Watchdog Warns of “Uncertain” Future for Ferguson Shipyard

A spending watchdog has issued a warning that the publicly-owned Ferguson Marine shipyard confronts an “uncertain” future. The Port Glasgow facility currently lacks secured contracts past the MV Glen Rosa, scheduled for delivery in September 2025. Furthermore, the Auditor General for Scotland expressed criticism regarding certain recent redundancy payments and drew attention to “inadequate governance and decision-making.” A spokesperson for Ferguson Marine conveyed optimism that its proposal for the Small Vessel Replacement Programme (SVRP) tender, along with other commercial endeavors, would achieve success. Deputy First Minister Kate Forbes stated that the Scottish government is dedicated to assisting Ferguson Marine Port Glasgow (FMPG) in attaining a standing where it can “competitively bid for a range of projects and build a sustainable future.” The shipyard has been central to Scotland’s protracted ferries dispute; however, it recently completed the delivery of Glen Sannox last month, which is the initial vessel of two LNG ships under construction for Caledonian MacBrayne. These vessels have been beset by issues related to their design and construction, resulting in costs four times higher than budgeted and a delay of six years. John Petticrew, who serves as the interim head of the yard, has consented to remain in his role until Easter, as the company encounters difficulties in finding a new chief executive. Mr. Petticrew recently informed Holyrood’s net zero energy and transport committee that, in his view, the fundamental cause of the problems was an inadequate design process for the ships prior to the commencement of construction. In his published report, Mr. Boyle stated that there was an absence of evidence explaining how FMPG determined the award of redundancy packages to two employees that surpassed the £95,000 public sector limit. He further commented that, in these circumstances, the opinions of ministers ought to have been solicited. An internal inquiry additionally disclosed that the yard’s former chief executive sanctioned modifications to a seconded employee’s contract without obtaining authorization from either the board or the remuneration committee. This constituted not only a procedural lapse but also led to FPMG being required to reimburse £48,000 to HMRC for underpaid income tax. Mr. Boyle declared: “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 additionally stated that an independent assessment of governance structures needed to be “swiftly actioned” to prevent the recurrence of “poor decisions.” The Auditor General indicated that continuous investment is requisite to enhance the yard’s competitiveness and secure future revenue. Presently, the facility possesses guaranteed financial backing from the Scottish government solely until 2026. The report observes that the shipyard’s business strategy extending to 2029 had presupposed a direct award of the SVRP, an outcome precluded by UK subsidy legislation. Consequently, it now contends with competition from five other companies for the tender. FMPG reported that the matter concerning the seconded employee arose from “proactive action” taken by its chief financial officer and accountable officer, who informed HMRC and remitted the outstanding amount. A spokesperson further stated: “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 verified that the individuals implicated are no longer employees of FMPG. The spokesperson concluded: “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.” Concurrently, Kate Forbes mentioned that officials have been collaborating with the board to investigate avenues for enhancing productivity. The deputy first minister also indicated that the government is prepared to invest as much as £14.2m across a two-year period. She stated: “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.” She added: “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.”