In a vote in July 2016 the House of Commons approved the decision to maintain the UK’s nuclear deterrent beyond the early 2030s. After almost a decade of work on the project (the Successor programme), that vote subsequently enabled the programme to move forward into its manufacturing phase, which will see the construction of four new Dreadnought class ballistic missile submarines over the next 15-20 years.Jump to full report >>
In a vote in July 2016 the House of Commons approved the decision to maintain the UK’s nuclear deterrent beyond the early 2030s. After almost a decade of work on the project (the Successor programme), that vote subsequently enabled the programme to move forward into its manufacturing phase, which will see the construction of four new Dreadnought class ballistic missile submarines over the next 15-20 years.
What is the Dreadnought programme?
Although commonly referred to as “the renewal or replacement of Trident”, the Dreadnought programme is about the design, development and manufacture of four new Dreadnought class ballistic missile submarines (SSBN) that will maintain the UK’s nuclear posture of Continuous at Sea Deterrence (CASD).
A Common Missile Compartment (CMC) for the SSBN, which will house the existing Trident strategic weapons system, is being developed in conjunction with the United States.
Replacement of the Trident II D5 missile itself is not part of the programme. The UK is, however, participating in the US’ current service-life extension programme for the Trident II D5 missile, which will extend the life of the Trident missile potentially to the early 2060s. Decisions on a replacement warhead have also been deferred until later in this Parliament.
Under changes introduced in the 2015 Strategic Defence and Security Review (SDSR), the first Dreadnought SSBN is now expected to enter service in the early 2030s and will have a service life of at least 30 years.
Delivery of the Programme
Recognising that the Dreadnought programme is one of the largest Government investment programmes going forward, the 2015 SDSR made a number of changes to the structure of the project, specifically with reference to governance and oversight of delivery.
A new delivery agency
New organisational and managerial arrangements for the UK’s defence nuclear enterprise as a whole, and for delivering the Dreadnought programme specifically, were outlined in SDSR15. A new team within the MOD (Director General Nuclear), headed by a commercial specialist, has subsequently been established to oversee all aspects of the nuclear enterprise.
A new Submarine Delivery Agency has also been established, which became an Executive Agency of the MOD on 23 April 2018. That agency will manage the procurement and in-service support of all current and future nuclear submarines, including Dreadnought. It will sit alongside the MOD’s Defence Equipment and Support (DE&S).
In tandem, the MOD and its two key industrial partners on the dreadnought programme: BAE Systems and Rolls Royce, have recently formed a new commercial alliance in order to jointly deliver the programme.
Where is the programme at?
In May 2018 the MOD signed contracts for the second phase of the build programme. Delivery Phase 2, which is expected to be a three-year phase of work under the management of the Dreadnought Alliance, will continue the design and build of the first Dreadnought submarine and commence the build of the second, including furthering the design and manufacture of the nuclear propulsion power plant.
Jobs and Industry
BAE Systems, Rolls Royce and Babcock International are the Tier One industrial partners in this project. Although the MOD has contracted directly with BAE Systems and Rolls Royce for production, hundreds of suppliers across the UK are working on the Dreadnought programme. As the programme moves forward BAE Systems has estimated that 85% of its supply chain will be based in the UK, potentially involving around 850 British companies.
It is unclear, however, how much of the actual value of the overall programme rests with that 85% supply chain in the UK and how much will be spent overseas. To date BAE Systems has contracted for the specialised high strength steel required for the first submarine from a French supplier. The use of foreign steel in the construction of the Dreadnought class has raised many questions over whether more can be done to promote the British steel industry within MOD programmes, and what the implications of Brexit will be for the programme in the longer term.
The cost of the design and manufacture of a class of four submarines has been estimated at £31 billion, including defence inflation over the life of the programme. A £10 billion contingency has also been set aside. Once the new nuclear deterrent comes into service the annual in-service costs are expected to continue at approximately 6% of the defence budget.
In its 2018 Update to Parliament the MOD confirmed that the programme remains within its cost estimate and that £5.5 billion had been spent so far on the concept, assessment and early delivery phases of the project, to date.
£1.2 billion of that total spend was in the 2017/18 Financial Year, including £300 million that was brought forward into the Dreadnought programme in February 2018, from elsewhere in the defence budget, in order to keep the programme on track.
Spending on the Dreadnought programme in 2018/19 is currently forecast at approximately £1.13 billion. However, HM Treasury has also granted the MOD access to £600 million from the Dreadnought contingency fund during this period, again to keep the programme on track and reduce risk.
Additional investment for the programme was also announced as part of the Autumn 2018 budget statement. In December 2018 the MOD confirmed that the programme would receive £400 million from its additional Departmental budget allocation of £1 billion.
This is not extra funding for the programme, however, which the Government has stated is still within its overall £31 billion forecast.
In line with convention, the Dreadnought programme will be funded from the MOD’s core equipment budget. The National Audit Office has, however, raised concerns over the impact of the MOD’s nuclear programmes, including Dreadnought, on the affordability of the Department’s overall equipment plan.
Commons Briefing papers CBP-8010
Author: Claire Mills