Ministers spent £560k of public cash for advice over ferry network
MORE than half-a-million pounds of taxpayers- money has been spent by ministers with private consultant Ernst and Young (EY) to advise on ferries since 2015 in a move described as “scandalous”.
It has been confirmed that contracts worth £560,000 have been paid out to the external multinational consultant which has been tasked by ministers to look into the future of Scotland’s ferry service structure including the option of “unbundling of routes into smaller packages”.
Critics say the ministers should be using the Scottish Government’s own free expertise rather than a management consultancy which has frequently been accused of using private capital to redesign public services while advocating “public-private partnership”.
It has been confirmed that Ernst and Young has been paid £156,000 for the yet-to-bepublished Project Neptune examination of the Scottish Government-controlled structure that underpins Scotland’s ferry service.
A further £404,000 has been given to Ernst and Young for analysing the financial state of the Clyde and Hebrides ferry service contract operated by state-controlled ferry operator CalMac.
‘Scandalous’
SCOTTISH Labour MSP Katy Clark said: “It is scandalous that the Scottish Government is taking public money and handing it to unaccountable firms which have a vested interest in private provision of public services.
“There is no reason why the Scottish Government could not use impartial civil service expertise for the purpose of reviewing governance of our ferries network.”
Project Neptune emerged amid growing concern that the service is “cocooned” inside four levels of Scottish Government control with the Transport Scotland agency as funders, the procuring and vessel-owning company Caledonian Maritime Assets Ltd (CMAL), the ferry operator CalMac, and the nationalised shipbuilder Ferguson Marine (Port Glasgow).
Transport Scotland “consultancy requirements” documents state that Ernst and Young is looking beyond whether the structure is “fit for purpose”. It asks the consultants to make a recommendation of a “potential route/structure for direct award of ferry services contract that Scottish ministers could consider as part of a future strategy”.
It also asks the consultants to “include an analysis of the challenges and opportunities associated with options for decentralisation (unbundling of routes into smaller packages)”.
It goes on: “Views are sought on whether corporate structures would allow direct award of contracts in future. However, no advice is sought on the merits of otherwise of that approach.”
‘No case’
TEN years ago, then-transport minister Keith Brown said “no compelling case” had been made that “tendering individual routes or unbundling the current contract” would lead to greater benefits.
At that time, there was concern that it would hive off CalMac’s four busiest routes, as suggested in a 2010 consultation on future ferry services.
Despite the Ernst and Young Project Neptune remit, the First Minister has ruled out privatising lifeline ferry services to Scotland’s island communities and said there are no plans to split up the CalMac network.
Ms Clark, the West Scotland MSP, has raised questions over asking for the Ernst and Young analysis which is supposed to look into unbundling – when Nicola Sturgeon has said there were no plans to do so.
In a letter to the First Minister, she said: “I hope you appreciate the decision to commission private consultants to consider this option has caused considerable alarm among trade unions, among others, including the National Union of Rail, Maritime and Transport Workers which received direct assurances in 2017 that the Scottish Government would build a case for a permanent in-house operation of the Clyde and Hebrides ferry service contract.”
She has called for the Scottish Government to publish the firm’s independent review into governance of ferry services and has sought a guarantee that no part of the current Clyde and Hebrides ferry contract will be handed to a private company.
Ms Clark, a vociferous campaigner to keep ferries in the public sector, has repeatedly called for an emergency plan to address issues affecting CalMac’s ageing fleet.
She added: “Workers, passenger groups and island communities are clear that investment and replenishing our ageing fleet must be the priority, not selling off lifeline routes.
“The Scottish Government must also rule out the sale of any part of the current Clyde and Hebrides contract to any private company.”
A Transport Scotland spokesperson said: “Scottish ministers have already ruled out privatisation and have no plans to split up the CalMac Ferries network.
“The independent review of governance arrangements for Scottish Government lifeline ferry services will present a framework consisting of a range of options to the overarching objective of effective, efficient and economic delivery of lifeline ferry services, to enhance passenger experience and support local island economies.
“The final report has been completed very recently and the Minister for Transport has given assurances in Parliament that it will be considered as soon as possible.
“We will then engage with all key stakeholders to ensure the most efficient and best value arrangement to deliver our key lifeline ferry services.”
Four years late
IT comes as the state-owned ferry operator CalMac is having to handle an ageing ferry fleet with new lifeline vessels MV Glen Sannox and Hull 802 still languishing in the now stateowned Ferguson Marine shipyard, with costs of their construction more than doubling from the original £97 million contract and delivery over four years late.
The debacle led to shipyard firm Ferguson Marine, led by tycoon Jim McColl who first rescued the Port Glasgow yard, leading to a Scottish Government takeover.
An investigation by MSPs into the procurement of the ferries described it in December 2020 as a “catastrophic failure”.
There is no reason why the Scottish Government could not use impartial civil service expertise for reviewing governance