Swinney gave ‘budget approval’ for ferries but ‘was not aware of risks’

John Swinney has said he gave “budget approval” for the ferries contract with Ferguson Marine, but a spokesman for First Minister Nicola Sturgeon said he was not aware of the financial risks.

The Deputy First Minister said he did not approve all contracts while he was finance secretary and there would be “significant inefficiency” if the government operated in such a way.

An email trail released on Wednesday shows former transport minister Derek Mackay was responsible for the approval of a contract in 2015 for Ferguson Marine to build two ferries – which are set to be delivered at least five years late and two-and-a-half times over budget.

But the same trail shows a finance official asking for the award to be delayed until Mr Swinney, as the then finance secretary, could be briefed.

Another civil servant asked for confirmation there were no “banana skins” after Mr Swinney was informed of the parameters of the deal – which ferry procurement body Caledonian Maritime Assets Limited had raised concerns about after Ferguson Marine said it could not offer a full builder’s guarantee.

In the final email in the trail, the finance official said: “Just finished my call with Deputy First Minister (Mr Swinney).

“He now understands the background and that Mr McKay (sic) has cleared the proposal. So the way is clear to award.”

Following First Minister’s Questions (FMQs) on Thursday – where the issue was raised – Mr Swinney spoke to journalists in Holyrood.

He said: “As finance secretary at the time, I’m responsible for providing the budget for the meeting of any contracts.

“What officials were doing was briefing me that there was no need to change the budget arrangements based on the contract that had been agreed and approved by the transport portfolio, and which of course is confirmed by the email trail you got yesterday.”

Asked if he gave it the nod, the Deputy First Minister said: “What I gave was the budget approval, which I had given in August.

“And the budget approval I gave in August of 2015, the officials assured me on October 9 did not need to be changed.

“The finance secretary does not approve all contracts, if that was the case there would be significant inefficiency in the processing of contracts within government.”

Responding to another question, he said: “I didn’t give it the final nod.

“I was given assurance that the budget provision that I had put in place in August was adequate for the contractual arrangements.”

But a spokesman for First Minister Ms Sturgeon later told journalists the then finance secretary had not been briefed on the financial risks in the contract.

Ferguson Marine had previously stated it could provide a full refund guarantee, before claiming only 25% could be offered – leaving taxpayers with a potential bill of £48.5 million if the contract was cancelled.

“The submission was, as we know, to Derek Mackay as transport minister,” he said.

When asked again if the then finance secretary was not made aware of the risks associated with the contract, the spokesman added: “That’s my understanding.”

Earlier during FMQs, Scottish Conservative leader Douglas Ross accused Mr Swinney of “signing off” the deal.

Responding, the First Minister said: “I think all that Douglas Ross is displaying right now is his own utter desperation.

“The Deputy First Minister did not take the decision, he wasn’t even copied in to the advice of October 8 that was the basis of that decision, he was simply briefed on that decision after it was taken – not even at his request, but on the initiative of an official.

“It is not unusual, really not unusual, for finance secretaries to be briefed on all sorts of decisions that involve the spending of money – it does not mean the finance secretary has actually taken the decision.”

Mr Ross continued: “It’s very clear in here how officials escalated to John Swinney, waiting for his green light.

“In these emails, civil servants state that the Deputy First Minister confirmed the ‘absence of banana skins’.

“John Swinney couldn’t find a single banana skin, when they were absolutely littered around him – there were more banana skins in this project than there are in the monkey house at Edinburgh Zoo.

“We now know all of this, but what we don’t know is why the Deputy First Minister ignored all those banana skins.

“The most crucial document in this affair is still missing – the one that explains why John Swinney charged ahead against expert advice.”

Ms Sturgeon maintained Mr Swinney was briefed on the issue but it was Mr Mackay who had already made the final decision.

Mr Ross pushed for a statement on Thursday from Mr Swinney “to hear why he forged ahead with the deal that has cost taxpayers a quarter of a billion pounds”, adding there is a “stench of cover up and corruption” around the issue.