 I welcome everyone to this, the 13th, I hope that's not ominous, meeting of the Public Audit Committee in 2022. The first item on our agenda is for members of the committee to consider whether we take agenda items 4, 5 and 6 in private. Are we all agreed? Agreed. Agreed. Thank you very much. The first evidence session that we've got this morning is with regard to the Audit Scotland Audit of NHS Highland. I want to say first of all welcome to Rhoda Grant, who joins us online for both this session and the second session this morning. I also want to welcome via video link our three witnesses from NHS Highland who are Pamela Dudeck, who is the chief executive. Good morning, Pamela. Boyd Robertson, who is the chair of the board of NHS Highland. David Garden, who is the director of finance for NHS Highland. If I could begin by reminding everybody, the committee included, that we are very tight for time this morning, so I would appreciate short questions and short but incisive answers. To begin with, I would like to invite Pamela Dudeck to make an opening statement. Pamela. Thank you, chair. It's a chairman that's going to do the opening statement. Good morning to everyone. Matin Vaugh, good morning from Inverness. Thank you for the invitation to meet with the committee to discuss the NHS Highland 2021 annual accounts on the section 22 report. I would like to begin by acknowledging the extraordinary efforts of our health and care teams, our managers, our patients and our council colleagues for the magnificent way in which they are responded to the manifold challenges of the pandemic. The commitment, professionalism, empathy and compassion that our teams have shown during the past two years has been truly remarkable and impressive. I would like to place on record my sincere thanks and admiration for the work that they have done and continue to do. I took over as chair of the board just a year before the pandemic struck and Pam Dudeck, who took up the chief executive poster in October 2020, has yet to experience a period free of Covid in her role. Despite leading the organisation in such highly unusual and demanding circumstances, I am pleased to report that NHS Highland has made huge progress in addressing the issues that led to the board's escalation to level 4 on the Scottish Government's ladder of escalation. That is acknowledged in the section 22 report and it is further recognised by the board's de-escalation to level 3 last year. The organisation has made major advances in addressing a transformation agenda, which covered culture, finance, performance, governance and leadership. Board governance has been greatly enhanced through measures such as the strengthening of the board assurance framework, a revised committee structure, that bi-monthly integrated performance and quality report. The leadership of the organisation has been radically revamped, both in terms of the executive and non-executive arms, and we now have a very strong board in place. Many positive actions have been taken to improve the culture of the organisation in the close of three years since publication of a static report. Those measures have included the establishment of a culture oversight group, the appointment of an independent external advisor, a listening and learning staff survey and panel, a leadership training programme and the establishment of new employee services, such as the guardian service and the employee assistance programme. One of the most significant initiatives has been the healing process, which was co-produced by Fuzzledoars, StaffSide and our HR team. The second major challenge that we faced was our financial performance in the years up to 2018, when a sizable financial deficit had accumulated, resulting in the need for brokerage from the Scottish Government. A three-year recovery programme was put in place in 2019, aimed at bringing the board's finances into balance. A significant headway has been made in tackling the original deficit. Much of that can be ascribed to the work of the programme management office, which has been embedded to direct and to drive cost improvement opportunities. A number of revised financial governance arrangements, including the formation of a financial recovery board, have also been contributory factors. By the end of the financial year 2020, we had fully achieved our substantial savings targets, with 56 per cent being made on a recurrent basis. Our year-end out-turn exceeded our financial plan, and our brokerage requirement was lower than the approved target. We plan to deliver a similar financial performance with reduced brokerage in 2020-21 until the pandemic intervened and severely impacted our ability to enact the full savings programme. Nevertheless, we still managed to achieve significant levels of savings when other boards struggled to do so. The financial turnaround, which has continued in 2021-22, has been a tremendous achievement, and as a result of a huge amount of hard work and endeavour by our clinical and management teams, our finance staff and our programme management office. I can say with confidence that NHS Highland is now in a much stronger position than it was, and that it is well equipped to deal with whatever challenges lie ahead. Our chief executive, Pam Dudek, and their finance director, David Garden, will join me in answering questions. Thank you, Mr Robinson, for that opening statement. That sets the scene very well, I think, for the areas of questioning that we have got. Pam Dudek is the chief executive and therefore the accountable officer, so my intention will be to direct questions to Ms Dudek, but she may then in turn defer them to Mr Garden or yourself, Mr Robinson. You touched there on the financial position of NHS Highland, which is one of the reasons why my section 22 report was required in the first place. There were three consecutive years in which the in-year financial balance was in the red. You have highlighted, Mr Robinson, in that opening statement, the extent to which savings are required. As I read it from the Audit Scotland report, the order is £32.9 million worth of savings. My opening question is to ask about the progress that has been made. Where are things now financially with NHS Highland? Do you consider yourselves to be on-course to make the cost improvements and the savings that you have identified and how things have been affected by Covid? Pam Dudek, I will address that to you first of all. Thank you very much. As you will appreciate, it is a very volatile environment in which to manage the finances. To our credit, we have kept our PMO going right through the pandemic, and the interaction with that in spite of the pressures has been significant. As you will see and as you recognise, that has interrupted what was a very clear and worked-out programme of savings over the past three years. Therefore, we have had challenges in fully achieving the intent. In the hearing now, that volatile environment remains a challenge for us and will continue, like other boards, as we go forward. However, I believe that we have a very strong methodology and we have significant buy-in across our organisation. I guess that the culture aspect of that is also important because it has been a bit of a mixed message over the past year and a half in terms of dealing with the pandemic and additional funds coming in. A contradictory discussion with our teams is that we need to spend to deal with the pandemic, but we need to save to help our underlying deficit and get us to the right place. We have a fair degree of confidence in being able to make significant savings. I have already started the process for the year to come, but we have a lot of work to do to be successful in that. Like other boards, I believe that we will be challenged in that case. Dave could come in and talk a bit more about that, if that is helpful. The challenges that we faced in the past two financial years as a result of the pandemic have meant that, like other boards, we have not been able to deliver the level of savings that we needed to break even without financial contributions from the Scottish Government. The £32 million that was mentioned is our targets for the years that have just closed. We fell short by about £12 million in delivering those savings, but that sounds really negative when, in fact, we delivered during a pandemic £20 million worth of savings at a time when people were really busy dealing with other more important things. We need to celebrate the fact that we still deliver those benefits that we have, processes in place that allow us to continue to do that, but we need to recognise that that has been a really difficult couple of years in terms of delivering the savings. I am moving into next year or the new year that we are in now. Highland, like most boards in Scotland, is facing a fairly significant financial challenge. I suppose that one of the questions in and amongst talk of savings and cost improvement programmes is what effect that is having on the level of patient care and what effect that is having on the services that you deliver. Is there an adverse reaction in order to achieve those challenging targets, Pam Dooduck, that you mentioned? To date, as a really important part of the cost improvement work, one of the stages is to quality assure the decision making and to look at the impact of that decision and that proposal for savings on care and treatment. We have got a safeguard in there that checks that. To date, I have not come across anything that has given me significant concern in terms of the decisions that have been taken because we have that safeguard in there. I guess that looking forward, the real challenge is that we obviously have to balance our books and we have to have good governance around that, but we really have also to consider the reform agenda in this. It is not going to be possible to just keep slicing savings, and that is what we have been trying to do. We really think about the change in innovation that helps us to balance our books, but it does not compromise quality of care. That is really, I suppose, from my perspective, the key focus that we have to maintain and build on if we are going to be successful and not bring about that compromise. However, we have challenges with the finances in terms of maintaining the level of care and treatment that we would wish to do, and that relates to workforce. I am now going to ask Colin Beattie to come in, because he has a series of questions that he wants to put to you. Mainly, it is about governance and succession, which have been the past serious issues with NHS Highland. Just for the beginning, what progress have you made in your first round of succession plans? My understanding was that your first meeting on that would take place in December 2021. Pamela? The board established. However, as you will be aware, the last few months from December have become pretty hot in the system, so our ability to really formalise that has been compromised somewhat. We have set a further target of October around that. However, all of last year, we spent a lot of time looking at our management structures, at the succession and the challenges that we had, as you say, from what has gone before. We have had quite a successful year in bringing in new people from different parts of the country, securing some of our really important posts, and we actually had really good attraction to those posts, so we had good fields to choose from, which is clearly really important. Where we are at at the moment is really trying to pin down the appraisal process, the personal development plans in those first three layers of leadership and management. I am talking about managers and clinical leaders and the succession framework that will take those people into the right space to be fit to lead for the future, which requires a different set of skills from perhaps what is traditionally gone. However, we are definitely seeing more interest in our posts and we have managed to successfully bring in people with really good credentials to see very senior posts, and we will build on that now. We have also introduced a leadership and management course that will run through the top four layers of management and leadership, again with that whole succession planning in mind. Just moving on on that. What actions have the board taken to address the findings from the Sturrick report and to foster an organisational culture that is much more open? I could probably, I know that we have got a basic succinct. I could spend a lot of time talking about this because we have done a huge amount of work in this space, and we have reported that regularly into our board in the public session. There are many papers written on all the actions that have been taken forward. We have also, that is also very much connected into the culture programme that was established and therefore consolidated the actions required of the board into one programme of work. We have taken forward the culture survey that was asked in terms of Argyll and Bute, and we have brought in an external guardian service who have been with us now. That will be them into their coming up to the end of their second and will be going into their third year with us, which was the contract. That has definitely given people a safe place to go and raised concerns, many of which are resolved on the first contact and those that require further action that are raised with management or the guardian service. Indeed, they will provide a further service into a team or with an individual. We have also implemented our whistleblowing standards. That relates very much to the agenda in that our whistleblowing champion goes out in the visible and makes his visits advertised, so that again there is another confidential and private way for people to come forward if they cannot raise it within the organisation. Just as you opened with the statement, how do we have an open and transparent organisation where people can feel free to speak up? That comes down again to myself, the tone that I set, the management and leadership of the organisation, and I have worked hard with my executive team and middle management to reinforce the style and approaches and encouragement that we should have for people to speak up and share their ideas. I guess that it is a people organisation, so it always becomes very challenging in that space to get things to 100 per cent bulletproof, so I will say that it is work in progress and will continue. Could you indicate where you believe that the healing process is at this point on the back of what you have been saying? Yes, so we are just concluding the healing process. 