Ferguson Marine bosses’ business case for £40m investment is no longer winnable

Neil Gray’s, Cabinet Secretary for Wellbeing Economy, Fair Work and Energy,    statement today saw a frank admission that the Board of Ferguson Marine no longer felt that their business case for the yard that was viable.

This damning admission came on the back of Audit Statement on the 2022 accounts for the yard which questioned its long-term viability. The report also clarified that the bonuses paid to some Ferguson Marine staff were discretionary and out with the Government’s control. There was also some double accounting of the assets belonging to the Yard which needed to be addressed.

Edward Mountain, MSP for Highlands and Islands, question to the Cabinet Secretary:

“Today the audit of the annual accounts was published which said that it was clearly uncertain whether the yard could continue as a going concern, it also said that bonuses had been paid without approval of the Scottish Government. Now the board according to the Cabinet Secretary doesn’t believe that the business case is based on work that they can possibly win, so they’ve asked for £40m, I think is the figure. Cabinet Secretary you’re looking for to do something that they don’t believe is worth investing, so what will the business case be based on, and what will the amount of money that is needed to keep this vital yard in operation.”

The Cabinet Secretary responded:

“I thank Edward Mountain, chair of the committee, for his question. As I set out in my statement, I also thank him and his committee on the work they do to scrutinise this and to ensure ministers, also Ferguson are held accountable on delivering these vital ferries for Island communities that need them so badly. As I’ve set out already, the business case is now subject to change. We’re working with Ferguson and supporting them on that to ensure that it is responsive to the changing market conditions and the areas of work that the yard are looking to attempt to win and will continue to do so because we are committed to ensuring, as far as we possibly can, that there is a sustainable commercial ship building operation on the Clyde.”

After the statement Edward said:

“This is hugely concerning, the Board, who didn’t get Government approval for their own bonuses, don’t seem to have any idea of how to take the yard forward. What is clear is that when a business case is discovered, the yard will need significant investment from the Scottish Government to remain viable.

For the Government to commit to this investment they will need to ensure they don’t breach competition rules, which is a real concern.

The whole future of the yard looks very perilous and the mismanagement of it by the Government is proving a huge concern not only to politicians but also to the diligent workers within the yard.”