GMB Union demands Fleet Solid Support Ships are built in the UK
MOD put its Fleet Solid Support programme to international tender on the 30 April on the back of calls from GMB to ensure that the order is placed with a domestic supplier. The Royal Fleet Auxiliary ships are required to service the Royal Navy’s new QE Class aircraft carriers. GMB research shows that up to 6,700 jobs could be created or secured in the UK if the order went to a domestic shipbuilder; 1,800 in shipyards and a further 4,700 in the wider supply chain. The union estimates that £285 million would also be returned to the taxpayer through income tax, national insurance contributions and lower welfare payments. Polling, commissioned by GMB in support of their campaign, found that 74% of those polled want the ships built in the UK.
The Government’s current policy, set out in 2017’s National Shipbuilding Strategy, is to build all warships in the UK. However, support vessels continue to be put out to international tender. It is not certain that any UK shipyards will bid for the work, though the environment is different to when no UK yard bid to support the MARS tanker programme in 2012. Though the Clyde shipyards are at capacity with work on Type 26, other yards, no longer occupied by the carrier block build programme, are likely to be keen to support the programme. GMB maintains that RFA ships are military vessels that are crucial to the UK’s defence capabilities and MOD should not be considering overseas bids. Ross Murdoch, GMB National Officer for Shipbuilding, said “The Government looks set to repeat the blue passports fiasco by putting another order of national significance out to tender abroad. Ministers are not bound by normal EU rules on competitive tendering when it comes to military ships. There really can be no excuse for sending our shipbuilding contracts overseas.”
France says it will consider letting UK join fighter aircraft partnership with Germany
Defence News reported on 26 April that sources in France had indicated that, while the current focused remains on establishing a partnership with Germany on a next generation combat air programme, the UK will in future be considered as a potential third partner on the wide-ranging project. The goal of the Franco-German alliance, initially set out in July 2017, is to design and build a new capability to eventually replace France’s Rafale and Germany’s Typhoon fleets. The intention it that other armed and unarmed aircraft will also be integrated into that programme as an all-encompassing Future Combat Air System. The UK has been working with France on a technology demonstrator for an unmanned combat capability for a number of years, though the project has yet to reach maturity.
Government and industry officials give evidence to Parliament on MIV programme
MOD and industry officials appeared before the House of Commons Defence Committee on 24 April to answer questions on the potential future procurement of the ARTEC Boxer to meet the Army's Mechanised Infantry Vehicle (MIV) programme. MOD announced earlier in the month that, though no contract was yet in place, MOD had re-joined the OCCAR programme with a view to procuring around 500 vehicles without a formal competition. Minister for Defence Procurement, Guto Bebb MP, gave an overall budget figure for the programme of £4.4 billion, including integration, though the final price will depend on the precise UK requirement. ARTEC’s UK managing director, Peter Hardisty, said that work would be conducted throughout the UK, including companies such as Pearson Engineering – who will assemble the Boxer drive module in Newcastle - WFEL, Thales, and Raytheon.
New Chief Executive of DE&S named
The government announced on 27 April that Sir Simon Bollom has been appointed as the new chief of Defence Equipment and Support (DE&S), the procurement arm of the MOD. Sir Simon, a retired Air Marshal, is currently the chief of materiel (ships) at DE&S and has previously served as chief of materiel (Air). His promotion to chief executive follows the unexpected departure of Tony Douglas at the end of 2017. Sir Simon takes up his new post as negotiations on the government’s defence modernisation programme beings to draw its conclusions. Publication is expected by July and, unless more money is allocated by the Treasury to the defence budget, the outcome could see programmes promised in the 2015 Defence and Security Review cut or delayed. Welcoming Simon Bollom’s appointment, Stephen Lovegrove, Permanent Secretary at the Ministry of Defence said, “I am delighted to announce Simon’s appointment as the new Chief Executive of DE&S. His previous roles…means that he will bring to the role a deep understanding and knowledge of DE&S and its business”
MOD launch Submarine Delivery Agency
On 23 April MOD announced the formation of the Submarine Delivery Agency (SDA). The new Executive Agency will lead on the procurement, in-service support and decommissioning of all UK nuclear submarines. This will include prject maangement of the construction of future boats, including the Dreadnought programme that will ultimately replace the current fleet of Vanguard-class submarines that support the UK’s nuclear deterrent. The announcement comes after £800 million was released by the treasury to ensure the Dreadnought programme remains on track to enter service in the 2030s. Headed by Chief Executive Officer Ian Booth, the SDA will brign together a workforce of around 1,300 people.
