The renaissance of naval shipbuilding in Scotland

Scotland stands poised on the precipice of a new golden era for its naval shipbuilding industry.

Scotland’s naval shipbuilding industry is witnessing a renaissance, a boom that promises consistent growth well into the 2040s.

Shipyard workers in the heart of Glasgow, Rosyth and Port Glasgow are busier than they have been in decades, fabricating steel and constructing some of the Royal Navy’s most advanced warships.

A sector once marred by periods of ‘feast and famine’ is now witnessing a resurgence, with its shipyards humming with activity and its workforce expanding.

An Industry Reawakened: Glasgow and Rosyth Shipyards

Paul Sweeney MSP, convener of the Cross Party Group on Maritime and Shipbuilding, offers a unique perspective, having witnessed the sector’s challenges and successes both as a former shipyard worker and a policy advocate. He recently highlighted the industry’s accomplishments and the distance yet to go:

“The level of capital investment in Scotland’s shipyards is at the greatest level since the 1960s, when the industry underwent massive restructuring in the face of overwhelming global competition. Today the two major UK naval shipbuilding programmes, Type 26 and Type 31, have underpinned the development of the New Assembly Hall at BAE Systems’ Govan Shipyard and Venturer Building at Babcock’s Rosyth Dockyard respectively.

Both projects are vital to getting these sites into the upper quartile of shipyard facilities globally, as integrated undercover ship assembly realises significant productivity and quality improvements, especially in Scotland’s often unpalatable climate that can cause huge risk to lost working days on shipbuild programmes.

As the Convener of the Cross Party Group (CPG) on Maritime & Shipbuilding at the Scottish Parliament, we recently published a report along with the UK Parliament’s All-Party Parliamentary Group (APPG) on Shipbuilding & Ship Repair, emphasising the need to invest further in shipyard infrastructure improvements that go beyond naval programmes, in order to allow the UK and Scotland to recapture a share of the commercial shipbuilding market, especially with the huge opportunity presented by ScotWind. We must get serious about an integrated plan for commercially competitive shipbuilding in Scotland that will unleash our export potential and generate thousands of skilled jobs and drive economic growth.”

The Pipeline of Production

Between 2015 and 2035, Scottish shipyards are expected to construct 24 warships, with several already built and some in service.

A glance at the current and projected shipbuilding schedule makes it clear why the word ‘booming’ is apt.

Glasgow: This city remains at the heart of the Type 26 construction, churning out frigates from two distinct batches. The first batch boasts HMS Glasgow, HMS Cardiff, and HMS Belfast, all slated for launches within the 2020s. Meanwhile, the subsequent batch of Type 26 frigates will grace the seas with HMS Birmingham, HMS Sheffield, and HMS Newcastle, followed by HMS Edinburgh and HMS London in the subsequent decade.

Rosyth: The shipyard here is a hive of activity. Not only is it home to the construction of the Type 31 Frigates, with launches of HMS Venturer, HMS Bulldog, HMS Campbeltown, HMS Formidable, and HMS Active expected in the 2020s, but it’s also buzzing with rumours. Given recent whispers, Rosyth is the most likely bet for the Type 32 Frigates, with many speculating that Type 32 may emerge as a ‘batch two’ Type 31 frigate.

Port Glasgow: Manufacturing is now underway at Ferguson Marine in Port Glasgow, on the first of three units to be built for HMS Belfast, the third City Class Type 26 frigate currently being constructed by BAE Systems, in what the firm calls “a new dawn” for the Port Glasgow shipyard. This phase of work involves fabricating three steel units. When ready later this year, the modules will be transported to BAE Systems’ Govan shipyard ready for assembly as part of HMS Belfast, the third frigate in a series of eight warships that BAE Systems is building for the Ministry of Defence.

Dave Doogan MP, SNP Defence Spokesman, offers a noteworthy viewpoint on Fergusons, highlighting that the yard is building skills and acting as an enabler for shipbuilding around Scotland.

“BAE capitalising on the skills and capacity at Ferguson’s is much to be welcomed and is a smart move. It is also a credit to Fergusons that they have successfully won this work in what is a highly competitive sector and a welcome recognition of the skills present in the yard. It is critical for BAE to maintain the build rates on 26 and improve on these as the build process matures. I am delighted that Fergusons exists today to support this endeavour and look forward to more commercial work being won by the yard.”

Innovations in Production: The Rise of ‘Frigate Factories’

For the first time in many years, multiple shipyards across Scotland are engaged simultaneously in building Royal Navy vessels.

