A BOMBSHELL report from the public spending watchdog has cast doubt over the future of Ferguson's shipyard, criticised bonuses and warned the bill for the two CalMac ferries could rise.

Audit Scotland bosses say there is 'doubt about the longer-term viability of the nationalised yard despite sustained investment by the Scottish Government'.

Its report says the workforce, while skilled, is ageing and having to be supplemented by the use of contractors and that bosses have reported 'there are limited shipbuilding skills available in Scotland' and being unable to compete with the private sector for skilled staff.

The report also warns that there is uncertainty over the final costs and completion dates of Glen Sannox and Hull 802, which are already five years late and hugely over-budget.

The independent body also raises concerns about the payment of performance bonuses to senior yard managers despite the ferry shambles.

The two vessels are currently estimated to cost £293m and despite additional Scottish Government funding from 2022-24, latest estimates suggest around £9.5m more will be needed to complete them.

The auditor general's report reveals that during October to mid-December last year the shipyard made 'expenditure commitments' of between £10-£15m more than the government had allocated it for the year, and didn't know whether ministers would agree to cover them.

The report says the government has assured Ferguson's there will be financial support for at least another year, enabling delivery of the ferries, with approval needed from the Scottish Parliament.

The government has already announced additional funding, of £15m in December 2022 and a further £6m two months later but he auditor general says further investment in the shipyard and workforce will be needed to win future contracts.

The government has commissioned an 'independent review of options' for the yard which is due to report shortly and Audit Scotland have urged Ferguson chiefs and ministers to 'clarify plans for the future of the yard as soon as possible'.

Audit Scotland's report also highlights how £87,000 of 'performance bonus payments' were made to six senior Ferguson's managers during 2021/22.

But it says it isn't clear how their performance was assessed and that government approval should have been sought.

A yard spokesperson says the current board have 'accepted the feedback from the Auditor General' with regard to the bonuses.

Stephen Boyle, Auditor General for Scotland, said: “It is deeply concerning that the costs to complete these ferries have continued to escalate, whilst the island communities these boats are meant to serve remain significantly impacted.

“Despite substantial sums of public money being invested, there is still no certainty over how much the ferries will cost, when they will be ready or whether the shipyard has a viable future.

“It is unacceptable that performance bonuses were awarded to senior managers at the shipyard, without proper governance for such payments.

"The Scottish Government needs to make sure its rules over pay are followed by this public body.”

Responding to the report, David Tydeman, chief executive of Ferguson's, said: “We appreciate the points Mr Boyle is making regarding the completion of the ferries/funding gap, given that the shipyard is funded by public money.

"However, it is important to understand that the gap he identifies is largely to cover increased contingency expenditure – recommended by independent experts appointed by the Scottish Government, as well as funding for additional warranty spend that may arise in the 12 months after we hand over the vessels.

“We believe there is a strong future for the yard based on two visible pipelines: winning further shipbuilding contracts from CMAL as well as contracts for BAE to support its T26 frigate programme by building modules within the yard ready for assembly at its Govan shipyard.

"We already have some staff seconded to Govan and the arrangement is working well.

“We intend to submit a strong bid for CMAL’s small vessel replacement programme and believe we are well placed to win this contract, given our experience of exactly this type of work in the past.

"Securing this business, alongside completion of the two dual fuel vessels, is now our primary focus and central to the future of the yard."