Queen Elizabeth CVF - Manufacturing Phase

The second and final Main Gate approval, to proceed with the Manufacturing Phase of the project was announced by Secretary of State on 25th July 2007 at a not to exceed cost of £3900m including the capitalised Assessment Phase costs and Demonstration Phase costs.

In March 2006, the UK agreed a Memorandum of Understanding that provides for the supply to France of a common baseline design data pack to enable French industry to bid for the design, manufacture and support of one Future Aircraft Carrier (France). France has paid an initial entry fee and contributed to the costs of the UK Demonstration Phase.

At the time of the Main Gate in 2007, the build strategy called for one of the Lower Blocks to be constructed at the BAE Systems Submarines yard in Barrow-In-Furness. BAE Systems needed to build a new facility - the Central Assembly Shop - in order to accommodate the construction of the block. It was envisaged at the time that the facility would also be beneficial to the future submarine program. MOD authorised BAE Systems to begin site work in June 2007. In July 2008 the Alliance Management Board agreed to the reallocation of Lower Block 3 to the A&P Tyne yard on a 'best for project' basis and in December 2008 the Aircraft Carrier Alliance formally instructed BAE Systems to terminate the contract and fully justify any incurred costs. It was hoped that the work carried out in Barrow would be of use to the future submarine programme, however this did not come to fruition which led to a write-off of £8m in Financial Year 2009-10. Following Main Gate approval the project moved into the Engineering Transition Phase, an extension of the Demonstration Phase to encompass the period prior to contract signature. On 3rd July 2008 a contract was signed with BVT Surface Fleet for the manufacture of the two carriers together with signature of an Alliance Agreement with all members of the alliance.

On 11 December 2008, Ministers announced the outcome of MOD's Equipment Examination including the intention to re-profile the Queen Elizabeth Class project to meet near term priorities and improve the scope of alignment with the Joint Combat Aircraft programme. The re-profiling measure removed £450M from years 1 to 4 and delayed In Service Dates by 1 and 2 years. The cost estimates of the impact of the Examination on the project were approved by the MOD in February 2010.

The first cut of steel took place in July 2009 at the Govan shipyard in Glasgow, and manufacture is underway in five UK shipyards: Babcock Rosyth and Appledore, BAE System Govan, Portsmouth and A&P Tyne. This work will expand to the final shipyard in 2010.

During 2009 a number of significant milestones were achieved: completion of No.1 dock at Rosyth; delivery of an upper deck section from Appledore to Rosyth; delivery of the Highly Mechanised Weapon Handling System and the delivery of Emergency Diesel Generators. In addition the preparations and equipment procurement have proceeded with equipment subcontracts placed to date in excess of £1000m, at the close of the Financial Year in March the bow of the Queen Elizabeth departed from Appledore for Rosyth.

The Aircraft Carrier Alliance acknowledged that there was a requirement to reduce costs at the time of contract award on the basis that concerted management action in the early years of the project would allow this to reduce. In the event, the disruption caused by initial recosting activity and then the Equipment Examination prevented successful delivery of the originally planned cost reduction - as this would not be achieved, MoD considered it prudent to formally recognise this in its revised estimate.

At the end of March 2010 the Final Target Cost figure for the Queen Elizabeth Class was estimated to be £5254m, giving a total forecast cost of £5900m including associated cost of capital. Negotiations are ongoing and the contractual Final Target Cost is due to be agreed with the Aircraft Carrier Alliance by December 2010. As of September 2010 In Service Date estimates were May 2016 for HMS Queen Elizabeth and December 2018 for HMS Prince Of Wales. Queen Elizabeth Class In Service Dates will be declared by the Customer when the ship is ready to proceed to a full test of the operational capability of the vessel at sea.

Initial Operating Capability was expected to be declared once the vessel has successfully completed Tier 1 Operational Sea Training and the Operational Readiness Inspection. The Full Operational Capability will be largely determined by the combination of Joint Force Air Group elements and the Queen Elizabeth Class Incremental Acquisition Plan. Full Operating Capability will therefore be defined once the Joint Combat Aircraft and Maritime Airborne Surveillance & Control delivery programmes and the Initial Approved Plan are agreed. Full Operating Capability will allow Queen Elizabeth Class to have an embarked Joint Force Air Group and a level of capability equivalent to that declared at Main Gate.