HMS Active’s inaugural blocks have taken their place beside HMS Venturer at Rosyth’s state-of-the-art ‘frigate factory’, illuminating the sheer potential and scale of naval production in Scotland.

The first blocks of HMS Active, the second Type 31 Frigate, have been laid out beside HMS Venturer at the Rosyth 'frigate factory', showcasing the scale and potential of one of two planned frigate fabrication facilities in Scotland.https://t.co/uHGXM9IOGT

— UK Defence Journal (@UKDefJournal) August 24, 2023

These ‘frigate factories’, a revolutionary concept, are large covered build halls capable of constructing two frigates concurrently under their roofs. While one such marvel stands complete in Rosyth, Glasgow is not far behind, with its factory soon to grace the skyline.

At present, full ships longer than 75 metres cannot be constructed undercover at Govan, something of a major constraint. In this photo of a model of the facility I snapped at the yard, you can see that two vessels can be built indoors side by side, in the new facility. pic.twitter.com/hzvnmhvUlq

— George Allison (@geoallison) August 24, 2023

Recommendations from the Scottish Affairs Committee

Based on recommendations from the Scottish Affairs Committee’s ‘Defence in Scotland: military shipbuilding’ report, several pathways have emerged that could further fortify the burgeoning Scottish naval shipbuilding sector.

Firstly, there’s an evident need to strengthen collaboration between the Ministry of Defence (MOD) and Small to Medium-sized Enterprises (SMEs) in Scotland. The committee has identified certain barriers that SMEs face when attempting to work with the MOD. By promoting innovation and fostering better collaborations, shipyard clusters around Scotland can be bolstered. This initiative will not only support the economic ecosystem around shipyards but also invigorate the broader defence industry.

Transparency is another area highlighted for enhancement. The MOD’s procurement spending with SMEs, especially the proportion dedicated to Scottish SMEs, needs to be clear and accessible. This openness would not only build trust but also encourage more SMEs to engage with the naval shipbuilding sector.

The concept of ‘social value’ in shipbuilding contracts is another promising avenue. By incorporating socio-economic benefits into shipbuilding contracts, wider communities stand to gain. However, measuring and tracking these benefits effectively is paramount, and the Scottish Government can play an instrumental role in this, ensuring that contractors meet their obligations and that the local communities see the benefits they’re promised.

Furthermore, a better understanding of the shipbuilding supply chains is essential. The committee observed that, historically, the MOD’s grasp of these chains had been less than ideal, though improvements have been noted recently. By publishing data on the shipbuilding supply chain, a clearer picture can be painted for industry stakeholders and policymakers alike.

Lastly, an industry as advanced as naval shipbuilding requires a keen understanding of the evolving skills profile of its workforce. Continuous research and collaboration between the MOD and the Scottish Government can ensure that the shipbuilding sector’s needs are anticipated and addressed effectively.

In summary, while the Scottish naval shipbuilding sector is poised for growth, embracing these recommendations could provide the strategic edge required for it to thrive in the decades to come.

Navigating Troubled Waters: A Skills Crisis in Scotland’s Shipbuilding Sector

As Scotland’s shipbuilding industry enjoys a period of resurgence, the aforementioned report from the House of Commons’ Scottish Affairs Committee sounds a cautionary note that could have far-reaching implications. Though the sector is celebrated for its specialised workforce and cutting-edge engineering capabilities, the report exposes a looming crisis that is impossible to overlook.

The committee states, “shipbuilding is an industry that requires a highly trained and specialised workforce,” and that “much of the UK’s knowledge and expertise in this area is based in Scotland.” This expertise is fortified by elite training institutions such as the City of Glasgow College, Fife College, and the University of Strathclyde, which serve as talent pipelines for industry behemoths like BAE and Babcock.

However, the Confederation of Shipbuilding and Engineering Unions issues a dire warning that “workforce recruitment, skills and retention were ‘the biggest challenge for the industry and the enterprise collectively’.” This sentiment is echoed by the City of Glasgow College, which agrees that “Scottish shipbuilding cannot succeed without addressing chronic shortages in labour and skills.”

One of the most pressing concerns outlined in the report is the industry’s struggle with demographic shifts and an ageing workforce. The challenge, the report notes, “did not lie so much in recruiting younger people and apprentices, but in recruiting and retaining more experienced personnel.” John Howie of Babcock adds that “there are inherent inefficiencies in ordering a batch of ships and then not ordering anything for four, five or six years. It is hard to retain workforces.”

