The Type 26 Frigate contract will not be signed until it offers “value for money”, Defence Secretary Michael Fallon has said.
MPs heard claims the project to build eight Type 26 frigates and “at least” five Type 31 frigates on the Clyde had been delayed due to the Ministry of Defence’s attempts to save money.
Manufacturing of the Type 26s was initially expected to start in 2016, confirmation of when the work will begin has still to be announced.
SNP MP Douglas Chapman asked Mr Fallon:
“The Type 26 frigates are well behind schedule. It’s been said the Navy had ‘run out of money’ to progress these contracts. Given the perilous state of the economy as of last Friday morning, can you give us assurances that we can please, please, please run out of money for Trident as well?”
Mr Fallon replied:
“Let me just say to you that the schedule for Type 26 has not yet been set. These are ships likely to cost between half a billion and £1bn each, and I am not going to sign a contract for these ships until I am satisfied that they represent good value for our navy and good value for the taxpayer.”
It has been reported that the MoD has rejected BAE’s offer to reduce the cost of the Type 26 programme by £275 million and promise to start work on time.
The Sun and other sources recently claimed that the Ministry of Defence has “gone back” on a £11.5 billion deal for its fleet of new Type 26 warships “in order to save £225 million on the deal with BAE Systems”.
Leaked emails reportedly reveal that BAE offered to reduce the cost of the programme by £275 million and promised to start work on time.
A Government spokesperson said:
“The UK Government is committed to building ships on the Clyde and to the Type 26 programme. Over the next decade, we will spend around £8 billion on Royal Navy warships and, because Scotland voted to remain part of the UK in 2014, the Clyde will continue to be an important manufacturing base for them.”
Peter Roberts, Senior Research Fellow for Sea Power and Maritime Studies at RUSI has said that slippage in the Type 26 programme may lead to extra ships being built on the Clyde in order to retain jobs at the yards on the river.
“What it’s going to mean for the Clyde is very significant and I think we couldn’t get a national shipbuilding strategy at a more important time and it might well be that we see further OPV’s being turned out on the Clyde”
He also suggested that the Type 31 light frigate could enter build before the Type 26.
Referring to the commitment of the government to the Clyde, he said:
“There is going to be a commitment, we see that from the government, of continued shipbuilding orders.”
According to reports in the media a few months ago, union representatives were told by BAE Systems that a “worst-case scenario” of 800 redundancies was possible if the UK government pulled back from its commitment to the manufacture of frigates on the Clyde.
The defence minister has said the UK government remains “absolutely committed” to building Royal Navy frigates on the Clyde. Philip Dunne told the House of Commons “nothing had changed” since the plans were announced last November in a defence spending review.
While it’s uncertain exactly when the ships will enter build, it is certain that all of the frigates will be built on the Clyde.