Ministers ‘blindsided’ by offshore award of naval tug fleet

Concerns about the decision to place the Defence Maritime Services replacement fleet with Damen have now been sharpened by new ministerial answers confirming that British shipyards were not even invited to bid for the work.

The issue surfaced at industry discussions at Holyrood and also in written responses at Westminster, and together they paint a picture of a procurement system that allows major small vessel orders to pass offshore with limited scrutiny and little strategic intent.

At the Scottish Parliament’s Cross Party Group on Maritime and Shipbuilding, participants questioned how a 24 vessel programme ended up in the hands of a Dutch yard currently under investigation for alleged sanctions breaches involving Russia. Those present argued that the boats are central to daily operations at Clyde, Devonport and Portsmouth and fall squarely within the capabilities of several UK builders. They also warned that outsourcing through private service providers has become a route through which industrial opportunities quietly disappear.

Paul Sweeney MSP, convenor of the Cross Party Group, said ministers had been taken by surprise by the outcome of the process. “I think it’s fair to say that UK Government ministers were blindsided by the decision by Serco to award the 24 vessel contract for workboats to Damen,” he said, referring to the Defence Maritime Services Next Generation vessel replacement programme covering the three main naval bases at Clyde, Devonport and Portsmouth.

Sweeney argued that the decision ran directly counter to the National Shipbuilding Strategy. “It’s clear that the goal of the National Shipbuilding Strategy is to maximise the cross government shipbuilding pipeline over the next 30 years and convert that into a UK demand signal for shipbuilding. This militates against it,” he said. He added that the vessels involved, including tugs, crane barges and pilot boats, were exactly the type of ships that UK yards are well placed to deliver. “These are vessels that would be well suited to UK yards,” he said.

He also raised concerns about the ongoing criminal investigations involving Damen. “The other consideration is the ongoing investigation into the directors of Damen and alleged breaches of sanctions against Russia, particularly through their yards in Romania, and the potential risk there,” Sweeney said. He described the situation as serious and damaging. “With the trial underway and further investigations relating to bribery, forgery and money laundering, it’s really reputationally problematic for this contract to continue,” he added.

While acknowledging that ministers are now engaging with Serco, Sweeney argued that more decisive action was required. “I would like to see this work brought into the UK under a subcontract, or the contract essentially pulled and re awarded to a UK shipbuilder,” he said.

Sweeney pointed to the immediate pressures facing Ferguson Marine as an example of why intervention matters. “There is an imminent risk to Ferguson Marine,” he said, warning that even if a direct award for a new ferry is made later this year, the yard still faces a significant gap in workload once Glen Rosa is delivered. “There are huge risks with people leaving the shipyard due to lack of orders and uncertainty. People are already leaving as we speak,” he said. He noted that mobilisation on a further ferry would not begin in earnest until late next year, leaving a prolonged period of underutilisation.

He argued that construction of workboats for the DMS programme could provide timely infill work. “I think it could be perfect infill work to do these Damen tugs under subcontract at Ferguson Marine in Port Glasgow,” he said, pointing to existing precedents for workshare arrangements involving Damen on other UK projects. “We should really press hard on a deal for workshare for Ferguson’s. Getting tug boats constructed there would be a perfect short term solution,” he added.

The written answers from defence minister Lord Coaker set out the official position. He explained that “the Defence Marine Services Next Generation programme did not seek tenders directly for the Vessel Replacement Programme” because the shipbuilding element was embedded within a wider In Port Services contract. Bidders were therefore free to select their own suppliers. Coaker confirmed that “there was no policy requirement to engage for this procurement” and that the Ministry of Defence has no record of discussions with the Confederation of Shipbuilding and Engineering Unions. Only one compliant bid was received for the overall services contract, leaving Serco to select Damen without direct government involvement.

Coaker also addressed the legal and financial issues. He said the MoD is aware of the Dutch proceedings and “will take appropriate action should a conviction occur.” He stated that Serco had assessed Damen and found “no immediate risk to delivery of the Vessel Replacement Programme,” while confirming that monitoring will continue. The minister emphasised that the MoD holds no direct contract with Damen. The subcontract is valued at around two hundred million pounds, roughly twenty two percent of the overall In Port Services package. Coaker argued that British yards would still benefit from around two hundred million pounds of maintenance work, though this has done little to reassure those concerned about the loss of higher value newbuild activity.

The discussion at Holyrood stressed that a fleet of this size could have provided several years of steady output for UK yards and helped sustain skills between major naval programmes. Comparisons were drawn with countries that deliberately use small vessel orders to stabilise their shipbuilding sectors. The procurement structure, rather than an explicit political decision, created the conditions for the work to go overseas. Once shipbuilding is embedded inside service contracts, ministers lose the ability to apply industrial priorities even when these align with stated policy objectives.