A Westminster Hall debate on ‘The National Shipbuilding Strategy’ has been scheduled for Thursday 11 July 2019 from 1:30-4:30pm. This Backbench Business debate will be led by Kevan Jones MP.Jump to full report >>
The debate will discuss the progress of plans to purchase two new ships for the Royal Navy and Royal Fleet Auxiliary: the Type 31e frigate and the Fleet Solid Support Ships (FSS). In November 2018 the MOD said it expects to place the contract for the Type 31e in 2019 and the FSS in 2020.
The Government published a National Shipbuilding Strategy in September 2017, fulfilling a commitment made in the 2015 Strategic Defence and Security Review.
The Strategy completely overhauls how the Royal Navy will procure and build its new fleet of general purpose frigates. The Government has already committed to a fleet of eight Type 26 frigates, the first of which will enter service in the mid-2020s. The Shipbuilding Strategy focuses more on the five cheaper frigates, the Type 31e.
The Government remains committed to building Navy warships in the UK but the design and build will be open to competition rather than via a non-competitive single source contract with BAE Systems. Exportability will be built into the new Type 31e frigate fleet to counter the Navy's poor record in exporting new ships. Lastly the strategy sets out an aggressive timetable with the main contract to be placed in early 2019 and an in-service date of 2023 for the first in class for the Type 31e. The competition was reportedly suspended in July and restarted in August 2018
In December 2018 in the MOD awarded three Competitive Design Phase contracts to consortia led by BAE Systems, Babcock and Atlas Elektronik UK, with a view to placing the Design and Build contract by the end of 2019. The MOD confirmed plans for a firm price contract of £1.25bn for all five ships, the first to be delivered in 2023 and all five delivered by the end of 2028.
The Government also intends to buy at least two new Fleet Solid Support Ships. These are for the Royal Fleet Auxiliary to supply ships at sea with food, ammunition and spares.
The Government is competing the contract internationally. Labour, the SNP and the shipbuilding trade unions argue the contract should be restricted to UK shipyards to support the shipbuilding industry, secure jobs and retain skills. They argue the proposed ships are ‘warships’ and as such, the Government can use the Article 346 exemption to exclude the contract from EU procurement rules on national security grounds. The Government disagrees, defining warships as ‘destroyers, frigates and aircraft carriers’, and says all other surface vessels should be subject to open competition.
In November 2018 the Ministry of Defence announced five firms had been shortlisted to submit a tender for the competition. These were a Team UK consortia involving Babcock, BAE Systems, Cammell Laird and Rolls-Royce; Fincantieri (Italy); Navantia (Spain); Japan Marine United Corporation and Daewoo Shipbuilding and Marine Engineering (South Korea). However, the Financial Times reported in May 2019 that Fincantieri and DSME have withdrawn. The Defence Committee took evidence from trade unions and MOD Ministers and officials on the FSS for its enquiry into procurement.
Related Library briefing papers:
National Shipbuilding Strategy, Ministry of Defence, 6 September 2017
Commons Debate packs CDP-2019-0186
Authors: Nigel Walker; Louisa Brooke-Holland