Further, the report identifies the need for continual reskilling of the existing workforce, especially in light of rapid technological advancements. As Professor John Louth reveals, “around 80 per cent of individuals who leave the defence sector before the normal retirement date do not return to the sector.”

In essence, the Scottish shipbuilding sector is steering into a multifaceted skills crisis that requires immediate and comprehensive intervention. The issue isn’t merely one of recruitment; it encompasses retention, retraining, and long-term strategic planning.

The Committee urges the Ministry of Defence and the Scottish Government to develop and regularly update their understanding of the skills profile needed in the shipbuilding sector, ensuring both the government and industry can aptly plan for the future. As the industry’s success hinges on its skilled workforce, tackling these challenges isn’t just advisable; it’s imperative.

Maritime UK’s Vision: Integrated Approach for Prosperity

The recommendations of Maritime UK, the umbrella body for the maritime sector, bringing together the shipping, ports, services, engineering and leisure marine industries, further illuminate the path forward, emphasising the need for an integrated approach:

1. Maximising Opportunities: The National Shipbuilding Office (NSO) should collaborate with UK and devolved governments to ensure that the delivery of vessels within the cross-government pipeline offers economic benefits across the country.
2. Procurement Policies: A recognition of the strategic importance of the UK shipbuilding enterprise and its contribution to UK prosperity.
3. Social Value & UK Content: There’s a call for greater ambition in leveraging social value in line with the practices of competitor nations.
4. Investment in Innovation: Greater investments in R&D, green infrastructure, and incentives are essential.
5. Collaboration with Offshore Renewable Energy Sector: ScotWind presents an opportunity to collaborate with developers for a range of vessels, with NSO brokering these.
6. Decarbonisation Projects: The competitiveness gap needs to be addressed, with funding drawn from recommendations of the UK Marine Decarbonisation Report.
7. Financial Cornerstone for Commercial Shipbuilding: A timeline for implementing the Home Shipbuilding Credit Guarantee Scheme (HSCGS) and exploring options with the Scottish National Investment Bank (SNIB).
8. Engagement with UK Shipbuilding Skills Taskforce: A prompt response to the task force’s final report is expected before the end of 2023.

Embracing the Golden Era Ahead

In summarising the current landscape, Scotland’s shipbuilding industry has undeniably experienced a resurgence, thanks in part to successful export contracts such as the Type 26 and Type 31 frigates.

However, as Paul and Dave have highlighted, the sector is not without its challenges, including increased international competition and a lack of transparency in procurement strategies. This duality of success and uncertainty creates a complex roadmap for the future.

Opportunities:

1. Export Success: The track record of exporting Type 26 and Type 31 design licences holds promise for expanding Scotland’s shipbuilding portfolio.
2. National Shipbuilding Office: Situated in Edinburgh, this office offers a platform for strategic dialogue among industry stakeholders, making it an essential asset for future planning.
3. Local Talent and Skills: With the UK Shipbuilding Skills Taskforce focusing on long-term workforce development, Scotland has the chance to cultivate a highly specialised labour force, thereby enhancing its competitiveness.

Challenges:

1. Procurement Strategy: Opening up procurement to international bids adds a new layer of competition, raising the stakes for Scottish shipyards.
2. Transparency and Analysis: The government’s procurement decisions often lack clarity, particularly concerning considerations like local economic impact, which could disadvantage domestic bidders.
3. Pipeline Uncertainty: The absence of a robust, long-term plan for naval projects leaves the Scottish shipbuilding sector in a state of planning ambiguity.
4. SME Engagement: While offering the potential for innovation and economic stimulation, Scottish SMEs face obstacles in integrating with larger defence procurement processes.

Recommendations:

1. Holistic Evaluation of Bids: A comprehensive, transparent framework for evaluating the long-term economic impacts of bids could level the playing field for Scottish yards.
2. Pipeline Clarity: A firm, long-term commitment to naval projects can significantly aid in strategic planning and future investment.
3. Support for SMEs: Targeted support for local SMEs in the supply chain would likely yield innovation and economic benefits.
4. Skills Investment: A collaborative approach between the UK and Scottish Governments for skill development could prove advantageous for the sector.
5. Regular Reviews: Periodic assessments should ensure that institutions like the National Shipbuilding Office are fulfilling their roles effectively.
6. Cross-Jurisdictional Collaboration: Coordinated policy across different jurisdictions within the UK can be a cornerstone for a coherent and effective skills development strategy.

By carefully navigating these challenges and capitalising on the existing opportunities, Scotland’s shipbuilding industry could continue to make significant contributions to both local and national economies while securing its long-term viability.