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Chamber and committees

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 22 June 2025
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Displaying 1071 contributions

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Public Audit Committee

Written Authority: Completion of Vessel 802

Meeting date: 22 June 2023

Neil Gray

It has been acknowledged by the committee that we proactively released and published more than 200 documents on the Government’s website in relation to the on-going process at Ferguson’s. We have offered ourselves—Gregor Irwin has been before the committee, and I, as cabinet secretary, and Mr Cook and Ms Hall are here today—and we have published as much as we can without putting the yard at a competitive disadvantage. We are going as far as we can to be transparent and to let people understand the decisions that we are taking and why we are taking them.

Public Audit Committee

Written Authority: Completion of Vessel 802

Meeting date: 22 June 2023

Neil Gray

The narrow value-for-money case that I describe is in the direct comparison between completing vessel 802 and procuring elsewhere, with elements of economic consideration being part of that. In his letter to the convener and to me, Gregor Irwin sets out some of the uncertainty that there is within the market. The cost comparison meant that, in the value-for-money assessment that he has to carry out as an accountable officer, he was not able to conclude with confidence that there was a value-for-money case for completing vessel 802 at the yard.

The consideration that I feel that I am duty bound to take is much wider. It includes the cost to the islanders of a further delay in the vessels. We already know that our island communities have suffered significant disruption. As somebody who was born and brought up on an island, I know how difficult a time people in the islands will have been having, so I am acutely aware of the need to deliver the vessels as quickly as possible. That was at the forefront of my consideration.

Alongside that, there is also the consideration of the future of the yard. The narrow value-for-money assessment is neutral on whether the future of the yard rests on vessel 802 being completed at Ferguson’s or procured elsewhere. I felt duty bound not to consider that neutrally because I felt that, if vessel 802 was not completed at the yard, it would have been put at risk. That was part of my consideration, along with the workforce and the contribution that the yard makes to the local economy. I have heard directly from like likes of Stuart McMillan and Ronnie Cowan about their experience in the local community and about the discussions that they have with those from local businesses, who told them that, without the economic contribution that the yard makes, their businesses would not be viable.

I have to make a wider consideration that goes beyond what has been described as the narrow assessment, which is about the cost to complete at the yard versus reprocuring elsewhere and also elements of economic consideration beyond that. What I have to consider goes much wider, and that is why I made the decision that I did.

Public Audit Committee

Written Authority: Completion of Vessel 802

Meeting date: 22 June 2023

Neil Gray

To be clear—I hope that I am not putting words in Mr Irwin’s mouth—I do not think that that was a decision that was requested because there was advice against proceeding in that direction from colleagues in the Government. The decision was made because Mr Irwin could not be satisfied, based on the economic uncertainty, inflation, the other elements of information that were available and the direct cost comparison between completing and procuring elsewhere, on that narrow value-for-money element.

Mr Irwin was satisfied on the other two elements—on the appropriateness of our proceeding—and I think that that has been set out to the committee. However, no, we are not able to release the report, as I have said. We hold very dear the future of the yard, and we want to ensure that that is protected, as I am sure that you understand, convener.

Public Audit Committee

Written Authority: Completion of Vessel 802

Meeting date: 22 June 2023

Neil Gray

We have to publish them. The Scottish public finance manual sets out how the accountable officer must go through that process. I believe that the previous written authority was in 2007, but there have been numerous such decisions at a UK Government level during that time. I am happy to furnish the committee with more details in my correspondence with the convener on the timeline, which I spoke about earlier.

Such decisions are a rare occurrence in Scotland. I am pleased that that is the case, and I hope that they will not be required routinely, as they are elsewhere. Given that they are so rare, I understand the committee’s interest in how the written authority came about, which is why I am more than happy to be here today and to provide as much information as I can about the process that was gone through to arrive at that decision, so that the committee can have confidence in that regard.

Public Audit Committee

Written Authority: Completion of Vessel 802

Meeting date: 22 June 2023

Neil Gray

No.

Public Audit Committee

Written Authority: Completion of Vessel 802

Meeting date: 22 June 2023

Neil Gray

I will bring in Colin Cook to comment on the particulars of that figure. The future of the yard will depend on ensuring that it is productive and competitive. Some of that work will require difficult decisions to be made about the future nature of the yard, including the capital investment that will be required to bring it up to competitive standard. A request has come in from the chief executive for work that he believes is required to bring it up to standard, and we must go through a rigorous process of ensuring that we are in line with subsidy control measures to take that decision—something that both the convener and I mentioned during the debate.

I bring in Mr Cook to provide further detail on the figure of ÂŁ120,000.

Public Audit Committee

Written Authority: Completion of Vessel 802

Meeting date: 22 June 2023

Neil Gray

There is undoubtedly a requirement to do more. The request that I mentioned earlier has come in. From a subsidy control perspective, we have to assess whether that work would be forthcoming if the yard was in private ownership, and whether, by our providing it, we would be providing a subsidy or a competitive advantage to the yard that it would not have in the private sector.

That work is on-going, but, undoubtedly, work is required to ensure that the yard is competitive going forward. That is where some of the difficult decision making will be over the coming months in terms of ensuring that the yard is in as fit a position as possible to ensure a good future.

Public Audit Committee

Written Authority: Completion of Vessel 802

Meeting date: 22 June 2023

Neil Gray

In relation to what we are discussing today, I took a decision on 14 May and made a statement in Parliament on 16 May—the next parliamentary sitting day. I hope that that gives some comfort to Mr Coffey and his colleagues that I am committed to providing information as quickly as possible to ensure that there can be public scrutiny and that this committee can discharge its duties as effectively as possible. We will seek to put information into the public domain as quickly as we can.

Public Audit Committee

Written Authority: Completion of Vessel 802

Meeting date: 22 June 2023

Neil Gray

I do not need to respond to you in writing, then. [Laughter.] Ms Hall has assisted me by saying that it will take ÂŁ70 million to complete 802.

Public Audit Committee

Written Authority: Completion of Vessel 802

Meeting date: 22 June 2023

Neil Gray

No—and I have said why, convener. I hope that it would be understood that, by releasing the report, we would be putting the yard at a competitive disadvantage. Yards—