The October 2010 Strategic Defense Review stated that "As currently designed, the Queen Elizabeth will not be fully interoperable with key allies, since their naval jets could not land on it. Pursuit of closer partnership is a core strategic principle for the Strategic Defence and Security Review because it is clear that the UK will in most circumstances act militarily as part of a wider coalition. We will therefore install catapult and arrestor gear. This will delay the in-service date of the new carrier from 2016 to around 2020. But it will allow greater interoperability with US and French carriers and naval jets....

This new carrier-strike policy is consistent with the Strategic Defence and Security Review's overall approach of holding defence capabilities at different levels of readiness appropriate to the strategic context. It makes strategic sense to focus on developing a more effective and appropriate carrier-strike capability to deal with the uncertain evolution in type and scale of potential threats from various states in the next decade and beyond. To provide further insurance against unpredictable changes in that strategic environment, our current plan is to hold one of the two new carriers at extended readiness. That leaves open options to rotate them, to ensure a continuous UK carrier-strike capability; or to re-generate more quickly a two-carrier strike capability. Alternatively, we might sell one of the carriers, relying on cooperation with a close ally to provide continuous carrier-strike capability. The next strategic defence and security review in 2015 will provide an opportunity to review these options as the future strategic environment develops. Retaining this flexibility of choice is at the core of the Government's adaptable approach."

There is some confusion in press coverage of this announcement concerning whether both carriers are to be converted with catapults, or whether only the second carrier, HMS Prince of Wales, will be so modified. But the reference to the delay the in-service date of the new carrier from 2016 to around 2020 indicates that both carriers are to be re-designed, since 2016 was the in-service date projected for HMS Queen Elizabth prior to the Strategic Defense Review.

The two new carriers will be built, as penalty clauses in the at a cost of £5.2billion contract mean it would be more expensive to scrap one. The Queen Elizabeth will be a £3 billion 'white elephant' according to critics, that might never carry any fixed-wing aircraft and will be mothballed or possibly even sold after just three years in service. The Queen Elizabeth might carry just helicopters for a year before the American F-35 Joint Strike Fighter jets come into service in 2020. When the second carrier - Prince of Wales - arrives, the Queen Elizabeth will be put into 'extended readiness' - military terminology for mothballing.

HMS Prince of Wales was to be modified at an additional cost of up to £750 million to include an electromagnetic system of catapults to launch aircraft, and a drag wire to help them land - so-called cats and traps. That will enable the MoD to buy the cheaper version F-35C of the Joint Strike Fighter jet, rather than the F-35B variant that conducts short take-offs and vertical landings. The MoD is expected to slash its order of jets from 138 to about 40.

HMS Prince of Wales would be available to the French while their Charles De Gaulle carrier is being refitted. The French carrier will be available for the British government when the Royal Navy carrier is undergoing refit. But each country wolud have had a veto on where their ship is sent.

In May 2012, the Secretary of State announced the Department's decision to cancel Conversion, and to revert to the pre Strategic Defence and Security Review position of operating the Queen Elizabeth Class as a Short Take-Off and Vertical Landing platform. The decision to revert will result in a write off of costs accrued up to 10 May 2012. As of the end of April 2012, up to £44m had been committed and the Department will be liable for associated rundown costs.

The Goliath Crane was delivered to Rosyth in March 2011. It was assembled and tested over the next two months and was commissioned (ready for use) in June 2011 with steelwork beginning on HMS PRINCE OF WALES’s Lower Block 03 at Govan, with a formal steel cut ceremony held on 26 May 2011. Lower Block 03 for HMS Queen Elizabeth Class arrived at Rosyth No.1 Dock in early September from Govan, with work to join Centre Block 03 (Tyne) to Lower Block 03 later in the month marking the start of the assembly phase on the project. Over the next few months, Sponsons 03-06 were attached, with the final Sponson (05) join completing in February 2012. Work has continued across all six shipyards involved in the project.

As of January 2013, analysis that both the Project Team and Cost Assurance & Analysis Services support suggests that Contract Acceptance Dates for the two Queen Elizabeth Class vessels should be June 2016 for Queen Elizabeth and September 2018 for Prince of Wales. Allowing for transition from Contract Acceptance Date to In Service Date gives a revised In Service Dates as October 2016 and December 2018.