Stephen Daisley

The SNP’s ferry mess

The SNP's ferry mess
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Eight years ago, and with the independence referendum one month away, the Clyde’s last commercial shipyard went into administration. The collapse of Ferguson's not only threatened the jobs of 70 shipbuilders: it was an inconvenient symbol of industrial decline right as the SNP was trying to parlay rhetoric about an independent Scotland being ‘one of the world’s wealthiest nations’ into a Yes vote on polling day. The Scottish government intervened and quickly arranged for a billionaire adviser to then First Minister Alex Salmond to buy Ferguson’s.

One year later, the Scottish government awarded Ferguson Marine, as it now was, a £97m fixed price contract to build two ferries but the following month the yard told the government it couldn’t meet its contractual obligation to provide a full-refund guarantee. Despite this, the agreement remained in place and Ferguson Marine began preparations to build the ferries, both scheduled for delivery in 2018.

The years that followed saw a succession of delays and disputes between Ferguson Marine and the Scottish government until the yard entered administration again in 2019, by which point it had received more than £100m in taxpayers’ money between contract payments and loans. It was then nationalised by SNP ministers but three years on the ferries remain unfinished, with Scottish government finance minister Kate Forbes confirming another delay on Wednesday. The total cost of the ferry project now stands at least at £240m, two-and-a-half times the original estimate.

Forbes was not the only person talking about ferries on Wednesday. Audit Scotland, the watchdog that oversees how the Scottish government spends money, published its report into the contract. It concludes there is ‘insufficient documentary evidence to explain why Scottish ministers accepted the risks and were content to approve the contract’. It says the agreement was ‘not effective when problems emerged’ and ‘some of the milestones in the contract were not clearly defined and had no link to quality standards’, yet the Scottish government was ‘legally obliged to make those milestone payments’.

The report finds ‘weaknesses in project governance’ and ‘no formal escalation processes in place’ despite planning and design issues arising four months into the contract. Inexplicably, a further Scottish government loan of £30m, granted in June 2018, once again required ministers to pay up regardless of additional delays already in evidence. In perhaps its most damning conclusion, Audit Scotland determines that:

The Scottish government made the decision to nationalise the shipyard without a full and detailed understanding of the amount of work required to complete the vessels, the likely costs, or the significant operational challenges at the shipyard.

The auditors also considered the Scottish government’s 2019 appointment of a ‘turnaround director’ whom it believes ‘had limited time to assess the vessels’. That director, who identified ‘serious problems with the vessels and significant operational challenges’, estimated that an additional £110m to £114m would be required to complete the ferries, as well as further extensions to the delivery dates. The report says there is ‘no evidence that the Scottish government or Transport Scotland scrutinised the updated costs, or that the new timescales for the vessels were challenged’. One of Audit Scotland’s key recommendations is that the Scottish Government undertake ‘a formal review of what went wrong with the project with a view to learning lessons to help prevent future recurrence with other vessel procurements’.

What Audit Scotland does not mention, because it falls outside its remit, is the contribution to this scandal of the SNP’s rhetorical style of government. Under both Alex Salmond and Nicola Sturgeon, governance in Scotland has been input-heavy and output-light, geared more towards giving the First Minister something popular to announce than to delivering the substance of that something down the line. For a symbol of this, look no further than the fact that Sturgeon officially ‘launched’ one of these half-built ferries in a ceremony in November 2017. (Fake windows, it was later shown by the Scottish Sun, had been painted on.) Standing beside the Potemkin vessel on its ‘launch day’, Sturgeon told those gathered: ‘Ship launches are always emotional, but this one is particularly so because for more than a century this yard has been so much part of the local community.’ The last time someone emoted this much over a sinking ship, Celine Dion won an Oscar for Best Original Song.

This is Scotland, where because we continue to be lumbered with Donald Dewar’s incompetently-designed devolution settlement, there will be no meaningful accountability for this scandal. No one will have to resign, or at least no one politically powerful. SNP backbenchers will do what they always do: back ministers to the hilt. The opposition parties will give it their best shot but there’s only so much you can do to hold to account an executive that can rely on the vote of every single member of its parliamentary party. There will be the usual pabulum about learning lessons but no lessons will be learned. This will happen again in another guise in another policy area and when it does we’ll all pretend to be shocked and go back through the scandal-denial-inquiry-report cycle once more. This is just how Scotland is governed.