UK warship builder warns it may run out of British work

Babcock has warned that there is currently no UK programme confirmed to follow the Type 31 frigate at its Rosyth facility, raising concerns about the long-term pipeline of work at one of Scotland’s most significant shipbuilding sites, the Scottish Affairs Committee heard on Wednesday.

John Howie, Babcock’s Chief Corporate Affairs Officer, told the committee that the company was actively pursuing export programmes to fill the gap, but said it was wrestling with the decision of whether to take on more apprentices without certainty of long-term domestic work, saying “it is really important for us that we do not bring in early-career workers without the certainty that there is a job at the end of it for them.”

The Type 31 programme, which sees five Inspiration-class frigates built for the Royal Navy at Rosyth, has been a significant source of work for the facility, and the absence of a confirmed successor programme raises questions about how Babcock will sustain the workforce and industrial capacity it has built up, at a time when the government has been stressing the importance of a continuous shipbuilding drumbeat to maintain sovereign capability and skills.

On the follow-on question, Howie was direct about what the industry needed, saying “it is really simple: the need for long-term contracts” and describing it as a matter of policy that it was “never a good thing to take someone on, put them through an apprenticeship but then not offer them a job at the end of it.”

He said that in an ideal world, in partnership with the MoD, Babcock would be recruiting significantly more apprentices than it currently could, but that the Rosyth situation meant that theoretically by the time the fifth Type 31 was finished the demand would tail off, saying “hopefully we will fix that with some export orders” but that as a nation the solution required government and industry working in partnership so that people could be brought in “with the certainty that there will be long-term, secure jobs there for them.” He noted that apprentices cost money in the early years before they were able to contribute, making them an expense as well as an asset, and that this was the area where more needed to be done together between government and industry.

Howie said the company currently received around 3,500 applications for 150 apprenticeships each year, but noted that around 95 per cent of those applications came from within existing travel-to-work areas, with recruitment becoming significantly harder beyond those established industrial heartlands in Fife, Argyll and Bute and the central belt.

He suggested the industry was looking at an apprentice and graduate clearing system that would allow oversubscribed companies like Babcock and BAE to pass high-quality applicants they could not accommodate on to smaller firms that lacked the resources to run their own recruitment campaigns, saying the other applicants were not poor quality, just that there was no space for them.

On the broader skills picture, Howie said ADS was monitoring 10,000 live vacancies across the sector and that Babcock alone would need between 3,500 and 4,000 people in Scotland over the next decade due to normal attrition, with an entire generation approaching retirement. He said the company employed 5,000 people in Scotland with a wage bill of £260 million last year, paying around 50 per cent above the regional average in salary terms in Fife and Argyll and Bute, and supporting around 10,500 jobs in total across the wider supply chain and local economy, but said defence had a perception problem that started in schools, saying “sometimes, ideologically, we teach people that defence is bad and unethical”, making recruitment away from established employment centres particularly challenging.

To address the pipeline, Babcock had launched a programme targeting people not in education, employment or training, bringing 300 people into the Rosyth business through that route with an equivalent programme now rolling out at the submarine base on the Clyde, and a pre-apprenticeship programme in Argyll and Bute targeting schoolchildren aged between 14 and 16, with nearly 92 per cent of those who went through it going on to apply for and secure modern apprenticeships with the company.

Howie was also asked about why the defence industry did not do more to communicate the levels of remuneration on offer, with SNP MP Dave Doogan describing pay in the sector as astonishing and an outlier that nobody knew about. Howie said that because the industry spent government money, it did not like to look like it was “splashing the cash”, and tended to focus instead on the value, complexity and interest levels of the work, though he acknowledged that more needed to be done to communicate what a career in defence actually paid and what it involved in modern terms, saying the industry fundamentally understood that “the skills challenge is ours to fix” and was looking to government to provide a platform that made that task easier rather than harder.

Howie also warned that planned changes to English language requirements for overseas workers, raising the standard to B2, would be “massively damaging for the shipbuilding industry in Scotland”, saying the company currently relied on overseas workers in the short term because there were simply no UK workers available for certain roles, and that the new requirement would mean recruiting welders who had the same level of English as a university lecturer, adding that Babcock was working with the Minister for Migration to try to find a workable solution while acknowledging the government’s policy intent.