ECONOMICS OF SHIPBUILDING: Asked whether MOD plans to commission research into the socio-economic effects of (a) the end of shipbuilding at BAE System’s Portsmouth yard and (b) recent job losses at Scottish yards to (i) maintain an evidence base on the effect of employment reductions and (ii) inform its procurement policy, Mr Bebb replied that “Commercial decisions on locations and staffing are the business of the companies concerned and the Ministry of Defence currently has no plans to commission any specific research on the subject. The National Shipbuilding Strategy sets out our ambitions to re-energise the shipbuilding industry in the UK and we will work with industry to achieve that. Our procurement policy follows HM Treasury guidelines, recognising all costs and benefits to the UK of a procurement decision, including socio-economic factors.”
SMEs IN SHIPBUILDING: Asked what steps his Department is taking to support SMEs to tender for contracts issued as a result of the National Shipbuilding Strategy, Mr Bebb replied that “the National Shipbuilding Strategy aims to re-energise the UK's shipbuilding industry by encouraging participation from the wider UK shipbuilding enterprise, ensuring that we receive bids from the widest range of suppliers possible. This will ensure that the UK remains globally competitive, and that the Ministry of Defence procurement process is as competitive as possible. We are committed to making it easier to do business with defence, particularly for small and medium-sized enterprises (SMEs). As part of this we are working to improve our engagement with smaller businesses; making it easier for them to find opportunities and win defence business. Since March 2016 we have implemented a range of measures to support SMEs, including revising our polices, advertising all our contracts above £10,000 online, and requiring our prime contractors to similarly advertise subcontract opportunities. Furthermore, we have introduced a new Supplier Portal page, bringing together the key information for suppliers of all sizes.”
NATIONAL SHIPBUILDING STRATEGY: Asked whether MOD plans to clarify its definitions of the terms (a) warship, (b) complex, (c) war material, and (d) warlike when they are used for shipbuilding procurement, Mr Bebb referred to the 2017 National Shipbuilding Strategy that defines Royal Navy warships as destroyers, frigates and aircraft carriers. He confirmed that MOD does not “…plan to issue any further definitions for the purposes of the National Shipbuilding Strategy.”
SHIPBUILDING STATISTICS: Asked whether MOD is planning to systematically collect information from prime contractors to accumulate data on the spatial distribution of spending on military warship programmes, the Minister for Defence Procurement, Guto Bebb MP, replied that the MOD “…routinely collects statistical data on its direct expenditure with UK Industry and commerce, which includes tables showing expenditure by region and by Standard Industrial Classification (including Shipbuilding and repairing). However, the MOD does not hold regional expenditure statistics at a level to report on more specific activities such as spending on the military warships programme.”
DREADNOUGHT PROGRAMME: Asked to confirm how the £600 million allocated to MOD from the Dreadnought contingency fund for the current financial year will be spent; for what reasons access to additional funds was require; and how much of the £10 billion fund will be spent by the completion of the programme, Mr Bebb replied that “…the Prime Minister announced in Parliament on 28 March (Official Report, column 756), the Ministry of Defence has been given access to £600 million in 2018-19 from the £10 billion contingency for the Dreadnought programme announced in the 2015 Strategic Defence and Security Review. This will allow us to drive out cost and risk later in the programme and ensures best value for the taxpayer. This will ensure the Dreadnought programme remains on track to be delivered on time and within its overall £31 billion forecast.”
FLEET SOLID SUPPORT: Asked which UK and international shipbuilders participated in his Department’s market engagement exercise to the tender for the Fleet Solid Support requirement, Mr Bebb replied that “a total of seven shipbuilders have participated in the Fleet Solid Support ship market engagement activity with the Ministry of Defence. Discussions were held with Babcock International and Cammell Laird from the UK, and with international shipbuilders Daewoo Shipbuilding and Marine Engineering, Damen, Hyundai Heavy Industries, Fincantieri and Navantia. These non-binding, informal meetings have discussed various technical and financial aspects of the project.”
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