The head of Scotland’s public sector watchdog has said he is not sure if bonuses paid to bosses at Ferguson Marine can be recovered and described the payments as “unacceptable”.
Auditor General Stephen Boyle publicised the £87,000 paid to six senior managers at the beleaguered government-owned shipyard, without ministerial knowledge, in a report last month.
The yard, which was rescued from administration by the Scottish Government in 2019, has struggled to complete two lifeline ferries, with further delays also announced by the yard in March. pushing the delivery date for the Glen Sannox and as-yet-unnamed hull 802 to the end of this year and 2024, respectively, five and six years later than originally planned.
Appearing before Holyrood’s Public Audit Committee on Thursday, Mr Boyle re-stated his opposition to the bonuses and said it was unclear why they were paid.
“We consider it unacceptable that £87,000 was paid in bonuses,” he said.
“Not in an ideological perspective, but the payments were made without clear (key performance indicators) framework, that was designed to support the payment of bonuses.”
Such payments, the Auditor General told MSPs, were “relatively unusual” in the public sector, but where they are made “there needs to be clear KPI, clear governance arrangements and we draw attention in today’s report that these factors weren’t in existence when these amounts were paid”.
Asked by SNP MSP Willie Coffey, who claimed it “beggars belief” bonuses could be paid at the yard – if the money could be recovered, Mr Boyle said: “I don’t know if those amounts are recoverable, that would have to be a judgment made by others in terms of the specifics of it, in terms of conditions that existed for those senior managers, what their contracts said.
“We draw attention to these amounts because the amounts were paid without effective governance by the remuneration committee being discharged before the amounts were paid.”
He added that it was a “matter of public interest” that bonuses were paid by the yard.
The bonuses were recommended by the yard’s former turnaround director Tim Hair, who was paid £1.8 million during his time at the firm bet ween August 2019 and February 2022.
Mr Boyle told the committee the bonus was in two parts, 7.5% to be paid upon delivery of the hull of the Glen Sannox and “a further 10% discretionary element”.
“The governance and decision making around that was based on a recommendation from the former turnaround director, chief executive, through the remuneration committee to make those payments,” Mr Boyle added.
“In our view that wasn’t sufficiently robust, it wasn’t clear whether the KPIs had been met and again speaks to real ambiguity around progress and process.”