FMPG has now handed over the delayed MV Glen Sannox, with MV Glen Rosa currently due to be delivered in September 2025. However, there are multiple risks to the continued costs of completing MV Glen Rosa. Ongoing investment is needed to make the yard competitive and generate future income.

FMPG currently has no contracts for work following the two ferries. The only guaranteed income is funding from the Scottish Government up to 2026.

The yard’s business plan to 2029 had assumed direct award for the Scottish Government’s small vessel replacement programme. This wasn’t possible due to UK subsidy laws. FMPG is now one of six firms invited to tender for the contract.

Auditors have raised serious concerns over poor governance and decision-making. No evidence was provided as to how FMPG decided to award two employee exit packages. Both were above the £95,000 public sector threshold set out in the Scottish Public Finance Manual, which provides guidance on the proper handling and reporting of public funds. These payments were made without the required Ministerial views.

An internal investigation revealed the yard’s previous chief executive agreed changes to a seconded employee’s contract, without the formal approval of either the board or remuneration committee. Not only was this a failure to follow accepted procedure, it also resulted in FMPG having to back-pay HMRC £48,000 in underpaid income tax.

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

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 commented: “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 £46m 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.”