Watchdog urges 'swift' review of Ferguson Marine after tens of thousands of pounds overpaid to staff

Public spending watchdogs have called for an urgent review of how troubled Scottish Government-owned shipyard Ferguson Marine is run after it paid out tens of thousands of pounds more than it should on staffing contracts and pay-offs.

Audit Scotland announced on Tuesday it had “serious concerns over poor governance and decision-making”.

The Port Glasgow yard has no work after the CalMac ferry Glen Rosa is completed in September next year, although it has received further state funding until 2026 and said it was “optimistic” of winning the next CalMac contract for seven smaller electric ferries.

Glen Rosa is due to be completed at the Ferguson Marine yard in Port Glasgow in September 2025 | John Devlin/The Scotsman

Audit Scotland said two members of staff had been paid more than the £95,000 public sector limit when leaving the yard, which had not been checked with ministers.

It also said an internal investigation had revealed the yard’s previous chief executive, believed to be David Tydeman, who was dismissed in March, “had agreed changes to a seconded employee’s contract without the formal approval of either the board or remuneration committee”.

The person seconded from the Scottish Government’s ferry-buying firm Caledonian Maritime Assets Limited, or Cmal, also had their pay increased from £36,000 to £54,000.

Audit Scotland said: “Not only was this a failure to follow accepted procedure, it also resulted in Ferguson Marine having to back-pay HM Revenue & Customs (HMRC) £48,000 in underpaid income tax.”

“These failings and weaknesses in the yard’s control and governance arrangements must be addressed.”

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Auditor General for Scotland Stephen Boyle 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.”

Mr Boyle added that the yard’s future “remains uncertain” as it hadn’t secured future work or income. Glen Rosa’s sister vessel Glen Sannox was completed in November.

Audit Scotland also highlighted there remained “multiple risks to the continued costs of completing Glen Rosa”, which will be finished eight years late and some four times over budget, at about £200 million.

It said the yard’s business plan to 2029 had assumed it would be directly awarded the CalMac small vessel replacement programme by the Scottish Government, but ministers put it out to tender because of UK subsidy laws, and the delays and uncertainty involved.

But Ferguson Marine, which has been shortlisted with five other firms for the contract, said: “We remain optimistic that our current bid for tender and other commercial activities will be successful and provide more certainty for our experienced and skilled workers as we continue to explore other opportunities while progressing Glen Rosa to completion."

It said it also had a “letter of comfort” from Scottish Government for “the majority of 2025”.

A spokesperson for Ferguson Marine (Port Glasgow), as it’s known under public ownership, said: “The contractual changes involving a seconded employee came to light due to proactive action by our chief financial officer and accountable officer, who immediately took the necessary steps to investigate, alert HMRC and ensure all monies due were paid.

“HMRC has since informed Ferguson Marine that no penalties will be imposed, due to the ‘behaviour and quality of disclosure’ by the chief financial officer.

“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.

“The individuals involved are no longer employed by Ferguson Marine.

“We can add further that, 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.”

GMB Scotland, the main union at Ferguson Marine which previously called for a direct award of the small ferries contract, said it was vital to its future.

Louise Gilmour, its Scotland secretary said: “The yard is only as good as its workers and, without confidence in the future, their skills will be risked.

“Work on the small ferries would provide that confidence and the decision should be taken with urgency and ambition, not just for Fergusons but for Scotland’s industrial future.

“The workers have been tireless in their determination to deliver two huge ferries, which their yard was ill-suited for, and are blameless for the errors made. They deserve the chance to build a new future for Fergusons.”

Scottish Liberal Democrat economy spokesperson Willie Rennie said: “It has not been a year to inspire confidence in the running of Ferguson Marine.

“A chief executive sacked with the collaboration of government ministers for telling home truths they didn’t want to hear, an order book looking painfully thin and now fresh concerns over poor governance and decision-making.

“In 2025, ministers and bosses need to help Ferguson Marine to turn a corner, with effective leadership and a programme of work to secure the yard’s future.

“Islanders have had to put up with endless delays and taxpayers have been expected to foot a bill for hundreds of millions of pounds, yet still no one in government carries the can.”

Scottish Labour transport spokesperson Claire Baker said: “The SNP Government must listen to this stark warning and set out a plan to secure a sustainable future for this yard.

“The skilled and dedicated workers at Ferguson Marine have been failed time and time again by SNP chaos and incompetence.”

Scottish Conservatives transport spokesperson Sue Webber said: “Ferguson Marine has become a drain on Scotland’s finances on the SNP’s watch and this report confirms yet more taxpayers’ money has been squandered by the company.

“Taxpayers will be appalled that more employee exit packages at significant cost were agreed without any sort of oversight.

“Ferguson Marine has potential as a company but gross financial incompetence from the SNP means that £400 million has been blown on two ferries, that islanders are still waiting to set sail.”