THE UK DEFENCE INDUSTRIAL STRATEGY (DIS)

KOFAC strongly welcomes the 2005 Defence Industrial Strategy (DIS) and the earlier defence industrial policy.  The DIS provides a robust framework for sustaining key skills, tacit knowledge and jobs in the UK naval shipbuilding and submarine industrial base whilst enabling MoD to deliver its required "capability and effect" identified in its 1998 Strategic Defence Review.

DIS is focused on affordable equipment delivery and effective ‘through life support’ of naval vessels including submarines and naval guns.

The DIS will be reviewed in 2007 to reflect the Comprehensive Spending Review's conclusions.KOFAC are seeking to influence the outcome of the Review of DIS.

Click here to discover the ages of the current submarine fleet and when boats are scheduled to come out of service [pdf]

KOFAC firmly believes in sustaining jobs and skills in the UK naval shipbuilding industrial base. 

Lord Drayson recently described a key objective of implementing DIS to be, " to enable the “armed forces to receive the equipment they require, on time, and at best value for money for the taxpayer.”

KOFAC welcomes the DIS proposals for submarines…”that for the foreseeable future UK will retain all those capabilities unique to submarines and their nuclear steam raising plant”…contained in DIS (paragraphs B.2.7, B.2.18 and B.2.26 to B.2.28). 

The proposed Maritime Industrial Strategy should focus on consolidating submarine expertise at the BAE SYSTEMS, Barrow’s Submarine Centre of Excellence  in order to help sustain an affordable submarine industrial base.

DIS (paragraph 2.62) observes “submarine design capability is at risk if long gaps emerge between first of class design efforts” adding International collaboration can help sustain the UK submarine industrial base.  In particular KOFAC welcomes MoD Ministers’ statement in the House of Commons on 14^th December 2005 that “a statement of intent for cooperation and exchange between the USA and UK on submarine concepts, design and construction was signed on 7^th October 2005…(it) records the “intention to work to mutual advantage”…and…”for the construction, equipment production and logistics support to be maximised.  Such work will not compromise the retention of submarine design capability in this country” (UK).⁽⁹⁾

DIS proposes that new nuclear submarines will be ordered to a drumbeat of one every twenty-four months⁽¹¹⁾ (delivery) with HMS ‘Astute’ being scheduled for launch in June 2007 and delivery in August 2008. 

Surface ship drumbeat will be one every twelve to twenty-four months.⁽¹²⁾

KOFAC wants HM Treasury and MoD to ensure funds are made available in the proposed MIS to sustain these drumbeats and the skills needed to maintain them.  

In the recent past there was a 12 year interval between submarine class designs which led to loss of skills and knowledge and increased costs.  KOFAC agrees that it will be necessary for ‘MoD and industry to demonstrate on ability to drive down and control the costs of nuclear submarine programmes’.⁽¹²⁾ 

DIS’s proposal for an 8 year update of a submarine class design will not employ all the core skills required to sustain a submarine design capability in the UK.  KOFAC considers that designers will need to be able to undertake work on warships and submarines.

HM Treasury and MoD are being lobbied to order a batch of Astute class boats.  BAE SYSTEMS has driven ‘Astute’ overhead cost reductions of 31% by 2006. 

Over 60% of the cost of a new boat now lies with procurement through the supply chain rather than through the prime contractor BAE SYSTEMS.  Some key suppliers foresee costs rising.  There is a need for MoD, dti and industry to develop new ‘supplier sustainability solutions’ in order to help achieve the required affordability. 

Considerable ‘ground breaking’ work is being undertaken at Barrow to assist suppliers strive to implement innovative solutions and improvements in the supply chain⁽⁹⁾ in order to help drive down the cost of each new naval platform.  There may be opportunities for dti and Regional Development Agencies to build on this industry initiative to help make the supply chain more efficient.

In order to ensure ‘survivability’ of the nuclear submarine industrial base in the UK,

MIS set out a policy to procure a batch of 3 or 4 nuclear powered submarines of

the ‘Astute’ class ‘at one go’ when the time comes to order ‘Astute’ class boats four

to eight.This will enable the nuclear submarine industrial base of the UK to have

clear visibility of core workload, develop long lead equipment supply options

more affordable than if a single boat is ordered, and allow scope for industry to

offer innovative through life support solutions for equipment supply, and future

in-service capability enhancements.

Sources:   ⁽¹¹⁾ Defence Industrial Strategy 2005, paragraph B.2.56.

                ⁽¹²⁾ Defence Industrial Strategy 2005, paragraph B.2.63.

KOFAC considers MoD should gear up to enable a through life basis for tender to supply systems and equipment for new naval platforms, especially submarines.   KOFAC notes MoD, at a seminar held in Barrow on 6^th September 2005,⁽¹³⁾ suggested ‘through life’ procurement for boat four may be a step too far, although boat four to eight should incorporate potential for it.  Defining with certainty whether through life support should be platform, system or based equipment is going to be a key element of the forthcoming MIS.