Leonard brands Ferguson Marine employee payment ‘con trick’

A senior Scottish Labour MSP has accused a seconded employee at the yard of operating what he described as a secretive tax-avoidance con trick, after a parliamentary inquiry heard evidence that the Chief Financial Officer of the firm had uncovered unauthorised payment arrangements.

Speaking in the Scottish Parliament during a debate on the Public Audit Committee’s report into Ferguson Marine (Port Glasgow) Holdings Limited, Richard Leonard said the Committee had scrutinised evidence relating to an unusual secondment and payment arrangement involving a senior employee and more than £144,000 in public funds.

Leonard told MSPs that the arrangement, which had been identified internally at Ferguson Marine by the company’s chief financial officer, involved an individual seconded from Caledonian Maritime Assets Ltd who had set up a private limited company and had their Ferguson Marine salary paid directly into it.

“Here we had an employee—seconded from another public sector organisation, Caledonian Maritime Assets Ltd—who decided to form their own limited company in which they were the sole shareholder, in which they were the sole director and into the bank account of which their FMPG salary was paid.”

He said the arrangement ran from February 2023 to March 2024 and totalled more than £144,000, despite never being approved by the yard’s board or remuneration committee.

“Neither the board nor even the remuneration committee had approved this arrangement. A substantial sum of unpaid income tax and national insurance contributions had to be reimbursed to His Majesty’s Revenue and Customs.”

While the Auditor General classified the issue as a governance and transparency failure, Leonard said that description understated its seriousness, “In the lexicon of the Auditor General, this represented a weakness in governance and transparency, and the committee agreed, but it is hard to conclude anything other than that this was, in my lexicon, a secretive, tax-avoidance con trick.”

He stressed that Ferguson Marine is fully owned by the Scottish Government and funded by taxpayers, “We should remember that this is in an organisation that is 100 per cent owned by the Scottish Government and so 100 per cent owned by us, and which exists in the first place only because of all of us paying all our taxes.”

Leonard also highlighted failures around senior exit packages, saying three employees received payouts exceeding £95,000, above the threshold requiring advance government approval, “Three employees left with pay-outs above £95,000—which not only is a considerable amount of public money, but is above the threshold that requires advance Government approval—but this happened with only one out of the three exit payments.”

He questioned the absence of oversight. Leonard also said the scale of historic weaknesses meant ministers must maintain close scrutiny of the yard’s internal audit arrangements. Despite the criticism, Leonard made clear that the committee’s objective was to secure the yard’s future and protect its workforce.

“The Public Audit Committee of this Parliament wants modernisation in the yard. All we want is for the workers to be given a fighting chance to compete for future work.”

He argued that repeated failures stemmed from excluding workers from decision-making, saying “We think that the workforce should be at the centre of decision making, not at the margins of it.”