February of 2012 saw a new low for UK military shipbuilding, with almost all it's capacity tied up in the Carrier programme, not a single British firm put in a bid to build a class of 4 new fleet tankers for the RFA. Instead the order went to a yard in South Korea, with experience in building double hulled tankers- the new international standard - that no UK company can match. From the standpoint of the Royal Navy, MoD and Treasury this was absolutely the right decision. The ships are now arriving on time and under budget, reducing pressure on spending elsewhere. Decisions like this though fly in the face of good military-industrial strategy. The carriers have provided a glut of work for UK shipbuilders (equivalent to 20 Type 45 destroyers!). Over the last six years ~7,000 people have been employed across six yards building blocks for Queen Elizabeth and Prince of Wales, with a further ~3,000 further down the supply chain. The construction of ships this size has demonstrated that warship building capacity by tonnage is still relatively high. A single job, however, does not make for a robust long term industrial strategy. This isn't about the here and now, it's about maintaining the ability to build ships of this size 50-100 years into the future. The failure of any UK firm to tender a bid for the MARS tankers demonstrated there are hard limits to what we can ask of our yards, and increasing those limits would be a difficult and costly task to do quickly. This is not an industry that can be readily scaled to meet the needs of the naval service. The near-death state of the UK commercial shipbuilding sector exacerbates this fact, unlike in the past we can no longer call upon a range of civilian yards to rapidly expand our ability to produce warships and auxiliaries in the event of a crisis.
A robust military shipbuilding sector is not simply something that's "nice to have" for the UK, but a vital strategic industry. One which is currently on life support. The Chancellor's grand sounding "national shipbuilding strategy" essentially amounts to stringing out the minimum amount of work possible to keep some yards open and experienced workers employed. After the completion of HMS Prince of Wales three Batch 2 River class OPVs will be the only warships under construction in the UK. It is lamentable that the recent SDSR has pushed the T26 programme even further to the right, with the first of class now not expected until 2025. What this means is that the UK is committed to building two more of the Batch 2 River class OPVs, likely at a similarly inflated cost and slowed build schedule as the previous three, under the terms of business agreement (TOBA) with BVT Surface fleet; which guarantees a minimum amount of work for their yards. This agreement exists in order to sustain the key industrial capability or KIC to "build and integrate a complex warship of up to 5,000 tonnes deep displacement at an interval of 1 shipbuild every 12 months" which the MoD pays to maintain even if it isn't actually using the yards to capacity. Bluntly, the 2009 TOBA is a costly life support system for the UK military shipbuilding sector, it exists because successive governments have refused to consistently order the warships necessary to sustain vital industrial capacity. The paucity of orders means that the ships the UK does build are constructed slowly, to retain essential skilled jobs and experience, driving up costs and killing any chance of exporting the design.
|The 2009 TOBA guarantees a minimum level of work in exchange for maintaining|
a set level of shipbuilding capacity.
Getting the best value for money out of our current shipbuilding establishment is first and foremost a matter of efficiently using the capacity available to us, rather than deliberately underutilising it. It is a matter of long term planning, raised expectations, regular orders and more rapid delivery. We are now seeing the consequences of not planning ahead: artificially slowed build rates which save industrial capacity but fail to meet the needs of the navy, construction of an unnecessary number of OPVs at an inflated cost, and the shameful under use of yard capacity we are paying for whether or not we're using that capacity to build ships that the navy needs. Some will make the argument that the government should simply abandon an unsustainable UK military shipbuilding sector, allow it to fail and buy its warships from abroad. I cannot stress how much I disagree with this view. BAE have been expensive and inefficient in the past, but the much of the money invested in UK-based military shipbuilding is recycled back into the British economy; whereas building abroad would add to our balance of trade deficit and contribute little to the national economy. It is also worth speculating that without the incentive to "build British" and support jobs at home, politicians would be even less likely to consider investment in the Royal Navy a worthwhile pursuit. So, we come back to my initial sentiment: UK-based military shipbuilding is a vital national industry. However, its current structure is failing to deliver the yard capacity and build rates that the Royal Navy requires to replace it's hulls on a one for one basis. I would suggest that the current situation will only improve if the MoD develops and implements a long-term shipbuilding strategy, suited to the navy's needs, rather than simply talking about one.