LONDON – Naval shipbuilding has turned out to be among the winners in a reshaping of the British defense industrial strategy rolled out by the government here on March 23.

A reset of the national shipbuilding strategy, widening the criteria for ships that have to be built locally and publication of a pipeline of upcoming warship design and build opportunities were among the initiatives aimed at improving the prospects of the local maritime industry here.

The potentially improving prospects for an industry that includes shipbuilders like BAE Systems, Babcock, Cammell Laird and others comes against a background of a major transformation of the defense sector here.

The British have spent the last few days announcing shake-ups of defense, security and foreign policy and resetting the size and shape of its military capabilities as part of what is known as the integrated review.

The review announced two Type 23 frigates would be coming out of service early and a few minor warships would eventually be axed, but generally the Royal Navy appears to have emerged from the capabilities cuts as well as could be expected.

Better still, the unexpected emergence late last year of a requirement for up to five of a new class of frigates known as the Type 32 could see Royal Navy surface combatant numbers rise beyond 20.

On Tuesday, Jeremy Quin unveiled a new defense industrial strategy which among other things looks to boost domestic suppliers by changing competition policy in favor of local production.

In shipbuilding the MoD has though left the door open to foreign participation. “We will sustainably grow the capacity and capability of the U.K. shipbuilding enterprise, potentially drawing on the expertise of international partners where appropriate,“ the industrial strategy document said.

The nuclear, crypto and cyber industrial sectors were the only ones that the government said were of strategic importance and had to be undertaken locally, but shipbuilding was among a list of capabilities labelled as being important to maintain onshore.

The government says that’s for national security reasons, but it’s political too. Shipbuilding generates jobs and skills in parts of Britain where industrial regeneration is a priority for the government.

Whatever the reason, shipbuilding is in a better place than it was a few years ago, although questions still remain over issues like long-term maritime workload in the wake of the successful completion of the £6.4 billion ($8.8 billion) program building two large aircraft carriers for the Royal Navy.

The MoD, along with other government agencies, has sought to change the narrative on a shipbuilding decline with Defense Secretary Ben Wallace being appointed shipbuilding tsar by Prime Minister Boris Johnson and tasked with regenerating the naval and commercial maritime sectors.

A redrawing of the 2017 national shipbuilding strategy, which focused on naval shipbuilding, is already underway. This time around the strategy will also look at commercial opportunities.

"The government will publish an update to its 2017 strategy, which will set out how the government intends to create the conditions for success for all parts of the enterprise, from shipyards building warships, to those building offshore wind vessels and the companies providing the systems and components which are so critical to our maritime capabilities,“ said the document.

The government said that it will double the size of the MoD’s investment in the sector over the life of this parliament to £1.7 billion ($2.3 billion) a year.

It’s part of a drive to meet the governments stated goal of again becoming the "foremost naval power in Europe.“

The Royal Navy is already set to buy eight Type 26 anti-submarine frigates from BAE Clyde shipyards and five Type 31 frigates from Babcock at nearby Rosyth.

The next step is to order three large Fleet Solid Support (FFS) ships to provide logistics for the Royal Navy’s new 65,000 tonne aircraft carriers.

BAE is also building Dreadnought-class Trident missile submarines and Astute-class nuclear attack boats at its yard in Barrow, northwest England.

The much-delayed competition to build the FFS vessels is expected to get underway in the next few weeks, with local yards aligning with foreign partners to build the ships.

As it stands the naval pipeline will also include:

  • A Multi-Role Ocean Surveillance Ship to protect underwater critical national infrastructure and improving Royal Navy ability to detect threats from Russian submarines in the North Atlantic;
  • Up to five Type 32 frigates designed to protect territorial waters, provide persistent presence and support littoral response groups;
  • Up to six Multi-Role Support Ships to provide the platforms to deliver littoral strike, including maritime special operations, in the early 2030s; and
  • A new class of destroyer, known as the Type 83, which will begin to replace Type 45 destroyers in the late 2030s.

"The demand signal we send through this pipeline has the potential to drive sustainable growth throughout the U.K.‘s shipbuilding supply chain, protecting highly skilled jobs across the U.K. As part of our strategy refresh, we intend to develop a continuous shipbuilding pipeline and publish a 30-year plan for naval and other government-owned vessels,“ said the industrial strategy document.

John Louth, an independent defense analyst here, said shipbuilding appeared to be a winner from the strategy reset.

"But much of it could still potentially be delivered through international collaboration. There is a pipeline emerging for surface and sub-surface assets, perhaps utilizing emerging technologies, that does offer the sense that the maritime sector could become a good place to invest,“ said Louth.

For some time now British maritime procurement has required ships like destroyers and frigates to be built locally while allowing Royal Fleet Auxiliaries to be sourced from overseas.

That’s also changing, although by how much is not yet clear as how programs will be competed for in future will be considered on a case-by-case basis.

The strategy document says that future warships and auxiliaries will be considered part of the same broad maritime defense capability for national security reasons.

But it goes on to say: "The procurement approach for each class will be determined on a case-by-case basis. As well as considering the specific capability requirements, we will consider the long-term industrial impact of different options, including delivering value for money for our overall program and maintaining the key industrial capabilities required for operational independence.“

"These considerations will determine whether the optimum approach would be a single-source procurement, a U.K. competition, an international competition or a blended competitive approach,“ the document adds.

Changes in the maritime sector were among a raft of procurement policy modifications announced by Quin to Parliament.

The defense-procurement minister said MoD would be modifying its „competition by default“ procurement policy, reviewing its single-sourcing financial oversight arrangements and reiterating British policy of looking to collaborate with oversea partners in weapons programs.

Louth said many of the “themes the government strategy is talking about with regard to issues like international collaboration and a move away from competition by default has actually been happening for a while. It’s difficult to argue with them,“ he said.