GUIDING principles for Scottish Government investment in private industries are to be published after a string of problems, the Government’s economy director has said.

Ministers are “finalising” the guidance for when to invest in private businesses at risk of collapse, with intervention required as a last resort when “all forms of other options have been exhausted”.

Director-general for economy Liz Ditchburn told MSPs the new guidance will instruct the Government to consider the strategic, economic, commercial, financial and management cases for any investment.

Asked by Graham Simpson MSP about the “massive amounts of taxpayers’ money” effectively lost in high-profile failed investments, Ditchburn said there were three categories of government investment in the private sector: supporting companies in crisis, “proactive investment for growth” and reactive, policy-driven interventions such as BiFab, Prestwick Airport and Ferguson Marine.

Giving evidence to Holyrood’s Audit Committee, Ditchburn said the decision to nationalise the Ferguson Marine shipyard in Port Glasgow in 2019 was “very much driven by a contractor failure” after the firm went into administration.

The building of two ferries commissioned for CalMac’s Arran, Skye and Outer Hebrides routes have been subject to repeated delays and will cost the Government more than twice the original £97 million fixed-price contract.

On the investment in BiFab – more than £37m of equity and loans – she acknowledged “that has not worked out as hoped”. The fabrication yards, part-owned by the Scottish Government, were put into administration having failed to win contracts to build platforms for offshore wind turbines.

“These cases are all very different and I think they’re driven by very different things,” she said, adding that there wasn’t a “blanket set of reasons around private investment”.

But the development of the new principles will be incorporated in the Government’s Scottish Public Finance Manual (SPFM) “which will again help guide the kinds of decisions that governments need to take,” Ditchburn concluded.