271 people have gone through that process and have been supported through psychological therapies, a payment or an apology bespoke from myself, as well as other actions that come out from the interaction that they have with the independent panel, so we are just concluding that now. The healing process has also generated learning reports, the consolidation of the learning and the themes, and again that relates back to STERIC, that relates back to our culture programme. Are we addressing all the issues that are being raised both historically and in the here and now? You could briefly indicate what actions the board is taking for you or for a chair. What actions the board is taking to review and refine the board risk assurance framework? I think that Boid is looking to come in, but I am happy to hand him over or continue. Absolutely, if Boid wants to come in and talk on that one. I just want to go back to the previous question about the board's strengthening of the board and of the executive arm. We have appointed seven new executives in the year in question and have a further tranche of 15 senior management appointments in the year just ended, so that is one indication of the way in which we have strengthened our operation. We have also strengthened the board as well. We have had four appointments of non-execs in the year in question and a further one last year. We co-opted a member to the audit committee with particular skills last year and extended his role on the committee in answer to points that were raised previously by the committee. In terms of the static report, 31 of the 35 recommendations in the static report have been enacted already. Pam has referred to a number of the actions that have been taken. We have a very important four-level leadership and management development programme and we have also courageous conversations that have been training, which is a package that has been delivered to over 1,000 colleagues within the organisation, which is a very significant number. In terms of the risk assessment, that comes under the aegis of the audit committee, which has been strengthened. Our internal audit arm has created a programme of inquiry into aspects of how we handle risk. We have taken several steps to improve our risk assurance framework. I would ask Pam to say a little bit more about the precise steps. In terms of our risk framework, we have done a huge amount of work in that space, but it is fair to say that we still want to do a bit more as a board. We have a framework in place and we are working around how we state our risk appetite and tolerance in the months to come, and that will become much clearer as our strategy emerges because we are working on our longer-term strategy at the moment. We have a very clear risk register now and a much better rhythm around how that is reported and set out to go through our board committees and indeed be added to if there is anything from the board committees that needs to be added in. That is reported up to our board meeting, as you would expect. We have also, in that framework, got an assurance level that is reported both at committee and at board, and that relates to risk. We are being able to draw assurance and justify the assurance level, which is on a four-level framework from substantial, to not being able to draw assurance that is based on how we manage risk. We have come on significantly from when I joined the organisation, but it is fair to say that this is on an improvement journey. We spend a lot of time refining, improving and understanding and looking at other good practice to try to get ourselves to the optimal space that we can get to. Just one last question. Something that did not really come up in this last report was Regmore hospital. Over years now, it has appeared as a sort of a problem child where costs were significantly higher in areas such as prescriptions and consultants and so on. What progress has been made to reduce the costs in relation to Regmore? Two big areas. You have mentioned one that is prescribing. The activity that has come through a cost improvement has been around looking at the high cost drugs. That has resulted in significant savings of £2.5 million in three years. The other one is locum costs. As you know, we have had hard-to-fill posts. However, we have still had hard-to-fill posts. However, we have brought our decision making about locum arrangements in-house and put a process around that. That has resulted in a reduction in those costs. Dave can give the figures on the Regmore spend. We are operating acute as a one-hospital force site arrangement so that we can optimise our rural generals. You are probably aware that our rural generals remain a real challenge for us in terms of staffing. That leads to high locum costs in order to maintain the services there. For me, that is a reform agenda to try to address that in one that we are looking at quite significantly. Regmore has definitely, in the year of section 22, been in a more managed space, if you like, and will remain so. However, like any acute hospital, it will have on-going challenges of increasing costs of new technologies and our challenge will be to try to build that into our budget and to prioritise it as appropriate. The teams there are very bought into the cost improvement methodology. We will, as I said before, be reinforcing and doing workshops with them to get back on track now that things are feeling like they may be easing a bit. Thank you very much. Following on very neatly from that, are a couple of questions which the Deputy Convener Sharon Dowie has got. Good morning yet to look at workforce challenges. Previous section 22 reports have highlighted that NHS Highland needed to address its reliance on locum and agency staff in order to achieve long-term financial sustainability. Covid-19 pressures have increased the board's requirements for locum and supplementary staffing and delayed plans for the development of the attraction, recruitment and retention strategy. Nonetheless, the board has made progress in recruiting permanent medical staff and nursing staff. It has filled 21 hard-to-fill consultant positions, including in rural general hospitals that you just mentioned, as well as 62 newly qualified nurses and midwives. The board also took the management of locums back-in-house in October 2020 to better control spending and rates. Can you tell us a bit more about what actions the board is taking to reduce reliance on locum staff? The recruitment strategy is key to this. As you will understand, the national picture is very much one of a competitive market and a reduced availability in terms of what we are looking for in many quarters. We have done quite a piece of work on the recruitment side of things. Obviously, we have a national treatment centre to deliver as well, which requires additional staffing, so there are a few different things. If I talk about our recruitment strategy, we are very actively working to be present in a full-on way in job fairs, wherever we can. We have been looking at different ways to advertise and attract, and we are also looking at how we onboard and assist people to come to the region. You will be aware of the challenges of finding accommodation and getting settled, particularly since the pandemic began. We are trying to look at all aspects of recruitment and to be very diligent and enthusiastic about how we do our recruitment. We have seen signs of that being dividends. We have also been very careful to consider our expansion with the national treatment centre and making that a people plan that is integrated, because there would be a real danger that we would undermine Wrigmore by having those as two-secret centres. We have worked very hard with the clinicians and the teams to have that as an integrated model. For retention purposes, that gives a nice portfolio for people and gives a bit of diversity, but it still keeps it a team game. We are looking at just about every different way that we can attract involving communities to try and sell the areas, particularly when you get into your remote and rural areas. As I say, we are having quite a bit of a marketing strategy, if you like, to recruitment and retention. Obviously, looking after the staff that we have, it is key to that. They have been through a tough time, but I am always hugely impressed when I am out and about at the level of commitment and enthusiasm and keenness to get to a stable place. We support the staff that we have, but we are being fairly proactive in different ways to try to recruit new people. We have also engaged in the international recruitment side of things as part of the national approach, and we are exploring partnerships on an ethical basis at the moment with other countries. You have touched on the next question, and you have covered it. I was asking what the board was doing to attract, recruit and retain the workforce that is needed in NHS Highland. Another question that I would have is, have the processes that you have put in place been enough to encourage the people to stay in the position? We have obviously said that you have recruited 21 hard-to-fill consultant positions and took on 62 newly qualified nurses. Have you managed to retain all of them? One of the questions that I had in the previous session was that was the pandemic having an effect, so because of restrictions people could not move about, so that was maybe having an effect of keeping staff. Now that the restrictions have loosened, have you seen any change there? We have seen a bit of an increase in our turnover, and we are just at the moment trying to analyse and understand what is behind that. It is not necessarily that those who have come in are moving on. We also have a demographic in our workforce that sees about 27 per cent over the age of 55. We have definitely come across people who have made the decision to either retire and return and do something part-time with us or retire completely and made life choices equally. We have seen people making choices to come to Highland and move away from the cities and to come and work in this space for a better work-life balance, but we are keeping a close eye on that. During the pandemic, as you say, it came down significantly for us, but it is on the increase again. We are looking at that closely across all the different professions and we are seeking to understand that and what we need to do to try and mitigate that. I think that Boyd Robertson wanted to come in, but we are pressed for time, so I will go to Craig Hoy and then, if Mr Robertson wants to come in after Craig Hoy's questions, I will see if we have time to do that. Craig, on retention, do you want to briefly tell me what exit interviews you do? When somebody is leaving NHS Highland, what are they typically telling you that they are leaving for and why? That is a very good question. Historically, that does not seem to have had the value placed on it that it might have, and we have had to pick that up and start to put in a process. We have not got a high degree of formal feedback, and that is what we are trying to implement. The people that I have spoken to are anecdotal. We are trying to build up that data set so that we can be much clearer on that. We definitely have people making choices because of the experience of the pandemic and so that they are at an age where they can make that life choice. I have come across a number of people who have decided to go on that basis. The Retire to Return has offered us an opportunity where we can negotiate some of those people who are still staying with us through vaccination programmes. I have had feedback that some people have left because of the historical arrangements and the difficulties that they have experienced, but those have been in isolated cases. That is an area that we need to improve significantly on to have a much more robust database. Other than that, at the moment, I am not able to give you really good robust data, but we are in the process of implementing that framework. That is critical, and it appears to be common to other health boards. If we have a recruitment and retention crisis, capturing the reasons as to why people are leaving a profession is probably vital. Just in relation to the creation of a more sustainable workforce model, what efforts are you putting into that? The fact that you are competing all the time with other areas of Scotland where perhaps you do not have the issue of rurality or cost of living, what more could the Scottish Government do to support you and NHS Scotland could do to support health boards such as NHS Highland who cannot compete on an equal basis with other parts of the country? I suppose that the areas that I have raised nationally have been around support, particularly in that international recruitment space. We are at the start of that as a nation, and we need to try and see how we can make that go at a slightly faster pace and build it bigger, if