Ferguson Marine future ‘uncertain’ as auditors criticise governance failures
The future of the Ferguson Marine shipyard at Port Glasgow is “uncertain”, auditors have said, as they called for an independent review of governance at the yard to address “failings and weaknesses”.
An Audit Scotland report found before being sacked in March the publicly owned shipyard’s former chief executive David Tydeman agreed contract changes for a seconded employee without approval of the board or renumeration committee leaving the yard with £48,000 bill for unpaid income tax.
The report said an internal investigation found Mr Tydeman changed the worker, seconded from the Scottish Government’s ferry procurement arm Caledonian Maritime Assets Limited (CMAL), from being paid as a yard employee to their salary being paid as the sole director of a limited company, which received £144,685 between February 2023 and March 2024.
Their initial salary was £36,000, later increased by Mr Tydeman to £54,000.
The future of the Ferguson Marine Port Glasgow shipyard remains uncertain
Auditors also said the yard provided no evidence on why it decided to award exit packages above the £95,000 public sector threshold to two employees, without the required advance ministerial approval.
Mr Tydeman also received an exit package above this value, although this had ministerial approval.
The report found there are “multiple risks to the continued costs of completing the MV Glen Rosa” one of the two hugely delayed and over-budget ferries being built at the yard.
Initially expected to cost £97 million, the report found the bill for the Glen Rosa and Glen Sannox has risen to £317.8 million, as of October.
Auditors said Ferguson Marine has no further work confirmed once both ferries are complete with its only guaranteed income Scottish Government funding up to 2026.
The yard’s five-year business plan to 2029 had assumed direct award of the Scottish Government’s small vessel replacement programme but this is not possible because of UK subsidy law and Ferguson Marine is now one of six firms invited to tender for the contract.
Stephen Boyle, Auditor General for Scotland, said: “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.
“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.”
Deputy First Minister Kate Forbes the Scottish Government is committed to helping the yard “build a sustainable future”.
A spokesperson for the yard said it “remains optimistic” about the bid from the small vessel replacement programme and has undertaken “significant” work on governance.
The spokesperson 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.
“With regard to the future of the shipyard, we have a Letter of Comfort from Scottish Government for the majority of 2025, and we remain optimistic that our current bid for the small vessel replacement programme 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.”
Ms Forbes said: “The Scottish Government is committed to helping Ferguson Marine reach a position where it can competitively bid for a range of projects and build a sustainable future.
“Officials have been working with the board to explore options to improve productivity and, as previously set out, we are willing to invest up to £14.2 million over two years, subject to due diligence and provided commercial standards are met.
“The draft 2025/26 Scottish Budget allocates £46 million to Ferguson Marine for the completion of Glen Rosa and to cover the yard’s planned capital investment, subject to parliamentary approval.
“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.”
Louise Gilmour, GMB Scotland secretary, said a pipeline of work is crucial to prevent the loss of skilled and experienced workers.
She said: “To say Ferguson Marine needs contracts is no revelation but 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.”
She said workers are “blameless for the errors made” on the Glen Rosa and Glen Sannox and “deserve the chance to build a new future for Fergusons”.
Opposition politicians criticised the Scottish Government for failing islanders and taxpayers in the its approach to the yard.