Why has BAE decided not to build the Type 31e Frigate on the Clyde?

With the news that BAE don’t intend to assemble the Type 31e Frigate on the Clyde, we ask why things have changed.

The Clyde is working on 5 Offshore Patrol Vessels and is planning to build 8 Type 26 Frigates, compared to an original plan to build 13 Type 26 Frigates at the yards in Glasgow.

As we reported, BAE Systems has announced a partnership with Cammell Laird, who would ‘Prime, build and assemble’ the vessels at their Merseyside facility while the Clyde will focus on the Type 26 Frigates.

If the bid is successful, Cammell Laird would be main contractor with BAE providing design and combat systems.

BAE themselves say that shipbuilding capacity on the Clyde will be full until the mid 2030s while the Ministry of Defence want the first of the new Type 31 Frigates in service by 2023.

BAE say the move will allow them to ‘appropriately support the National Shipbuilding Strategy’ whilst ensuring the delivery of the five Offshore Patrol Vessels and the first three City class Type 26 frigates currently on contract, ‘to time, budget and to the highest quality standards.’

Shipbuilders union GMB earlier accused the Government of reneging on guarantees to build the Type 31 Frigates on the Clyde. While the Clyde will still be working on 13 vessels, 5 of them are Offshore Patrol vessels and 8 are Type 26 Frigates.

Mr Cook of the union GMB told the BBC’s Good Morning Scotland programme earlier in the year:

“These five frigates which Fallon is talking about today were promised to the Clyde as part of the massive cuts. In return, we would have had a state-of-the-art frigate factory to be able to produce the ships at the price that the MoD wished to pay, and we could attract foreign orders.”

Cook also said that there was “no frigate factory, and now no five ships” and that “there has definitely been a reneging – there has been a betrayal on the 13 frigates on the Upper Clyde”.

“Let’s be clear that the Type 31 contracts were originally promised to the Upper Clyde, so while shipbuilding communities across the UK would benefit from a work-share programme of the Type 31 work, this will be at the expense of the Upper Clyde despite its own future already being secured until the 2030s.”

We spoke to a source intimately involved with shipbuilding in Glasgow regarding the practicality of building the Type 31 on the Clyde and he told us:

“I think it’s the obvious answer from an industrial point of view but the question is capacity.

There isn’t any at Govan while T26 is in build.”

Sir Michael Fallon said the first of the new ships are due to be in service by 2023 and shipyards would be encouraged to ensure the vessel was competitive on the global market by working with “global partners”. He said:

“This new approach will lead to more cutting-edge ships for the growing Royal Navy that will be designed to maximise exports and be attractive to navies around the world.”

Nia Griffith MP, Labour’s Shadow Defence Secretary, responding to the publication of the National Shipbuilding Strategy, said:

“I welcome the publication of the National Shipbuilding Strategy and the commitment to the long-term future of our shipbuilding industry. But as well as investing in our naval fleet, we must also invest in the men and women who serve in our Royal Navy.

Despite warnings over many years, our Navy is facing a crisis in recruitment and retention. The Government is on course to miss its own target for the size of the Navy and we simply do not have enough sailors to crew our naval fleet. Experienced personnel are leaving the Navy because of dissatisfaction with pay and conditions. If the Government was serious about properly resourcing our Royal Navy it would lift the public sector pay cap and pay our servicemen and women properly.”

Why has the plan changed?

The MoD is hoping to reduce its reliance on BAE and cut the costs of procurement by spreading shipbuilding across civil and naval yards.

To this end, the government are implementing the results of an independent report into the National Shipbuilding Strategy by Sir John Parker which recommended that the Type 31 Frigate build be spread across the UK, with blocks and components being constructed in yards in both Scotland and England.

The National Shipbuilding Strategy is intended to be a “radical, fundamental re-appraisal of how we undertake the shipbuilding enterprise in the UK, intending to place UK naval shipbuilding on a sustainable long term footing”.

BAE themselves signalled their own reluctance to bid for the Type 31 Frigate as prime contractor due to concerns of a “race to the bottom” on price.

Speaking to The Herald here, BAE managing director Iain Stevenson said:

“We do want to be involved in Type 31. But we have questions. Does it have a budget? What are the timescales. We have not got solid facts. Type 31 could be a race to the bottom.

If it is a front price contract people might bid for it to win and it and it might put them out of business. We would not, because we are BAE Systems.”

In a press release BAE say:

“In response to the Ministry of Defence’s (MOD) evolving requirements as outlined in the National Shipbuilding Strategy, BAE Systems will bring together its warship design and engineering capability and combat systems expertise with Cammell Laird, the commercial shipbuilder, in a Teaming Agreement to bid for the manufacture of the Type 31e, an adaptable general purpose frigate.

BAE Systems is focused on the manufacture and delivery of the two QE Class carriers, the five River Class Offshore Patrol Vessels (OPV) and the first three City class Type 26 warships, as well as continuing to develop and upgrade combat management systems on all Royal Navy ships. Taking account our current and future workload, including Type 26, our shipbuilding capacity on the Clyde will be full until the mid 2030s.”

What does the order book on the Clyde look like?

BAE Systems was recently awarded a contract by the Ministry of Defence worth £3.7bn to manufacture the first three of the eight Type 26 Frigate fleet.

Eight Type 26 Frigates are to be built in total, the contract for the second batch will be negotiated in the early 2020s. Ordering in batches is common for projects of this size around the world and was last seen with the Royal Navy for the Type 45 Destroyers and recent Offshore Patrol Vessels. The Type 45s first batch order was for three vessels for example.

This work will begin after the five Offshore Patrol Vessel order is finished and will last until the mid 2030’s.

Conclusion

Sir John’s aforementioned independent report to inform the recent National Shipbuilding Strategy recommended:

“There is no precedent for building two ‘first of class’ RN frigates in one location in the UK. Type 26 is a critical project for the RN and the Nation. Type 31e is urgently required to maintain RN frigate fleet numbers and to establish a UK exportable light frigate. Against this background risks need to be assessed and evaluated in a responsible way by all stakeholders.

A separate lead shipyard or alliance appears to be the best way forward for Type 31e to minimise overall risk. Regardless of choice, BAES would remain in a position to compete for Type 31e work on combat systems, design support and in block build if capacity is available.”

This recommendation has been met.

In summary, BAE have decided not to bid as prime contractor for the Type 31 and instead have decided to partner with Cammell Laird for reasons outlined above.

The defence giant had already signalled their reluctance to build the vessel and it’s now clear that building them on the Clyde isn’t feasible if they’re to enter service when required, there’s no capacity.

While this has reduced opportunities for the Clyde to build more frigates after the Type 26 production run in 2035, it is good news for UK shipbuilding in general if it goes ahead.