The National Shipbuilding Strategy report – a roadmap for a stronger Royal Navy

On 29th November Sir John Parker’s report to inform the UK National Shipbuilding Strategy (NSS) was published. Commissioned by the Treasury, exasperated with decades of continual delays and cost increases to warship construction, the report is concise and written in clear layman’s language. The 34 recommendations are eminently sensible and the report has generated at least temporarily, a warm and fuzzy feeling of consensus and optimism. Both the Defence Secretary and the First Sea Lord have welcomed the findings. The actual NSS, due to be announced by government in Spring 2017, and its implementation will of course, define whether this has been a worthwhile exercise.

Sir John politely points out the greatest reforms are needed at the MoD, although he recognises there are some talented individuals within what must be a difficult workplace. The structural failings in strategy, management, financing and accountability within defence procurement have been apparent to even a casual observer for many years. Before UK warship construction woes can be dealt with, a ruthless restructuring of project management practice in the MoD and navy is required. The report also urges that Civil Service and industry expertise within project teams is retained by long-term planning and a regular ‘drumbeat’ of orders.

“I’m pleased with the report, I share the ambition for the shipbuilding industry… as it says, we need to inject grip and pace into the way we build warships” Admiral Philip Jones, First Sea Lord.

Whitehall reform

The Treasury may take some satisfaction showing MoD failings rather than lack of funds is often the root of problems. It is much less likely to welcome Sir John’s proposal for a transparent 30-year shipbuilding plan. They are also likely to reject a proposal for project finance to be ring-fenced in advance and not subject to the MoD’s annual cash limits. This would require far better forecasting and contingency funding set aside. The RN is also likely to be wary of Sir John recommending they avoid costly mid-programme design changes. Typically an officer appointed to the MoD for a two year involvement in a project that may run for over a decade makes a change to the design, perhaps motivated by a desire to be seen to be making their mark. Sometimes there may be very valid reasons for amending a design late in the program, over 10 years technology and tactics can change dramatically. A balance must be struck between getting the ship to sea on time and budget while avoiding obsolescence. Pointedly Admiral Jones has rejected the suggestion the RN had been “too picky and demanding” in the past.

Unfortunately the Civil Service is not known for its agility and enthusiasm to implement radical internal structural changes. However there are precedents for efficiently delivering large UK naval programmes. The Polaris and Trident submarine projects (and soon the Dreadnought class) have all been managed using non-traditional structures. Oversight from a special projects office, staffed by skilled and incentivised project managers with experience in the commercial world has been successful. This system would need refinements to work more broadly but it does demonstrate when there is enough urgency, commitment and political will, complex naval projects can be completed on time and budget.

Type 31e – pathfinder to a new way of procurement

Sir John is clearly an enthusiast for the Type 31 frigate which he says should be used as a ‘pathfinder’ project to implement the new methods of management and industrial practices. He clearly likes the BMT Venator-110 design and its modular concept that can offer a menu of configurations for the RN and most importantly, export customers. He suggests the frigate project be renamed Type 31e to highlight its purpose in driving exports. Sir John advocates further automation, fuel efficiency, use of off-the-shelf technology and open architecture in combat systems for warships. This approach would certainly reduce initial and through-life costs but may not produce the most capable fighting ship. There is a fine line between a cheap, flexible design that is a great job creation scheme, and a credible warship design that can hold its own against evolving threats in the 2030s and 2040s.

As we predicted, the Type 31 is likely to be block-built using multiple yards around the UK. He considers it too risky for BAES Glasgow to be the lead-yard for both the Type 26 and Type 31 simultaneously. Whether there is sufficient technical expertise available at other UK shipbuilders to co-ordinate and integrate a complex warship project remains to be seen. The potential economic benefits of export success with the Type 31 are so attractive that sir John argues the project should get additional extra funding direct from the Treasury to get it started with some urgency. This is certainly good news for the RN and industry, if the Treasury proves capable of taking the long-term view.

Harnessing the revival in commercial shipbuilding

One of the really encouraging features of the report is the revival of some commercial shipbuilding and repair in the UK. Cammel Laird (Birkenhead), Babcock (Appledore) and Ferguson (Glasgow) have been able to win new-build contracts in open competition and have ‘no single customer dependency culture’ (are you listening BAES?) In contrast to the childish unions, silly demarcation practices and moribund management that helped destroy the industry in the 1970s, these yards have an entrepreneurial spirit with flexible skilled labour methods and the ability to manage fluctuating workloads. With a weak pound there is further opportunity for these yards to really expand and start winning foreign orders again. In addition A&P (Falmouth, Tyne/Tees) Babcock (Devonport & Rosyth) and Harland & Wolff (Belfast) also have much potential that could be harnessed for future naval shipbuilding.

The report recognises the national engineering skills shortage with an average age in the shipbuilding workforce around the mid-40s. More young people must be attracted into the job with more opportunities for training and apprenticeships. The harsh reality is that without a new wave of young engineering talent both the RN and the defence industries face a bleak future.

Sir John is keen to see shipbuilding follow the lead of other successful UK manufacturers by further embracing digital engineering technology and robotics. These techniques deliver spectacular efficiencies when constructing multiple identical units. Larger numbers of warship orders for the RN and for export would therefore make even greater savings. BAES Maritime division receives a polite rebuke from Sir John who says the Type 26 program should be used by the company to considerably improve its efficiency. It must become globally competitive, instead of being subsidised up by the British taxpayer.

The report endorses the establishment of a ‘Centre of naval excellence’ to share best practice and standards across the warship construction industry. It would also act as a single point of contact between government and industry instead of the multiple forums that exist currently. Sir John is also keen that emerging UK commercial shipbuilding capability is used to build RFA vessels. The controversial project to build four RFA tankers abroad looks unlikely to be repeated. The DSME ship yard in South Korea incorrectly installed electrical cabling which has seriously delayed delivery of the first vessel, not helping the cause of those advocating cheaper overseas construction. It seems likely the three solid stores support ships planned for the RFA will be constructed in the UK.

Done in the right way, merchant ship conversions can offer great value for money to the navy. The report is critical of recent reluctance to consider this option. RFA Argus and RFA Diligence are good examples of this practice, both dating back to 1982 and which could be replaced in a similar manner. It would be helpful to see more willingness to adapt merchant ships that could act as force multipliers. As long range, off-board unmanned systems develop there is the another opportunity to use simple merchant conversions as motherships.

Conclusion

Amongst independent observers there is cynicism about whether any of the recommendations of the report will be implemented at all. Most of the issues highlighted have long been known but nothing has been done for years. By commissioning the report, the Treasury has at least created a roadmap to escape the current shipbuilding malaise which will be difficult to ignore. It is now up to government to properly fund, endorse and enforce the recommendations when it formulates and implements the actual shipbuilding strategy next year. Should those in power be bold enough to do so, it would go a long way to reviving the RN and have great benefits to UK industry.

 

Failure to replace the Harpoon anti-ship missile would be inexcusable
Dear Theresa May and Michael Fallon, this is how you should fix the navy... fast