you like. I do not see that as the cure for all, however, but I see it as an important thing. The other bit relates to the wider community plan and partnership agenda and how we work much more diligently and firmly and in a connected way with our communities to support the economy and to provide careers for people and ways in which they can grow in that space and not perhaps have to leave their locality. We are doing quite a bit of work in that space in the Highland Council area and in Argyll and Beattel, although the Highland Council area is a bit further ahead. We are investing with partners in strengthening that community planning approach. We have nine community planning groups, and the focus there is us as an anchor organisation in trying to create jobs, but the benefit for us is that we get people local working for us, particularly in care routes through nursing and so on. We see that as the international one. The other aspect that is important is that our particular difficulties are in relation to the west coast accommodation. We have been working well with our council colleagues in that space and the housing associations, but the level of stock available that is affordable and permanent versus the pace at which we need to bring people in is challenging. We have mobilised lots of actions in that area, but anything that could help us there. People have talked about a waiting, and that does not exist at the moment, but for our rural generals to thrive or for some of our islands to thrive, we have to have an offer that brings people in and supports them, both from a social and welfare perspective as well as a professional portfolio that keeps them dynamic and motivated. Those are some of the areas that are trickier for us. We can create the profiles, we can work with NES and the universities to try and get more local courses, but anything that supports us in that space nationally, because you are right, we are competing with bigger boards where it may be more attractive from a portfolio perspective, or it may be easier to join in those areas than it is for us, particularly around the west coast. I have to say that NES is extremely challenging now as well, as it tends to be. The next questions are going to come from Willie Coffey. Willie, over to you. Thank you very much, convener, and Matyn Vaugh, to the panel and the Highlands. I wanted to start by reminding everyone that, occasionally at the audit committee, when a health board comes before us, it is surely a result of what it is Scotland knocking on the door and the Scottish Parliament's committee also having a look at matters. To your great credit, you appear to have turned things around financially. The question that I always have here, Pamela, is how can there be such a transformation in terms of the finances and there to be no impact on health care or the public's perception of health care in NHS Highland? How has that come about? You said yourself that there was nothing of significant concern as a result. How can that be if you do not mind answering that for me, please? The decisions that we have taken formally to make a save and go through a five-stage process and one of those stages, before it is signed off and it is absolutely felt to be viable, if you like, is that our clinical director, Narsin, our medical director and other clinical leads will review that and will advise on the risks associated with it. Indeed, we are looking for them to recommend and support and set out the risks so that that decision-making can be taken collectively. Our bigger risk than the finances in the last couple of years has been the workforce challenge and at times the deficit in nursing in particular. Also, some of our hard-to-fill consultant posts, such as Psychiatry, have felt precarious for the public, but that has not been a financial saving issue, that has been a workforce supply issue. We have the right diligence around what we are doing. I think that looking forward again, that is a really tricky one and why it is really important that we work with communities around that. We have to change in reform to deliver services differently—that is not news. We need to do that, not just for financial reasons, but to be sustainable. The only way that we can do that is with our communities, so that we have a clear understanding and joint agreement about what is tolerable and what is not, so that we can escalate if we are in a position where we think that we have to make a really difficult decision that would compromise care and hope that we would never get there. It is a discussion with the public and with our workforce, because we are used to very clear models of operating, and they are not going to square the bottom line unless we can think of different ways of working. Do you engage directly with the public? If you say in the one hand that we used to spend all of this amount of money on delivering this care and we no longer do that, does that not have an impact? Or is it the way you are transforming it? Are you still able to deliver the same level of quality of care by the transformation process that you have embraced as a result of the Audit Scotland report and the committee's interest in the work that you do? I think that it is getting more difficult, and that is the reason that we are going to have to push further on that in terms of what does reform look like. We do engage with the public. We still could do that much, much better than we have done historically and perhaps what we have done to date. We have tried to engage quite extensively with the public in terms of developing our new strategy and we will continue to do so. As is often the case, unless there is a very specific thing, your level of engagement is variable, but we are really going to try and improve on that, because I think that that shared understanding. Communities come up with solutions. You just have to look at our experience through Covid of the mobilisation of communities to help us and that strength-based approach. I still believe that that is where a lot of our improvement and answers lie, working with communities so that things do not come as a surprise or feel like there are a downgrade in services. We need to continue to try and do that well, and I still think that we have a way to go with that. In order to retain quality, we have to have really difficult conversations about how we change and retain that, but that has to be at the heart of everything that we do. Our clinicians will not buy into anything else, either. Just lastly, are you confident that you can give the committee the assurance that looking ahead, you can continue to make the savings that you are making and, hopefully, post Covid, you can continue to deliver the quality and level of care that the public in NHS Highland expect? I think that we have every system and process and governance arrangement in place to ensure that. I would caveat that that is in a hugely volatile world that we are working in. I have been 40 years in the NHS and in health and care and I have never led or managed in anything like it. With the caveat of those things that are out with my control and the fact that this is not a straightforward journey, I do think that we have the diligence and the framework in place to do the best that we can, and that will always be to try and have high quality and efficiency throughout our organisation and to be high performing, but we can probably only do that and ensure that in terms of how we get on with our transformation agenda, how we get on with our strategy, and that is all work and progress at the moment. However, I think that we are a strong organisation with some real innovators, some real good leadership and a changing organisation in terms of how we connect with communities, all of which gives me hope as a leader that I can take us to the right place. Thank you very much. We have just got a couple of minutes remaining and I mentioned at the start that Rhoda Grant is joining the committee this morning. I am going to ask Rhoda if she has got any final thoughts or questions to put to the panel from NHS Highland. Thank you and I will try to be as quick as I can. At the start of the process, the end-rack settlement was not paid in full to NHS Highland, and I am wondering whether that is the case now. Also, about the challenges coming down the road, there is obviously Covid recovery, but there is also taking on maternity services on behalf of Grampian for Murray until Dr Gray is restored, and you talked about the elective centre as well. I am wondering how you are going to cope with those challenges going forward, and are you receiving the funding that you require to deliver for the people of the islands? I might ask Dave to come in just to say a bit more about the end-rack, but what I will say in brief there is that we would agree with you, Rhoda, that in terms of the end-rack at the beginning that that was not, we were not in parity, and you will know that we got a significant uplift last year in terms of bringing us up to a reasonable level of parity with other boards, and Dave might expand on that after me. In terms of the maternity and the NTC, the most important thing for me is that NHS Highland's maternity strategy is secure and clear and worked up with the mums and families of Highland, and, as you know, we have our own challenges in-house with that. The money maternity aspect, I would be very clear that we cannot do that without the upgrade to our unit and without the revenue costs to enhance the staffing that we would need to be able to do that to the quality and the safety agenda that we need to prevail. We are going through a planning process at the moment and doing the due diligence around what that would look like. That will come, but, as a board and as a chief exec, I have been very clear that that is something that we will work through in terms of how and what it will take to do, and we are trying to do that between now and June. We will also consider the concerns of our clinicians and make sure that those red flags are fully explored and we are clear that they are not barriers or if they are, why they are. We are working through that well, but we are absolutely coming at this from a Highland maternity strategy perspective. It has to be. Nobody knows that more than yourself. Our mums across all our far-flung places have a tricky choice. The NTC is funded. The staffing model is funded. I feel that our biggest risk is the staffing and being able to attract and retain. That would take us back into accommodation and on-boarding, which we will take ownership of and do everything that we can, but that is going to be our biggest challenge. Although we are making reasonable progress with that and the next three to six months will really tell us how well we do. I do not know if Dave Darden wants to come in and just say anything else about the NRAC. I am certainly happy to. The Government commitment for a number of years now has been that boards who are below their target share, who are getting particularly less than what their target share is, would be maintained within 1 per cent of that share, and we have been below 1 per cent for a few years now. That resulted in a significant uplift in the previous year of about £14 million. In the year that we have just started, the initial £3 million of NRAC parity money was given to us to maintain us at that level. Right now, we are at about 99.5 per cent of our NRAC share, which is about £3.4 million below it. Oh, that is fine. Thank you, chair. Thank you for letting me in. Not at all. Thank you very much indeed. That brings us to a close evidence session. I take the opportunity to thank Boyd Robertson for his opening statement, which I think was a very useful framing of the session that we have had, to David Darden, director of finance for his input, which I think has been valuable, and particularly to Pam Dudek, the chief executive, who has answered fully and comprehensively and candidly the questions that we have put to you. I thank you very much indeed for your time this morning. I am now going to briefly suspend the meeting to allow a changeover of witnesses. I welcome people back to agenda item 3 of this morning's public audit committee meeting, which is a continuation of our evidence session with the Auditor General and his team on the report into new vessels for the Clyde and Hebrides. We are pleased to welcome back the Auditor General, who is joined again this week by Angela Canning and Anthony Clark. I want to again thank you for coming back so quickly to help us to keep the momentum going in our scrutiny. You gave an opening statement last week, Auditor General, so I won't ask you to repeat that. With your forbearance, I will go straight into questions. Rhoda Grant is joining us again this week remotely. If Rhoda wants to come in if you indicate in the chat room, we will attempt to bring you in on point. I would like to begin by recapping on a couple of areas from last week and trying to seek to get a bit more clarity. In the evidence last week that you gave us, you said that we don't know on what basis ministers agreed to take the risk to place the order for vessels 801 and 802 with Ferguson Marine Engineering Ltd on a non-standard contract basis. Auditor General, you said that there is no documentary evidence of how those risks were considered or how they intended to be managed during the running of the contract. I would like to ask you to reflect on something that the First Minister said to Parliament on 24 March when asked about documentary evidence and so on. Many of the documents that relate to the decision have been in the public domain for some time. They clearly narrate the issue of the lack of a full refund guarantee. They also narrate the mitigations that were put in