The Strategy is ambitious but MOD need to show intent in delivery | EEF

The National Shipbuilding Strategy

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The National Shipbuilding Strategy is MOD's response to Sir John Parker's 2016 independent report that identified a ‘vicious cycle of chaotic planning and delays’ that have driven up costs on complex warship programmes such as the Type 45 destroyer. Sir John’s most significant recommendation was that MOD should drive efficiency by introducing domestic competition into the sector, advice carried through into the new strategy. Future programmes will follow a block-build model in a mix of naval and commercial yards across the UK, with a competitive tender for each module. Manufacture will then take place simultaneously before transfer to an integrator for assembly, thereby speeding up production time. This marks a potential break with the MOD's longstanding approach of consolidating all complex warship construction at BAE Systems’ shipyards on the Clyde in order to sustain critical mass in infrastructure and skills.

Block build as a concept is not new. The industry alliance responsible for the Queen Elizabeth carriers adopted a modular construction programme, which were integrated by an alliance of BAE Systems, Babcock and Thales after construction at yards across the UK. Similarly, the new polar research vessel, RSS David Attenborough, is being block-built by Cammell Laird in partnership with A&P shipyard. However, this is the first time that such a strategy has been adopted for reasons of efficiency rather than scale. The Type 31e, a new general purpose frigate for the Royal Navy, will be the template. The first of the 5-ship class is expected to be on-contract next year, entering service in 2023. In a first for MOD, it will be built in parallel with the more advanced Type 26 frigate, the first 3 of which were ordered from BAE Systems in July.


BAE's proposal for the Type 31e frigate

The challenge the new strategy will need to overcome is that the UK procures warships in relatively small volume and MOD has a track record in scaling back programmes. Only 8 of the planned 12 Type 45 destroyers were constructed, and the Type 26 programme has already been reduced in scope from 13 to 8 vessels. It will be imperative that MOD demonstrates through the new strategy that it has sufficient commitment to deliver on its intentions, and work to drive real opportunity across the sector, particularly at a time when MOD’s budget is widely acknowledged to be under extreme stress. Only then will industry be confident to invest in the skills and infrastructure necessary to achieve the economies of scale and skills retention that the strategy is aiming for. It is welcome that the strategy recognises the importance that exports will play in achieving the production volumes necessary to ensure a profitable construction drumbeat. Establishing a unit price ceiling (£250M) for the Type 31e that takes into account the expectations of potential customer governments is evidence that MOD acknowledges the importance of realising a capability that meets both Royal Navy and export-market expectations.

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