Sunday 29 November 2015

British Military Shipbuilding: The Way Ahead


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.
Short term planning continues to dominate Britain's approach to military shipbuilding, resulting in the production of many more OPVs than the Royal Navy actually needs. Better long term planning might have seen the MoD close the gap in orders by ensuring that the start of the Type 26 programme dovetailed with the last of the Batch 2 River Class builds in 2018. As it is currently configured the next generation frigate programme is to deliver one ship every two years, rather than the 1.5 ships per 2 years that the BAE yards should be capable of under the TOBA. This can mean only one of two things: either BAE is unable to meet it's KIC commitment or the MoD is going to build Type 26 at an artificially slowed pace. For the record, my money is on the latter. What this means is that, with the first frigate complete and in the water by 2025 the planned order of 8 won't be completed until 2049. If the follow-on "lighter" frigates are built at the same pace then the last Type 23, HMS St Albans, will leave service in 2049 at the ripe old age of 49. The current situation is ludicrous: ships with an expected hull life of 18 years will serve for more than double that. Even taking into account that the Type 23 hulls haven't been exposed to the harsh North Atlantic climate that prediction was based upon they will very likely serve well beyond their intended lifespan, unless their replacements are accelerated. At a rate of 1.5 frigates every two years the existing fleet of 13 would be replaced six years sooner than at a reduced rate of 1 every two years. If the MoD was serious about prompt replacement of the current frigates then the suggested rate of 1.5 could potentially be increased to a rate of one per year, with some ships being built in blocks at other yards across the UK-similar to the way the Carriers and Type 45 were constructed. While the extensive life extension programme for the Type 23s is vital if the UK is to maintain its fleet of 13 frigates, until their replacements are built, it should not have been necessary. If the Royal Navy is to maintain it's surface fleet at the current inadequate level then it needs industry to supply the yard capacity and skilled workforce to build a complex warship, such as a frigate or destroyer, every year. More importantly, the MoD needs to make full use of that capacity, likely by aiming to regenerate the escort fleet of 19 ships completely every thirty years at a rate of one per year; with the remaining ~11 years in the cycle being used for capital programmes, MCMVs, OPVs, support ships and survey vessels.

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.

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