place to reduce that risk. I would ask you to give your comments on that view expressed by the First Minister. Thank you, convener. Good morning, committee. Key message 2 in our report draws together our overall conclusion in respect of the availability of documentary evidence for this key part of the decision. We note that there is insufficient documentary evidence to explain why the Scottish ministers accepted their risks and were content to approve the contract award in October 2015. It is absolutely the case that there is plenty of evidence, documentary evidence, surrounding the contract, the procurement arrangements, and subsequent events that have taken place. What we are pointing to in this conclusion is that final step between CML through Transport Scotland, highlighting that there were risks in the award of the contract, that it was non-standard in respect of the unavailability of the full 100 per cent of the builders refund guarantee, but that the confirmation came back from ministers that they were content to accept those risks and award the contract to Ferguson Marine Engineering Ltd. We think that there is a missing piece of evidence, convener, about that final important step about how ministers arrived at that decision towards the overall contract to Ferguson in light of those unusual circumstances. That critical piece of evidence does not cover in full the ministerial decision to mitigate the risk. It is perhaps worth commenting, convener, since the evidence session last week, that the Scottish Government has confirmed that it has been unable to find the relevant documentary evidence upon which it made that important decision. I was going to turn to that next. In light of questioning of the First Minister last Friday, a Scottish Government official was reported to have said that a thorough search had been conducted and that the documentation could not be located. That was then confirmed in Parliament on Tuesday by the Minister for Trade, Business Trade, Tourism and Enterprise, who said that, following a thorough search, the documentation could not be located. I will turn to the Public Finance and Accountability Act 2024. I am reminded that it is headed up on access to documents and information. This is a section 23 report. The act is fairly clear that, under section 23 report, the examiner from Audit Scotland is entitled to A, have access at all reasonable times to any document in the possession or under the control of the body or office holder in question, which the examiner may reasonably require. It appears that that document does not exist, but it goes on to say under section B that the examiner is entitled to require from any person holding or accountable for any such document, any assistance, information or explanation, which the examiner reasonably thinks is necessary. Does that cover information and explanation as to why documents do not exist? That is a reasonable connection, convener. Through our work, we request and receive generally all relevant information that, in respect of important decisions. Through this process, as you would expect, we have considered a considerable amount of documentary evidence. We note in the report as well the range of witnesses and conversations that we have had during the course of our evidence gathering to complete a picture and understanding of what I think is fair to say is a complex and disputed chain of events that we have before us. Nonetheless, it has not led us to a place in which we have been able to fully piece together that very important final step prior to the award of the contract and ministerial consideration of how they would accept the risks in the final award to Ferguson Marine. I might turn to Anthony if there is anything that he wishes to add on that point as part of our oversight of the report. I just wanted to be clear with the committee that we receive very positive and full co-operation from the Scottish Government when conducting this audit. We have been provided with, as the Auditor General said, significant amounts of information on most of the key events that transpired throughout this very complicated and long chain of activities. It is just this one piece of it that we have not been able to receive from the Scottish Government. I will either address this to the Auditor General. Did you get an explanation as to why that documentary evidence did not exist? What we understand, convener, is that we were advised that ministers were content to proceed cognisant of the risks that existed. I am not sure that we were able to confirm that there was documentary evidence in place. I note the Government's explanation that they have searched and are unable to locate it, but we are unable to put in a position to say whether the document did or did not exist. We do not know whether they are searching for something that does or does not exist. I suggest that, convener, we have probably gone as far as we were able to, and it may be a line of inquiry that the committee wishes to pursue directly with the officials involved. I will now bring in Willie Coffey, who has quite a number of questions to put this morning. Willie, over to you. Thank you very much, convener. Auditor General, my questions relate to quality standards, the application of quality standards and design and construction and so on. As members are well aware, it is a common theme of the committee over many years. I just wanted to start off by asking a question that the Rural Economy, as you know, committee took around a year to carry out its inquiry into this matter, and their findings were published in December 2020. There are over 100 pages of their document here, full of commentary, conclusions and recommendations. Your report came out in March this year. Do you find any substantive new findings in your analysis of the situation compared to what the committee reported on during their inquiry? You are right, Mr Coffey. The Rural Economy conducted extensive review of the circumstances around the procurement, design arrangement and aspects of the dispute. We touched on, in part, last week in designing the scope for our audit. We took a view that, in light of the very significant evidence that the Rural Economy, the committee had considered and reported on, our report was better served by picking up largely from the point just at the identification of Ferguson Marine as the preferred bidder. We note in the report that we are not shipbuilding experts and that there is considerable debate and disagreement between the contracting parties about the nature of the contract, progress and delivery of the contract. However, our focus would be instead about the process that was followed and some of the use of public money that transpired after the identification of Ferguson Marine as the preferred bidder, the use of loan support, what happened after the Yardwood Interadministration and the future for the delivery of ferries. We build on that report from the Rural Economy, the committee. I think that there is some new evidence that we have brought to bear about the decision to award the contract to Ferguson Marine, especially in light of some of the extent of the risks that were highlighted by SEMA to the Scottish ministers. I am happy to elaborate on that. The general application of quality standards is a recurring theme, convener, as we all know, but in this case they apply to the shipbuilding industry. We have heard over many years at the committee about the importance of thorough planning and design at the outset of any project, whether it be a piece of software or a bridge or a ship or vessels in this case. You said in your report on page 25 that Ferguson started building the vessels before the designs were agreed with SEMA, which led to substantial reworking being required with increased cost and delays and no link to quality standards. Why was that allowed to happen at the outset? Surely nobody would start building something before they knew what they were being asked to build. In your view, did those types of failures mean that there was little prospect of a successful construction outcome further down the line? I am going to ask Anthony to come in in a moment and perhaps build on some of the evidence of last week where we explored the nature of risk and risk transfer in the shipbuilding industry, the nature of the contract that is anticipated for control, if we can use those terms, to reside with the builder as opposed to the purchaser. What does that mean for milestone payments and their connection with quality arrangements? How is that perhaps distinct and unusual from what we would say from other major infrastructure projects that exist in Scotland? It is maybe worth it if Anthony says that I am supposed to touch on some of the role of SEMA during the build phase and the extent of, as we cover quite a lot of detail in the report of owner observation reports, which are SEMA's views on progress and quality arrangements. I am happy to pass it on to Anthony Coffey to take us through that. Thank you very much, Auditor General. Mr Coffey, before I turn to that second point, I might just briefly build on the Auditor General's response to your earlier question around did we find anything new beyond what REC found in terms of the contract and how it operated. I think that it is fair to say that we did conduct our own primary research, we interviewed people and reviewed the document ourselves, but I think that it took to a place that was largely confirming what the REC committee had found in its report, in that we identified deficiencies or weaknesses in terms of the scope for the contract to work in the circumstances associated with Hull 801 and 802. In the contract, it did not stipulate clearly what would happen in the event of the builder not applying general quality standards. I think that that is well known and it is well documented by the REC committee. We also highlighted in our audit report weaknesses in terms of lack of clarity of specification about what was meant by fabrication for the fabrication milestones, and we highlighted that it was not clear how fabrication was due to be assessed. There are also questions arising in terms of the absence of clarity around escalation should there be difficulties during the conduct of the build. So hopefully that builds on what the Auditor General said. You asked a question about is it unusual for people to start building before all of the designs are signed off? We heard during the audit that that is not unusual in shipbuilding. It does happen that people start building and fabricating in advance of all of the designs being signed off, but that generally happens when you have a standard vessel. As you know from the REC report in our report, there is a disagreement and perhaps a dispute about the extent to which those vessels were novel or standard vessels. That raised some interesting questions to committee while we should explore about the sequencing of events. I think that the Auditor General wanted me to touch on the role of CMAL in this and on our observation reports. The report is pretty clear that CMAL highlighted a number of concerns during the build phase, which is still on going of those two vessels. But the nature of the contract meant that CMAL had no power, if you like, to intervene or to stop the ongoing fabrication of the ship. That touches on the nature of the new build contract that is fairly standard in the shipbuilding industry. It becomes more of an issue in the circumstances where there is not a full builders refund guarantee and where there is more risk associated with the purchaser. That is an important issue in the context of the report and the issues that you might be interested in as a committee. In paragraph 50 of your report, you tell us that CMAL could only advise not to require Ferguson to alter its approach to the design and construction. I have never heard of any quality standard worth its salt where the customer cannot instruct the builder to carry out its wishes. What emerged from that was something called the owner observation reports that members have probably read about in the various reports, but they are basically change requests in quality management parlance. They are change requests, they are common in any other effective quality standard, but there were 346 of those according to your report as well, but only half of them were carried out by the time Ferguson went into administration. Was the scale of that particular outcome unusual in your experience? Was that a symptom of failing to agree the designs in advance for this peculiar construction and effectively meaning that everyone paid the price later on in the project? If I might come in on this one, if that is okay, Mr Coffey. We are not really in a position to provide a comparator of the number of OORs that you might see in a build. We do not have a comparator for those two vessels, it would be very difficult to do so, and we are not naval architects, this is not our core business. I think that what we can say is that the way in which the contract was constructed gave limitations in terms of the extent to which CML could enforce owner observation reports and paragraph 63 of the report touches on that. There appeared to be differences of opinion among FML and CML about the reasonableness of some of those OOR requests, which hinged on, or at least influenced by, disagreements about the nature of what the ships or the hulls were meant to be and on-going difficulties around the sign-off of the specification. Link to that was difficulties around the relationships between FML and CML, which obviously created difficulties at different points of the build as well, which are touched on in both the REC report and our report as well, Mr Coffey. My last question for the moment, convener, is