.

Ministers have promised to provide £14.2m over two years for new investment to help make the yard more competitive, but the funding is subject to due diligence and legal checks.

She added: "The draft 2025/26 Scottish Budget allocates £46m to Ferguson Marine for the completion of Glen Rosa and to cover the yard's planned capital investment, subject to parliamentary approval.

"While we are already working with Ferguson Marine to strengthen governance arrangements, we note the auditor general's report and expect the Board to carefully consider the points it raises."

Gary Cook, GMB senior organiser for for manufacturing, the small vessels replacement programme programme - seven -all-electric ships for CalMac, similar to ones the yard has built successfully in the past - was crucial to the firm's future.

He told BBC Radio Scotland's Lunchtime Live programme: "We know there is shortcomings, we know that we are in desperate need of extra work and we are really looking forward to winning that [SVRP] tender."

Mr Cook said the £14.2m grant would improve efficiencies at the yard and make it more competitive.

The union official added: "I think we are in a better position going forward."