Defence industry representatives have warned MPs that fragmented procurement decisions and short-term ordering practices are damaging UK shipbuilding, limiting productivity gains and weakening the wider industrial supply chain.
Giving evidence to the Scottish Affairs Committee, Andrew Kinniburgh, Director-General of Make UK Defence, said that the lack of predictable, long-term orders was discouraging investment and forcing inefficient working practices across defence manufacturing.
“If you’re a highly rated nuclear welder, you’re seven or eight years before your time is served and you’ve got all your certificates,” Kinniburgh said. “You can then make a great deal of money, but you’re straight into a global scrap for talent. Civil nuclear is hoovering up a lot of really good people from the defence industry.”
He warned that prime contractors were increasingly recruiting skilled workers from SMEs within their own supply chains, hollowing out smaller firms. “They’re actually recruiting out of the businesses that they’re using as suppliers themselves,” he said. “So it’s a tricky one, really tricky.”
Pressed by MPs on the impact of procurement decisions, Kinniburgh criticised recent moves to manufacture Royal Navy tugs, barges and pontoons outside the UK. “It’s an absolutely huge disappointment,” he said. “It’s lazy thinking. There should be a buy UK policy.”
While acknowledging that not all defence equipment could realistically be built domestically, he argued that smaller vessels were an obvious exception. “We’re never going to make everything in the UK,” he said, “but building small ships elsewhere is a disgrace, frankly.”
Warrick Malcolm, Director of ADS Scotland, said reform of defence procurement was essential to relieve pressure on SMEs, particularly those operating in rural areas. “There are certainly things that we could do that would alleviate some of the pressures on both SMEs and rural SMEs,” he said.
MPs also questioned whether industry had sufficient visibility of future orders to plan workforce development. Malcolm said that for many smaller firms, the lack of long-term certainty was acute. “You don’t really have ownership of your future,” he said. “You’re making decisions almost week by week, month by month.”
Kinniburgh illustrated the problem by pointing to submarine and warship programmes where contracts are issued in single units rather than larger batches. “You get an order for one boat, you make whatever you’re making for one boat, then you get another order a year later,” he said. “What that means is you get very small, incremental improvements in productivity because you simply can’t invest.”
He said larger, multi-ship orders would allow firms across the supply chain to invest in automation, machinery and skills. “If you had an order for five ships or ten boats, SMEs could invest in robotics, productivity improvements, or new machinery,” he said. “Because everything is incremental, the improvements are incremental too. It drives all the wrong behaviours.”
While acknowledging that international programmes such as AUKUS inevitably add complexity, Kinniburgh said the fundamental issue remained procurement structure rather than partnership. “It does add complexity,” he said, “but it should also add strength that outweighs that complexity.”
Question is, Do we want to be a Manufacturing superpower again ? It’s the amount of work in the pipeline that drives the training of the trades, just like It is In every other line of business. The more work, the more employment and specialist training.
Just looking at Hincley the other night, It’s a massive site busy as hell 24/7 so I can only Imagine how many skilled people are lured there for the money and secure employment.
This National Shipbuilding Plan needs stability and orders, long term.
like A field of dreams quote says,
“Build It and they will come”
This is more why the much delayed DIP is a national disgrace.
There needs to be a long term ramp up in orders to drive skills increases.
Suddenly turning the ordering taps on full blast would just mean costs rocket.
There must be some horrific arguments going on given the £28,000,000,000 black hole and the promised GDP % Up lift seeings as It’s being kicked down the road to a distant date ?
It Is my understanding that all the points raised in the SDR were agreed and that action would be taken accordingly.
Yet here we are still. Nothing, Zilch, only empty words and vacant looks from a Primeminister that acts like a Wet Flannel.
No great surprise here. Any business needs to have a framework within which current and future orders are planned for. We haven’t had any cohesive ordering for two years now and with DIP (aptly named) delayed again how are our shipbuilders supposed to function.