still on the quality issue that I think is really crucial and goes to the heart of much of us. In paragraph 62, in your report, you actually mentioned that the quality of the fabrication was not acceptable and that vessel parts themselves were not being built to the correct specification or standards. In paragraph 130, in the report of the general year report that Ferguson had installed 1,400 cables that were too short, and following a survey by the newly appointed turnaround director, all of them are going to have to be replaced, leading to more expense and more delay, since there are over 8,000 remaining cables still to go in. I simply ask this, who in earth sanctioned the installation of cables that were too short to do a particular job? Why did nobody spot that early on at the outset? Why did it take a new director to come in to suddenly discover that? In your view, auditor general, does that not point to incompetent management and construction processes from the outset? I will address both of those points, Mr Coffey. In paragraph 62, what we look to do, and I think that recognising the point that Anthony makes, is that the extent of which we are able to pass judgment on the quality or otherwise of shipbuilding is limited and for others to do so. We set out in paragraph 62 that CMAL advised the programme steering group of the concerns that it had about quality, in respect of both the fabrication and vessel parts not being built to the project, the correct specification or standards. We are also going to say, of course, that FML disputes that. Again, that is really one of the themes of the overall report, the extent of disagreement, ambiguity and dispute resultant breakdown in relationships between the contractor and the purchaser. That is clearly part of the narrative of the report. You mentioned paragraph 138 and some of the more recent events where the now former turnaround director highlighted one of the newer quality issues on the ships and the cables. What will that mean for further delays for the completion of the ships and additional costs needed to rectify it? In response to your specific question, who is responsible for that? Quality was the responsibility of the shipbuilder during the time that they were tasked with running the contract. Clearly, as Antony mentioned, CMAL had a direct oversight and role during the course of construction, and that escalated at various points following the release of additional funding and loan provision. Overall terms, the yard would be responsible for the quality of the work that is undertaken. Antony wants to say a word or two more. Did Ferguson's dispute that the cables were too short? I do not think that we know the detail to that, Mr Coffey. I think that the issue with the cables has just been discovered more recently by FNPG. Parliament was updated on the issue by the new chief executive of FNPG back in March this year, so I think that it has just been a recent... The process that the cables in the vessel were too short? I understand that, as FNPG has been reviewing the work in the shipyard, an event that has more recently come to light. I wonder if I might just step back and talk more broadly about the governance arrangements, because clearly it is the responsibility of the fabricator to fabricate the ship. However, there is a broader question about the overall governance and oversight of the construction of the two hulls. I think that our report is pretty clear that there were weaknesses in the broader project governance arrangements and that there was the programme steering group that was meant to be providing strategic oversight of the construction, but we highlighted a number of weaknesses in the programme steering group arrangements in terms of the lack of a project initiation document, a lack of updating of risk registers, weaknesses and shortfalls in the quality of information that was presented to the programme steering group. That is a different point from who is responsible for putting the cables in, but it highlights broader issues around the overall management of the two pieces of fabrication. Lastly, none of us are experts at building ships, so we know that. Do you recognise, Auditor General, that some of the issues are recurring themes for us about proper investment and effort in design at the early stage? What is a fair chance of success at every project no matter what it is? If you do not invest that energy at the outset, you are unlikely to be successful at the end of it. I do recognise Mr Coffey's long-standing interest in the successful delivery of complex infrastructure investment projects. I absolutely agree, too, that effective design agreement with what is in the contract, that there is clarity from both the purchaser and the provider as to what the intended outcome is, is one of the key components to ensure successful delivery. In this report, we are clear that that is one of the factors, but there were a number of other circumstances that have led us to today's report. I am going to turn straight away to the deputy convener, Sharon Dowie. I want to start by going over a point from last week, so if I can just go back over what was said when asking about the decisions to continue with the contract with the FMAIL and not go back to the tendering process, which was Seamall's preference at that point. Jill Miller said that Transport Scotland submitted a paper to ministers to say that FMAIL was the preferred bidder and that the First Minister would be announcing that yet visit to the yard on 31 August 2015. We know that the pre-qualification exercise made it clear that the provision of a 100 per cent refund guarantee was mandatory. We asked Transport Scotland and the Scottish Government for all documentation relating to the minister's decision, but we did not receive any. Antony Clark said that one would expect the accountable officer in Transport Scotland to share their thoughts, ideas, risks and concerns and to make proposals to the Scottish ministers on which ministers can reflect and make a formal decision. As Auditor General has indicated, one would expect that to be recorded and documented. Mr Boyle later said that we do not entirely know whether that is a case of there being no document to support that important decision or of having asked for one and of it not being provided. The whole scenario gives great concern over transparency and secrecy issues within the Scottish Government and also the reasons behind why this critical information has not been recorded. It could appear that, after having announced FMAIL as the preferred bidder on 31 August, the First Minister would not have wanted to announce the very next month that the bid was not valid due to the builder's refund guarantee not being given and that they were going to go back to the tendering process. It is not good practice for the concerns of FMAIL not to be taken into consideration and to be overruled by Transport Scotland and Scottish ministers, but it is totally unacceptable for the meetings and decisions not to have been recorded. Two questions. Do you think that there were political motives and pressures from the Scottish Government that led to the feelings in the process and the continuation with the contract with FMAIL? Is this a decision that would have been taken by a minister, cabinet secretary, First Minister or the cabinet as a whole? Who would have been responsible and accountable for recording all the minutes of the meetings and the decisions that came from them? I perhaps need to draw the committee's attention to the first question that you asked and to exhibit to in the report again, which sets out the various roles and responsibilities of the Government parties. It draws attention to CalMac, FMAIL, Transport Scotland and the Scottish ministers. In particular, in reference—we touched on last week and earlier this morning—the award for ferry assets rests with ministers, so it would be a ministerial decision to award the contract. That reflected in the chain of events from FMAIL as the procuring party through to their sponsor division in Transport Scotland, and ultimately information provided to ministers about how they would accept the risks and, ultimately, the award of the contract. We are clear, Deputy Secretary, that it is a ministerial decision to award the contract. As we have also touched on, the fact that there is not that final piece of documentary evidence about the overall award and the acceptance of the extent of the risks that FMAIL highlighted, most notably the absence of a full 100 per cent builders refund guarantee makes us unable to answer your question in a way that you have asked us to, which individual minister ultimately took that decision. Like everyone else, we have been aware that there has been speculation and comment about that, but we do not have information that allows us to answer that question directly beyond the overall note that it is a ministerial confirmation of the contract award. Who would have been responsible for the recording? If the meetings did take place, who would be responsible for doing that? I apologise, I forgot to answer that part of your question. Senior civil servants advising ministers would have been responsible. Ultimately, the accountable officer of Transport Scotland at the time would have been responsible for the formal advice, the note and then the recording of that decision. As you would expect, they would have been supported by other officials who would have been partied, but the importance of formal clear record-keeping matters in such circumstances, particularly the award of large infrastructure projects, and most notably where that deviates from the standard contract arrangements. It is very clear that that ought to have happened, but it appears not to have done so as we would have expected. A systemic failure of the Government to record crucial information. Since the publication of your report, are you aware of any directive or actions taken by the Scottish Government to ensure that all ministers and civil servants ensure that minutes and evidence of meetings are recorded? I will ask the team to come involved and listen if they are aware of anything, but I am not aware of any further directive from senior officials, permanent secretary, in respect of the quality of record-keeping or the importance of it. It is not to say that that has not been happening or that there has not been internal communication within the Scottish Government to that effect, but it may be a line of inquiry that the committee wishes to pursue with the Government. I will check with colleagues if they know. We are not aware of any particular instructions following the audit report, but we are aware that, when issues like that have occurred in the past, instructions have been issued by the appropriate permanent secretary to their staff. Just one ministerial direction. The accountable officer writes to the appropriate cabinet secretary expressing their concerns seeking direction. In response, the ministerial direction instructs the accountable officer to implement the decision. As a result of that direction, the minister, not the accountable officer, is now accountable for the decision. So, no directions have been made in relation to the new vessels for the cloud in Hebrides or none have been recorded. I think that it would be fair to assume that, with the decision of this importance, there would have been ministerial direction for the contractor preceded. If that paperwork cannot be found or indeed does not exist, does the accountability lie with the accountable officer or the minister? Yes, Dave. In the absence of formal apologies for the distinction but written authority in terms of the Scottish Public Finance Manual in Scotland, as opposed to the terminology ministerial direction, if an accountable officer does not request such written authority, then the accountability for the decision rests with the accountable officer. I am touching on something that Mr Coffey had mentioned. Seamall issued a design and built contract. In November, one month after the minister said that the contract was to precede £24.2 million, which was 24.9 per cent, reduced under a quarter of the total contract value, was given for procurement deposits. The following month in December, £2.8 million was given for cutting of steel. On page 25, the key message 2 states that FML began vessel construction before it had agreed the detailed design with Seamall. Is it normal procedure to start building a vessel before a finalised drawing has been signed off, and who would have authorised the payments to start being given to FML before that had been completed? I will ask the Antony to come in and say a bit more about the contract award arrangements, just about the extent to which building, I suppose, on a summer last week's discussion as well about project milestones, the size or the number of project milestones in this contract and the extent to which they were not related to vessel progress or quality arrangements. Antony can also just touch on or contradict me if he knows otherwise if it was not Seamall that we are in as the body responsible for authorising these payments. I think that the odd channel is correct that it would have been Seamall that offered a device on the appropriate notes for otherwise of making those payments, but you might remember from the previous session, Ms Downey, that Jill Miller explained that there were particular circumstances at the start of the project and that there was a decision reached that early payment should be made to purchase material, given some of the known cost pressures associated with the building of the ship. There were particular circumstances at play around that early payment that can perhaps explain why that payment was made, but again