Theresa May defends due diligence into scrapped contract ferry firm Seaborne

Louis Ashworth
Follow Louis
Government Ministers Meet For Their Weekly Cabinet Meeting
Transport secretary Chris Grayling has faced calls for his resignation over the cancelled contract (Source: Getty)

Theresa May has claimed proper due diligence was carried out in the government’s aborted ferry contract with Seaborne Freight despite consultants saying they could not assess its finances.

Pressed by Labour leader Jeremy Corbyn at prime minister’s questions today, May insisted “proper due diligence was carried out” in the procurement of a contract for ferrying services in the event of a no-deal Brexit.

Transport secretary Chris Grayling has faced calls to resign after the government announced it had scrapped a £13.8m contract with Seaborne after Irish company Arklow Shopping, which had financially backed the ferry firm, withdrew its support.

Read more: Seaborne Freight's no-deal Brexit contract scrapped by government

Seaborne’s capabilities were called into question after it was revealed the recently-established company owned no ferries, and appeared to have lifted the terms and conditions on its website from a food delivery company.

Grayling said on Monday that “not a penny of taxpayers’ money has gone, or will go, to Seaborne”, but was accused by Labour of misleading parliament by not including the cost of getting external consultation on the contract.

A report by the National Audit Office (NAO), released on Monday, found the DfT had spent “approximately £800,000” on external consultants for the ferry contract, hiring Slaughter & May, Deloitte and Mott MacDonald.

Deloitte’s assessment of the financial stability of the bidding firms, which gave them a numerical score for “robustness”, was not carried out on Seaborne.

“The standard tests could not be completed on Seaborne given a lack of existing financial information due to it only being incorporated in April 2017,” the NAO wrote. “Deloitte therefore did not make a formal assessment of Seaborne financial stability.”

Read more: Grayling accused of 'misleading' parliament over Brexit ferry contracts

A DfT spokesperson defended the contract’s award, saying it had reached a special agreement based on the firm’s position, and claiming Deloitte’s inability to assess the firm’s finances was taken onboard as part of the assessment process.

They told City A.M.: “there have been no substantiated allegations against Seaborne Freight that would have prevented us from signing a contract with them. As with all contracts, we carefully vetted the company’s commercial, technical and financial position in detail before making the award.”

Deloitte declined to comment.

Mott Macdonald, which was charged with assessing the technical capacity of the bids, said the other two bidders – Brittany Ferries and DFDS – were prepared to provide additional capacity, but flagged “significant execution risks” related to Seaborne’s bid.

May told MPs today “there would have been a cost attached to this process, regardless of who the contracts were entered into with”.

Andy McDonald, the shadow transport secretary, said: “The Prime Minister’s claims about Seaborne Freight today are utterly risible. Not being able to undertake thorough checks doesn’t mean proper checks were done.”

“It’s clear that Theresa May’s judgement is on a par with that of her shambolic transport secretary,” he added.

Providing Brexit-related advice for the government has turned into a lucrative business, with Sky News reporting last month that £75m in contracts had been awarded to some of the world’s biggest consultancy firms.