2017 National Shipbuilding Strategy
The report by Sir John Parker examining Royal Navy shipbuilding published 29 November 2016 called for fundamental changes to the way UK naval shipbuilding is undertaken. The government commissioned Sir John, chairman of mining company Anglo American, to investigate how British naval shipbuilding could remain sustainable and focus on exports.
It provided a balanced critique of the challenges faced by Government and Industry in the naval shipbuilding enterprise in recent years. Government hasn’t been able to afford the desired number of naval ships because the cost and time taken to procure naval ships has increased. At the same time Defence has not injected the pace required into the procurement process, provided grip or had a clear grip over its requirements, cost and time. This has caused a reduction in the number of UK naval ships, and a contraction of the industrial base.
Following six months analysis, the Industrialist’s report recommended that the Ministry of Defence end its exclusive deal with BAE Systems. The company is building two aircraft carriers and has a contract for eight Type 26 frigates. The report recommended that future contracts be put out to tender, allowing other businesses to bid on them. It had yet to be confirmed where the eight smaller general purpose Type 31 frigates will be built.
Sir John recognized the Type 26 Global Combat Ship (Type 26) as a critical project for the Royal Navy and the Nation. He recommended that, subject to finalisation of contract negotiations, the complete series of Type 26 should be contracted to BAE Systems. He also recommended that the new class of lighter General Purpose Frigate (Type 31e), should be given priority, both to maintain and then grow the number of frigates in the Royal Navy fleet and to stimulate exports sales. He recommended that the Type 31e should be built in a distributed fashion around regional UK shipyards via a lead shipyard or alliance. He believed that this should reduce the build time for the project in comparison with conventional construction in a single shipyard.
The Defence Secretary, Sir Michael Fallon, said that Sir John’s report would provide a “fundamental re-appraisal” on the UK’s naval shipbuilding industry. He said: “The government welcomes this report and shares Sir John’s ambition for shipbuilding. We are committed to deliver a National Shipbuilding Strategy. ...We see it as a vital part of our Industrial Strategy to rebalance Britain. We will examine its detailed recommendations to inform our National Shipbuilding Strategy that will be published next spring.”
In the forward to the 2017 National Shipbuilding Strategy, Secretary of State for Defence Michael Fallon wrote : "In a post-Brexit world, the need for us to project our influence, to keep reaching out to friends and allies alike, will be more important than ever. That’s why we are investing billions in the Royal Navy over the coming decade. Our larger future fleet will include: our two mighty flagships, the Queen Elizabeth class aircraft carriers; next generation Dreadnought submarines; Type 45 destroyers; and a phalanx of new frigates - not just Type 26 Global Combat Ships but a flexible and adaptable general purpose light frigate - the Type 31e. These new frigates, the T26 and T31e detailed in this strategy, represent a significant proportion of the billions we are spending on the procurement of surface ships over the coming decade."
The Royal Navy will, with the arrival of the Type 31e frigates, have increased flexibility. This will allow the Royal Navy to refocus offshore patrol vessels and other craft on their core patrol and presence roles, while the Type 31e ships will maintain the points of presence required to deliver security in an uncertain world. This then will allow the high-end capabilities of the Type 26 frigates and Type 45 destroyers to focus on the Maritime Task Group operations (particularly Carrier Strike), as well as the protection of the Nuclear Deterrent.
The supply chain, which includes material, components, equipment and systems, contribute the majority of the value of a naval ship. While the shipyards are iconic, and enablers of prosperity in their regions, the supply chain provides the propulsion systems, the weapons, the combat systems and the full array of equipment that transforms hulls into fighting ships. It is here that much of the economic value to the UK resides.
Shipbuilding for the Royal Navy has historically provided a fluctuating source of business for a number of shipyards in the UK. It has been insufficient in volume and too cyclical to sustain globally competitive businesses alone. Defence needs ships and systems that are exportable. Exporting ships will not only fuel industrial growth and prosperity, it will reduce the costs of procurement over time and increase interoperability with allies.
The Royal Navy is creating a 30 year Royal Navy shipbuilding Master Plan. This will document the schedule and capabilities of ships we will invest in over the next 30 years, and will be the mechanism to monitor the delivery of those ships to time, cost and performance requirements. The Plan will detail the Ministry of Defence’s long-term programme of work, and will provide Industry with the strategic direction they need from the Ministry of Defence. The Master Plan will be used by the Client Board to manage the future shipbuilding portfolio. The Client Board will use this understanding to balance the portfolio and inform the timing of when decisions need to be taken to replace capabilities and, should the Navy choose to replace the platform, when the procurement process will begin.
- Type 26s will be built on the Clyde. MOD signed a contract with BAE Systems for the first batch of three Type 26 Global Combat Ships, and had already cut steel. MOD will replace the 8 Type 23 Anti-Submarine Warfare frigates on a one-for-one basis with the 8 Type 26 Global Combat Ships. Type 26 will deliver the Anti-Submarine Warfare capability required to protect the Continuous at Sea Deterrent and Carrier Strike Group. All Type 26s will be built by BAE Systems
- MOD launched a competition to prove the Type 31e concept with a £250m per vessel price cap, first vessel to be in service by 2023. If Industry proves unable to meet the challenge, MOD will revise our plans. The 5 Type 23 general purpose frigates will be replaced with a class of Type 31e general purpose frigates. The first will be in service by 2023 and MOD required each new ship to come in at 12 month intervals.
- The Fleet Solid Support ships will be subject to an international competition which was due to complete by early 2020.
For all of future surface ship procurements, we will consider distributed block building as well as build and assembly in one shipyard. Starting with the Type 31e, the Royal Navy will determine the optimum economic service life for each future class of ship, which will balance initial purchase costs, through life and capability costs.
MOD intended to use the Type 31e as the pathfinder for the delivery of the new shipbuilding and capability vision set out in this Strategy. Alongside the traditional measures of performance, cost and time, Type 31e procurement will focus on the enterprise objectives of invigorating and sustaining the industrial base in the UK.
The Strategy explicitly says all other naval ships, including Royal Fleet Auxiliary ships and other Navy ships such as patrol, mine countermeasures, hydrographic and amphibious ships, should be subject to open competition, unless there are compelling national security reasons to constrain a particular procurement to national providers. Military customisation – the integration of sensitive UK-specific systems – will be undertaken in the UK, usually after competition between UK providers.
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