it might be something that you want to follow up with yourself as a committee. Just to touch briefly on your question around, is it unusual for fabrication to start quite so quickly? I said in response to Mr Coffey earlier that it is not unusual for someone to start fabricating before all of the vessel design has been approved and signed off. That places the risk of fabrication on the fabricator, but in the circumstances of a lack of full builders refund guarantee, that could be seen as being problematic. In paragraph 102, the turnaround report indicated that it would cost between £110.3 million and £114.3 million to complete the vessels, and that is on top of the £83.25 million that CML had already paid to FML. That is more than the original cost. Was any scrutiny done to see how those figures were reached? I will ask Angela Sir to come in a second to say a bit more about the new arrangements in the yard, the new public body that is overseeing the delivery of the contacts from Marine Port Glasgow. However, it is our understanding that those are figures that the turnaround director and their team arrived at following their assessment of the current state of completion of the vessels and the on-going challenges to rectify some of the circumstances that Mr Coffey referred to with the cables and what that meant for the delay in the completion of the two ships. In more general terms, Ffyrgus Marine Port Glasgow is subject to public audit arrangements, as distinct from the arrangements that were in place while Ffyrgus Marine was a private organisation. That affords me and the committee and the Parliament more opportunity for scrutiny of the yard's arrangements and the public reporting of the progress towards completion. I will ask Angela Sir to say a bit more if she wishes. I do not think that I have got much more to add to what the auditor general said. The only thing that I might briefly add is to draw your attention Ms Downey to paragraph 99 of the report, in which we highlight that, while the Scottish Government had undertaken some due diligence in advance of nationalising the yard and was able to draw on the turnaround director's report, it did not have the opportunity to gain a detailed understanding of the operational challenges in the shipyard. It was not able to look at the level of outstanding work, so I just thought that it was worth bringing that particular point of report to your attention, Ms Downey, because I think that it is relevant to your question. Just in the last one, it is a long question again. So, former FMA management are critical of the report produced by the turnaround director following nationalisation of the Ffyrgus and Marine shipyard. How would you characterise the report and the process by which it was compiled? I think that we are limited in our ability to form an assessment of the turnaround director's report. We know that the turnaround director's judgment was informed by the work of him and his team about what he found in the yard. We also know that there were considerable changes of management at the yard very shortly after the body went into administration and became a public body, so there was a lack of continuity of senior officials in the yard. Anthony is right in saying that the Scottish Government were not in a place to have a rounded picture of the risks, issues and financial implications that they were taking on when they nationalised the yard. Beyond that, we have not undertaken any scrutiny per se of the costs that have been included in the turnaround director's report. We have no reason to doubt them. It is clearly the case that, given the state of completion of both ships, there remains many months of additional work and public expenditure in order to complete them. One of the comments was that Audit Scotland did not consider vessel design or the initial tendering process, which FMA will argue is essential to understanding subsequent delays and cost increases. What would be your response to that? I would reiterate that the scope of our report did not consider vessel design. We took a view that had been well considered by the Rural Economy, Committee's report. We also note in the report that, as was heard in evidence by the Rural Economy Committee, the extent of dispute and disagreement was clear that both sides saw independent experts to support their position on the design, whether it was a prototype or not, whether the contract suggested as much. As we have mentioned more than once or twice, we are not shipbuilding experts and therefore took a view that the design arrangements had been covered and reported on and that there is clear dispute about it and that the scope of our work was better served looking at other areas of the delivery of those two ships. Very briefly, you mentioned the turnaround director. I wonder whether, as the Auditor General, you have any comment or view on the contractual arrangements of the turnaround director and the terms of his engagement, which I do not think is included in your report, but I wonder whether you have had a chance to reflect on that. You are right, convener. We have not included that in the scope of our report. I would just note that, if you are referring to the rates of pay for the turnaround director, that these are unusual in a public sector context and considerably beyond what we see of other public sector leaders. I note that this was commented on by the Scottish Government that this was consistent with the market rate for such services. I have no benchmark one way or the other, convener, on whether that is the case or not. As you say, we have not done any additional work on it. That may be a line of inquiry that we will pursue elsewhere in that case. I will now invite Craig Hoy to put forward a series of questions. Craig Hoy, thank you, convener. Good morning, Mr Boyle. Last week, you expressed your frustration that you cannot get to the full facts and the hearts of the ferry gate scandal. Barely a week into our inquiries, I think that some members of the committee will share that frustration, because key documents cannot be found or when prepared, key witnesses have been gagged, the reports of possible fraud and corruption, Scotland's former First Minister has gone as far as saying that we should be calling in the cops. Today, Eric Ostegard, the chairman of the Government's ferries quango, when the deal was done, has said that CML was given written confirmation to proceed awarding the contract to Ferguson Marine, but was not given any written confirmation as to why that is the case. Just like all scandals, there is now perhaps a cover-up of people or possibly even Government ministers covering their tracks. One week into our inquiries, I share your sense of frustration, but we are not alone because, in his submission, Jim McCall, who, let's not forget, was once a pal of the SNP, the First Minister and Speeddall, one of their favourite Scottish business ministers, is clearly frustrated. His submission to this committee is stark, and it points to more than just a fall-out amongst friends in the nationalist movement. He says that the procurement process was driven by party political dynamic. He says that it was rushed to deliver headlines for the SNP conference. He says that CML's concerns were not conveyed to him, and that he says that not enough time was given to feasibility of the conceptual design. If that was the case, it would be very serious indeed. We would be talking here about the corruption of the procurement process, and it would explain why things since then went badly wrong and why, potentially, ministers have been keen to cover their tracks. In the absence of any documentary evidence that disproves this, how concerned should we be that the original process may have been conducted along those lines? If Mr McCall's claims are true, would that not explain why we have seen such resistance to full and total transparency at a critical point in this process? Morning, Mr Hoy. Clearly, there is much comment on this report and the committee's evidence consideration of evidence on it. In respect of the procurement arrangements, I am at risk of repeating my frustration and noting again the absence of key documentation with which ministers accepted the heightened risk, given the absence of a builders refund guarantee, and how they would bear such risks. As we have touched on last week, typically in the shipbuilding industry, the risk is transferred to the builder. The purchaser is protected by the 100 per cent builders refund guarantee. The absence of written confirmation as to how those risks would be managed is clearly a significant factor in this report. It is probably limited as to how much more I would wish to comment on the extent of political factors. Other than perhaps repeating the answer that I gave to the Deputy convener on the respective roles and responsibilities for the contract award, the Scottish ministers had a clear role in the contract award. What I am not in a place to do is to comment on the motivations for that decision. I do not want to dwell on the original procurement process, because I recognise that that was a matter for the Rural Affairs Committee and that your report does not go into this, although the Parliament still has questions to ask and answers should be forthcoming, because there is still something suspect about the scoring and emphasis in the tendering matrix process. However, in relation to tendering and procurement, there are three critical dates and points in the development of those vessels, which your report covers and where that could be revisited. Those are the moments when the Government could have got a grip, it could have stemmed the spending, and it could have made sure that those ships were procured properly. However, for whatever reason and possibly to keep covering its tracks, the Government did not go down that route. The first of those three points and moments come when Ferguson Marine suddenly announces that it cannot offer a full 100 per cent builders refund guarantee. In the interests of transparency and fairness, which are critical to any procurement process, should the Government not at that stage, through CMAL, have reopened the tendering process to the other five bidders or at least informed them that the playing field had changed significantly. Do you know if that was considered or whether other bidders were informed at that stage of that material change to the procurement contract? I will bring colleagues in a second just about the chain of events, which we set out in a bit of detail in the report about the negotiations. The timing that it came to light that Ferguson Marine Engineering Ltd werent able to offer the 100 per cent builders refund guarantee and the actions that CMAL took thereafter. If I may reflect on some of last week's evidence as well, I think that my colleague Jill Miller was asked on a similar theme about whether or not Ferguson had raised any reservations or concerns about the 100 per cent builders refund guarantee prior to the identification of their status as preferred bidder. You will confirm that that was not the case. Therefore, it is by implication a tacit acceptance of the terms and conditions of the contract. I think that it would have been reasonable for CMAL to say that, in the absence of the provision of the full terms and conditions of the contract, as you would expect in other public procurement arrangements, if a provider cannot meet the terms and conditions of the contract, that is a material event and would give the purchase of the opportunity to take a decision as to either how they would manage those risks or whether they would restart the arrangements. However, I will pass to Antony, if he wishes to say any further. I think that we are centring around a point that has been covered a few times already this morning, which is this critical decision around the decision to appoint or not appoint FML to this contract in the circumstances where the builders refund guarantee was not available. What we know and set out very clearly in the report, Mr Hoy, is that CMAL highlighted their concerns about the risk with Transport Scotland. We also know that Transport Scotland highlighted to the Scottish ministers CMAL's preference to restart the tendering process, but the decision was made not to go down that route. What we do not know is, on what basis, it was decided not to follow the advice or address the concerns of CMAL. That is not known at this point. Let us maybe bypass some of what then happened and head fast forward to June 2018. It is reported that FML asked the Scottish Government to intervene to instruct CMAL to take part in an expert determination process to resolve the growing dispute between the procurement agency and the yard. FML managers say that CMAL did not do that because CMAL had something over ministers that they had forced CMAL to do the deal with Ferguson Marine in the first place. Reflecting on your report's account of this period, FML's management says that you have accepted the Government's false narrative and fabulous propaganda that the fact that this was supposedly down to FML and not down to flaws flowing from the procurement and design process being rushed because ministers wanted McCall's yard and they wanted it quickly. Mr McCall goes on to say in his submission that the reasons for the Government not intervening to agree to an expert determination process is because it would be very damaging to the Government because CMAL's board had threatened to resign en masse and blow the lid of what really happened in relation to the awarding of the contract. Have you seen any evidence of that? Rather than going down the route of an EDP, would that not have been another point where they could have revisited the procurement and delivery of