UK shipbuilding gets priority status in procurement reform

Shipbuilding has been designated a priority sector for procurement reform under the Procurement Act 2023, in a move the Ministry of Defence says will bring more work to British yards, Defence Minister Luke Pollard has said.

The position was set out in a written answer to the Labour MP for North Durham, Luke Akehurst, who had asked what assessment the department had made of the impact of the Procurement Act 2023 on increasing the volume of MoD-related work for the UK shipbuilding sector. “The Government recognises the importance of a sovereign shipbuilding sector for our national and economic security,” Pollard said.

He said the Cabinet Office had recently announced further policy updates to the Act, with shipbuilding listed among the sectors marked for priority procurement reform on the grounds that it is critical to national security. That designation, Pollard said, “will mean more contract awards at British shipyards, boatyards, and small-to-medium enterprises.”

The National Shipbuilding Office is leading the work for the sector in collaboration with the Cabinet Office, Pollard said, and is developing a new framework intended to deliver more shipbuilding work in the UK. He said the office’s forthcoming Shipbuilding and Maritime Technology Action Plan would “go further than previous strategies in delivering for our powerful sovereign shipbuilding industry” and would set out the government’s approach to supporting the sector.

The Procurement Act 2023 came into force across UK public bodies in February 2025, replacing the previous regime with rules the government has said are intended to give buyers more flexibility and to make it easier to take account of factors beyond lowest price, including social value and national security considerations. Designating particular sectors for priority reform allows the government to steer contracting in areas it regards as strategically important, of which shipbuilding is one.

The National Shipbuilding Office coordinates shipbuilding policy across government and oversees the National Shipbuilding Strategy, which covers naval and civil vessels and seeks to sustain a domestic industrial base capable of building for both the Royal Navy and commercial customers. British naval shipbuilding is concentrated at a small number of yards, among them BAE Systems on the Clyde and Babcock at Rosyth, with a wider supply chain of smaller boatbuilders and equipment firms that the reforms are intended to reach.

The talk about bringing more work to small and medium-sized enterprises echoes a theme the government has pressed across defence procurement more broadly, with ministers arguing that directing a greater share of spending to smaller firms supports jobs and skills and strengthens the resilience of the supply chain.