It has faced difficulties in delivering two new ferries, Glen Sannox and Glen Rosa, both of which are late and over-budget, and recently missed out on a £175m contract to build seven new ferries of CalMac.
The yard has no further contracts lined up after it delivers Glen Rosa, now due in early 2026, and an audit published in December 2024 highlighted “a material risk and uncertainty over FMPG’s ability to continue as a going concern, for at least 12 months from the date of signing the accounts”.
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Having considered that audit, Holyrood’s cross-party Public Audit Committee has released its report into the future of Ferguson Marine.
The committee comprised convenor Richard Leonard (Scottish Labour), deputy convener Jamie Greene (Scottish Liberal Democrats), Colin Beattie (SNP), Graham Simpson (Scottish Conservatives), and Stuart McMillan (SNP).
It found “multiple and repeated failings, including leadership and board instability, inadequate internal audit, serious weakness in contractor oversight and governance failures around exit packages for senior staff”, with trade union involvement in decision-making minimal and considered inadequate.
Frequent changes among senior management had an adverse effect on governance, while weak internal controls and lack of internal audit until recently contributed to poor oversight.
In addition, payments approved to a contractor and exit packages for senior executives bypassed Scottish Government approval.
The report highlighted an incident in which Ferguson Marine was hit with a £48,000 tax bill from HMRC after entering into a contractor payment arrangement for a secondee from CMAL (Caledonian Maritime Assets Limited) who was initially seconded to FMPG, later moved to FMPG’s payroll, then – without proper board approval – switched to being paid as a self-employed contractor.
The committee expressed serious concerns over the yard’s viability as a going concern going forward, saying considerable investment will be needed to safeguard its future.
It urged the Scottish Government and Ferguson marine to finalise and publish a credible long-term business plan to secure sustainable work; invest in modernisation to make the yard more competitive; strengthen governance structures and ensure future funding and investment decisions are be subject to rigorous value-for-money tests and proper approval.
Committee Convener Richard Leonard MSP said: “It is clear to the Public Audit Committee that there has been a long standing weakness in the management, governance and financial sustainability of this yard. That there are currently no further orders raises significant concerns for us about the future of the last commercial shipyard on the Clyde and its workforce.
“This is a state-owned yard and the Scottish Government must do more to ensure that not only is its future secure, but that the MV Glen Rosa can be delivered as soon as possible. There has to be better oversight and governance of the work that is ongoing.
“There is no doubt that the yard has suffered significant reputational damage and that the workers at Ferguson Marine deserve better, the communities waiting for a new ferry deserve better and the people of Scotland deserve better.
“But it doesn’t have to be this way. Our Committee believes that the yard can once again be competitive. There is no shortage of potential work. With investment, and better oversight, this yard which has a distinctive and proud history can have a distinguished and positive future.”
Responding to the committee’s report, GMB Scotland, the biggest union at Ferguson Marine, echoed calls for investment and the direct award of contracts, including the replacement for Lord of the Isles, to the Port Glasgow yard.
Louise Gilmour, GMB Scotland secretary, said workers must be allowed to restore a world-class reputation unfairly damaged by delays and overspends affecting the Glen Sannox and Glen Rosa.
She said: “People have short memories but, before these misjudged and ill-planned contracts, this yard successfully built a third of CalMac’s current fleet, including the original Lord of the Isles.
“Workers must now be given the chance to restore what was a worldwide reputation for excellence that has been damaged through no fault of their own.
“Before being turned into a political football, they delivered a steady stream of ferries serving Scotland’s islands and must be allowed to do so again.
“Ministers and their civil servants insist direct awards are not straightforward but what could be more straightforward than Scotland’s publicly-owned shipyard working in tandem with Scotland’s ferry operators.
“Whoever is to blame for the failures around the most recent contracts it is not the workers.
“They deserve the support of ministers and that starts with being given the chance to build the kind of ferries they successfully completed for generations.
“The yard needs a steady pipeline of work and that can start with the Lord of Isles.”
Ferguson Marine was one of six yards to make it to the second stage of the tender process for seven new CalMac ferries, but the contract ultimately went to Remontowa Shipbuilding in Gdansk.
A Scottish Government spokesperson said: “The Scottish Government’s decision to take Ferguson Marine into public ownership saved the last commercial shipyard on the Clyde.
“We are ensuring the long-term future of the Yard and the workforce and will invest up to £14.2 million in the yard over the next two years in order to help it modernise and secure future business.
“Scottish Ministers expressed their disappointment and frustration to the Board of FMPG at the confirmation of a further delay and increased estimated cost to deliver the Glen Rosa.
“They also made it clear to the yard’s leadership that it must take immediate and sustained action to restore trust, enforce delivery discipline, and bring the project under control.
“This will be delivered alongside the development of the business’s future commercial strategy, which is being spearheaded by a new CEO to enable Ferguson Marine to win new business in its target markets.”