the ferries? Before turning specifically to your point, we considered a considerable suite of evidence in arriving at the judgment that we set out in our report. It is clear from the report and the substantive evidence that the committee has said that there is such conflicting events or interpretation of events and that continues in the submissions that the committee has subsequently received. If I may pick up the point that you make about the extent of the dispute and the options available to resolve disputes between the contracting parties. You mentioned dispute resolution expert determination and what happened in those circumstances was really the step beforehand about mediation as to whether that would be agreed and draft mediation between the parties was progressed. However, we note in the report that there was a failure to agree in terms of reference and an escalation to the Government parties suggesting to Ferguson that it needed to pursue its claim through the court session. That ultimately was deemed by Ferguson to be unaffordable and the scale of the dispute by that is like many tens of millions of pounds going to the court session as Ferguson has set out would have led to work stopping on the yard and redundancies and job losses and so forth. What feels like a missed opportunity, Mr Hoy, is that there wasn't mediation pursued in that contract that might have led to a better outcome. Ultimately, we are still in the circumstances where the ships aren't complete, rural communities relying on the boats many years late and the use of mediation might have provided a better, cheaper and quicker alternative to the circumstances that we saw in the report. I have two quick questions in conclusion. There is one final point where the procurement process could have been reopened or where a different decision is taken and that is at the point where the Government determined that it would nationalise the yard. In your report, you say that the decision to nationalise was taken without full and detailed understanding on the amount of work required to complete the vessels, the likely costs or the significant operational challenges at the shipyard. Again, we see the Government pressing on regardless. How concerned are you that the Government proceeded with nationalisation on this basis and what were the consequences both financially and in terms of the ongoing construction of the vessels? You are right. You have set out one of the judgments that we make in the report that the decision to nationalise the yard was taken without full sight of the anticipated costs necessary to complete the vessel. As I said, that is consistent. The overriding aim of the Government was clear to progress with the completion of the yard, save the yard and to protect jobs in Ferguson Marine. There is a consistency of the Government's intention in nationalising the yard, but given the scale of the additional costs and time necessary to complete the boats that are set out in the turnaround director's report, there is a question for the Government as to whether it could have had a fuller understanding of the obligations that it was assuming at the point that it nationalised the yard. Last week, you said that one material witness from FML, who wanted to give evidence to your audit and investigation process, could not do so because he had signed a gagging order with the Scottish Government. If the Scottish Government agreed to lift those non-disclosure agreements, would you be willing to reopen your lines of inquiry and produce anex to the report? It is certainly something that we could consider, whether there is any material additional evidence. It is not to say that we would reopen our report, but we would clearly look to exercise the opportunity to speak to the person if that was an opportunity. I think that we understand the circumstances as to why that was not the case. It was not necessarily just the Government, but also the administrators of the yard, who were not willing or able to be in a position to waive the non-disclosure agreement that the former manager of Ferguson had signed. Just on that final point about the contract arrangements post nationalisation, one of the things that you highlight in paragraph 105 of the report is quite a fundamental shift from the contract being based on a fixed price tender basis to a cost plus basis. The Scottish Government agreed to paying additional vessel costs regardless of the final price. Do you have a view on that decision? It is clearly unusual, convener. I think that it reflects the circumstances that the Scottish Government has found itself in with determining that there is a necessity to complete the outstanding vessels. We also note in the report that the Government's view was that this was the cheapest and best option for them as opposed to undertaking something more fundamental as we also referred to at various points, there was consideration about scrapping the contract, towing the boats to other yards and exercising those options. Cost plus, yes, that is unusual and quite distinct from the fixed price and the very clear fixed price nature that led to so many of the decision points in this process. Beyond that, it perhaps reflects the extent of additional risk that the Government has assumed in continuing to meet the costs of those two ships. On a point related to that, a couple of paragraphs later on in the report, paragraph 108, you inform us that Seymal, who is the purchaser, also became the technical consultant. Doesn't that blur lines and even potentially represent a conflict of interest? The arrangements are unusual, there is no denying that, convener. The paragraph also notes that Transport Scotland no longer has a role in the delivery of the ships and that is quite distinct from where we were. The accountability of the Government's arrangements have clearly changed following the nationalisation of the yard. As we mentioned, the creation of a new public body, Ferguson Marine Port Glasgow following the nationalisation, the consultancy arrangements of Seymal and the Government's role more directly themselves. As to the extent to which it is a conflict of interest, roles and responsibilities have to be clearly defined, especially as they have evolved as they have been set out here. The technical consultant nature of Seymal's role is maybe something that Angela might want to talk about just in terms of how all that is operating and some of the safeguards that are in place. Obviously, Seymal is involved throughout the projects and because of the expertise around the ship building area, that is obviously why they have been selected as the technical consultants for the FNPG to support the Government around that. They are still heavily involved in reviewing what is going on at the shipyard. They have an on-site presence at the shipyard just now and, as we have discussed before, they will raise owner observation reports and discuss issues with shipbuilding staff on an on-going basis. We have heard this morning about how people have applied to court to get settlements and disputes about payments. We have heard about mediation mechanisms being looked at and then abandoned. Seymal is looking at a new environment where it is a cost plus arrangement and a lot of those disputes have been around. If you read evidence submitted to this committee by Jim McCall, a lot of that is about looking at this through the wrong end of the telescope, unfair demands were being placed on us and that is why the costs ended up where they ended up and why the delays ended up where they ended up. That is all because of Seymal and now Seymal is the technical consultant in this environment where it is a cost plus. How do we know, in looking out for the public's money, that that is not a blank check to Seymal to get the highest spec, the technical corrections that will cost an inordinate amount of money upon which there is no limit? I will be very clear, convener. I am sure that the committee will want to be assured that that is not the case, that there is not a bottomless pool of resource available to complete these two vessels. It is undoubtedly the case that many tens of millions remain to be spent on them, as set out in the both the turnaround director's report and the new chief executive's report. However, perhaps with some confidence, as set out by the new chief executive, that the timeline for the completion of the vessels is noted, there needs to be rigorous project management, monitoring in place, deadlines in a way that is distinct from some of the arrangements that we set out in the report. I am sure that the committee will want to be assured that that may inform where you wish to go next. I would like to look at the focus on two different areas, partly based on some of the comments that were made last week. Some of the points are probably parts that the fellow members have brought up, but I would like to get in my own mind the sequence here and get it right, because it is a bit complicated. Seymol, on the other hand, awarded the contract to build the ferries, they were the ones that signed off on it. There was no ministerial direction to do so, so there would be no piece of paper for that. There was no ministerial direction or written authority requested from civil servant accountable officers of ministers. I would say that there is a slight distinction that is also relevant, of course, that ministers were responsible for awarding the approval of the contract. Seymol awarded the contract in its capacity as the procuring authority. Seymol expressed concerns about the absence of the fouries fun guarantee. Seymol put in place mitigations in regard to that. There is a question about the timing on that, because Seymol did not say anything about not being able to comply with the terms of the tender until after the announcement was made, which in itself is a bit odd, because you would have thought at the time of responding to the tender document that you would have said, no, I cannot comply with these bits. We have covered that slightly in part with the discussion with Mr Hoy and also the general manager's response last week that Fergus and Marine Engineering Ltd's concerns about the requirements to offer 100 per cent builders' refund guarantee is our understanding. We are noted to post their identification as the preferred bidder for the contract. I am looking at documents that have been in public demand for a very long time now, and this is the document that was addressed on 8 October 2015 to the ministers. I would like to quote just three parts from that, which I think are quite important. This is the communication to the ministers asking for their confirmation that they are satisfied or that they support the bid. Procurement risk can rarely be removed entirely in complex contracts, and Seymol have addressed that, taking their own legal advice, and in particular by agreeing contractual terms with FML, which are broadly comparable with the tender specification. Again, in case of a challenge, Seymol would robustly defend their position on the basis of the legal advice that they have received and the steps that they have taken to bring the final contract clauses into broad comparability with the tender specification. I think that that is an important point. The last part that I would like to quote is, discussions between Transport Scotland officials and Seymol senior executives on Tuesday 29 September and Friday 2 October, the Seymol senior executives made clear that Seymol would likely be facing similar problems no matter who the preferred tenderer was. Their senior executives also made the point that, despite receiving stronger financial assurances in previous shipbuilding contracts, they still subsequently face problems and, in one instance, significant challenges during the respective construction phase. If I was a Scottish Minister receiving that, I would say that they put in place mitigation, which is broadly covering the contractual tender that went out. Would it be reasonable to give the nod on that? I mean, nobody is denying that they did give the nod, but wouldn't it be reasonable to take that into account? What you have just read out suggests some ambiguity and perhaps distinct from what we set out in our report. I am not sure that we would arrive at the same conclusion that a 25 per cent builders refund guarantee plus some of the additional safeguards is broadly comparable with 100 per cent. The ministers are receiving, and they are being told that it is broadly comparable with the tender specification. Would they have a reason to challenge that? I am going to bring in Antony Wiesack. I think that he wants to highlight a section of the report as well. The advice that they have received and, forgive me, I do not have that in front of me at the moment. Our judgment is that that is not broadly comparable. We see that the nature of the shipbuilding contract, as distinct from some of the other large public procurement contracts that are inevitably considered by ministers more routinely, relies upon the 100 per cent builders refund guarantee to secure the transfer of risk. If you allow me to pause for a second, Mr Beattie, I think that I want to bring in Antony in the distance. I am looking at the detail that has been put in the report and so on. We might sit round this table and agree, but the ministers are only receiving these few papers on which they are basing the decision. I am sorry, Antony, and it may be an area that the committee wishes to explore in detail with some other organisations, but I think that in terms of our response, Antony, I want to say that more. I thought that it is worth drawing out other aspects of the email that you are referring to, Mr Beattie. Annex B of the email contains Eric Ostagard's email on 26 September that is referred to in the note in which he states that, if FML does not get back with substantially improved conditions, in this respect, the board of CML will have no option other than to again reject the deal. That will imply shelving the project until further notice or reopening the contract negotiations with another of the bidders. There are different bits in the information that was provided with ministers offering differing views. The question that you asked about legal challenge, which you referred to, is quite right to say that CML were clear that they would be able to defend the contract. Were it to be let, that does not mean that they were saying that they wanted it to be let, which is a slightly different point. I mean, there is no doubt looking at the documentation that ministers gave approval in some way. What is missing is the piece of paper that says that they did it. That is basically what is missing. However, I do not think that anybody is disputing that that approval was given. At least that is what I would interpret from these documents. What I would say is that, if I was the minister seeing this coming forward, I would kind of be reassured in giving that decision that there was some sort of comparability with the tender specification, because that is what the covering document says. If I may add, I have perhaps referred back to my evidence of last week's discussion with the convener that the extent of concern from CML and how they communicated that to Transport Scotland, I think that we would typically have expected that, if the concern was as such, that that would have resulted in a request for written authority. However, as we know, that was absent as part of the process. Did CML actually give a formal document with detailed concerns that got to the Scottish Minister? I mean, I am not sure. I am asking you. The document that you are referring to, Mr Beattie, which I think I have in front of me, which is an email that went from Richard Hadfield to a number of ministers and others, contains, as Annex B, the concerns that CML was raising at this point of the process. If you look at the annex and then you look at the actual covering document that goes to the ministers asking for their confirmation, it does not seem to match up in terms of concerns. I cannot comment on the content of the advice that Transport Scotland gave to ministers. I can merely refer to the fact that Annex B does highlight CML's concerns. Well, looking at the email that went to the ministers, which did, yes, contain these annexes, if I was a minister reading the covering email on which I am asked to give a confirmation that I am content with this, I would look at the clear indication here, broadly comparable with the tender specification and an assurance that previous financial insurance is with previous shipbuilding contracts subsequently faced problems and so forth. I would say, yes, they seem to have done a decent job there in mitigating the risk. I think that we would probably just reassert the judgment that we reached. There seems to be a mismatch in the strength of feeling that CML had about the scale of risk, the difference from the standard terms and conditions, given the absence of the builders refund guarantee and then how that flowed through in communication to ministers. That is also an issue of real concern. Mr Beattie, if the transparency and the scale of concern that ought to have been shared, if that is somehow being phrased in a way that suggests ambiguity, I apologise for the risk that I repeat myself. We have clearly reached a view that the extent of risk and the management of that through 25 per cent builders refund guarantee and other arrangements is not broadly comparable with a full 100 per cent builders refund guarantee. On the face of it, I would agree, but, as you said, there is ambiguity here. If I was a Scottish minister receiving this covering email, I would just look at the things that are broadly comparable with tender specifications and so on, and say, right, they seem to have done their job. Anyway, that is probably for a different discussion going forward. One of the concerns that I raised last week was about the destination of the money and what happened to the money. We can sort of speculate at the £45 million, which was there for working capital, if you like, paying salaries and keeping the yard ticking over, were used for that purpose, but £10 million went into that yard and there is no evidence at the point of nationalisation that there was that value of work or equipment lying there. The question is what happened to that. You have said that, because it is a private company, Audit Scotland has been unable to carry out a proper due diligence on that. Now that it is nationalised, do we own that history and can we retrospectively look at what happened to that money? There must be a record to some place. Angela Constance can say a bit more about the transfer of entities or what happens, but I think that it is the case that these are separate legal entities. Ferguson Marine Engineering entered administration and subsequent liquidation. Some of the transfer of assets happened through the Scottish Government's security arrangements that it had in place for the provision of the loans as it became a secured creditor and sought to purchase the assets from the administrators of FMAIL. FMAIL's accounts are public record, Mr Beattie. As are Ferguson Marine Engineering's limited holdings, they both report progress of vessels 801 and 802 whilst they were in construction. There is something of a public record and they were subject to external audit, as private companies are. That is not the same as having a complete and full record of a private sector organisations company accounts and the transactions that flowed thereafter. Before I ask Angela Constance to say a bit more about what transpired, I think that it also brings us back to some of our earlier conversations about what assurances FMAIL had about the progress of the vessels, the payments that they were making, what they were making payment for and one of the overall conclusions that we make in the report is that the milestone payments were not linked sufficiently to either quality or progress of the vessels. Before I turn to Angela Constance, you mentioned the loans as well. The first loan was in respect of financial support to Ferguson that was designed to support his working capital, payment of invoices and so forth. The second loan for £30 million was anticipated to be more closely linked to quality and progress but we also set out in the report a judgment that that was not sufficiently clear when the loan drawdown was made available. I will pause Mr Beattie so that I am sure that Angela Constance wants to say a bit more. I have not got much more to add. You mentioned the millions of pounds that had gone to FMAIL as part of the contractual payments that we referred to in paragraph 1. We know from information that CMAIL provided to the Wreck Committee that £62.5 million of that had been spent on materials and equipment and just over £13 million on labour so that that is the information that we have about the kind of high-level areas of spending from FMAIL. At point that the yard was nationalised, the assets in the yard must have been valued. Were they comparable to the money that came in to produce those assets? I think that it is safe to say that no, they weren't. If you look at the... I will make sure that I am quoting the right figure but I think that in the region of £6 million was the figure that the Government was able to secure by virtue of the administration. That does not reflect the extent of payments. However, I should say that I hesitate to make a definitive judgment around that given that we are not cited in the valuation process of a work-in-progress vessel that might have a different valuation as it becomes a working asset. Again, it is not an area that we have explored in any great detail. Is not this an area that should be very important for us to look at? For this committee, one of the key things that we look at is following the public pound. Here we have a situation in which tens of millions of pounds have been poured into a project and at the end of it, there is not much to show, value-wise. I think that ultimately this speaks to the point where we concluded our report and, as I mentioned last week, the need for a fuller and next stage review as to what has been delivered both in terms of the scale of public spending for these vessels, the need for an understanding of the vast sums of public money, what has been produced, and what safeguards are genuinely in place to avoid a repeat, whether it is in ferries or others. However, it is the case, Mr Beattie, that tens of millions of pounds have been spent. Tens of millions of pounds still need to be spent on those vessels in order to get them to be working assets. Is this the review that you are considering doing? Perhaps we will await the finalisation of this committee's evidence to inform where we go next or whether other parties will be taking up the next stage, but it is very clearly part of our forward thinking. It seemed to me that there was an awful lot of evidence in the Rural Economy and Connectivity Committee report that I would have hoped might have led you down that road without waiting for the Public Orch Committee to come out. As you said on a number of occasions, we are satisfied with the scope of our work, set out at a point in time where we are now that the two vessels are very much work in progress. Many millions of pounds have been spent to unsatisfactory progress. We have said in evidence that the Rural Economy and Connectivity Committee considered a range of different views and disputes supported by independent experts and took a clear view about the scope of our report. Do we have time for accountable officers and Governments and all those other things? I am sure that after discussion we will reach that point. I want to, in the remaining few minutes, give an opportunity for Roder Grant to ask questions who is joining us remotely and is, of course, an MSP for the Highlands and Islands, who will hopefully be served by those ferries if they eventually set sail. I will ask a question. Obviously, there is no paper trail here, but when you were doing your investigation, did you ask the accountable officer who, at ministerial level, told them to proceed? I am not sure that we are in a position to answer that today, Ms Grant. We may need to come back to the committee in writing. As you will probably observe, our colleague, who had some of those direct discussions, is not with us today. We had rest assured extensive discussions with officials. We set out in the report the various people that we interviewed as part of the primary evidence gathering sessions. However, in respect of which minister took that decision, again, we are referring collectively that it was a ministerial decision, so we are not excited today, and I suspect that we are not excited entirely as to which minister took that call. You would not have asked the accountable officer directly if they recalled who had made that decision to them. I can commit to coming back to the committee in writing if we have that information. Okay, thank you, and that is helpful. Can I ask a couple of questions about procurement? It seems to me that the whole process of procurement was wrong, but we have also heard in the news recently that the Scottish Government is procuring ferries from Turkey. As is Norway, but Norway is only paying half the price for comparable ferries. Is there something that is very wrong with the Scottish Government's procurement process that leads to them paying huge amounts of money for ferries and maybe not procuring them in a way? Obviously, those ferries that we are talking about now have not been delivered. We have yet to see if the others will be delivered. There is probably little that we can really say. We have not done any audit work on fairly procurement arrangements in the round. I suspect that that is a question for SEMA to assure the Parliament about the overall value for money arrangements that it has relative to other countries if it uses those as a benchmark, other than to just acknowledge the point that we are equally cited as some of the recent press coverage about the relative costs that the Scottish Government is incurring compared to other countries as part of its fairly procurement arrangements. Beyond that, Ms Grant, we do not have any further detailed information. Would that be something that you would look into in the future, given that it is about public spending on the costs to the public first? We are happy to consider where we go next with ferries. That is our second piece of work on ferries following an early report three or four years ago on overall ferry arrangements. We are also awaiting the Government's final decision on ferry governance arrangements in Scotland and how that will shape up. We will use that also to inform our future work programme. That brings us up to the end of the time that we have this morning. Can I take this opportunity to once again thank you order to general for your willingness to answer the wide range of questions that we have put to you this morning and to the team that has joined you Anthony Clark and Angela Canning? We very much appreciate your input too, which has been illuminating. We will of course have to consider what our next steps are. I think that you have given us some suggestions on where it might be useful for us to look further. We will reflect on those and as a committee we will reach our own conclusions on the next steps forward for us. I thank you again for your evidence this morning and I now wish to move the committee into private session.