LONDONondon —- One of Britain’s senior industrialists has been put in charge of a Ggovernment drive to deliver a national shipbuilding strategy for the naval sector here.
Sir John Parker's appointment as the chairman of the National Shipbuilding Strategy was part of the UK Treasury's budget day announcements on Mar 16.
A Treasury-led effort to develop a surface warship building strategy has been underway since at least January, 2015, when the initiative was announced by the Chancellor of the Exchequer, George Osborne, during a visit to the Portsmouth naval base on England’s south coast.
The businessman’s credentials include stints as chairman of Babcock International and BVT Surface Fleet. He is currently chairman of mining giant Anglo American. He’s a naval architect, a non-executive director of the Airbus Group and a former president of the Royal Academy of Engineering.
One industry executive said he understood Parker’s name wasn’t the first one out of the hat when it came to selecting an independent chairman for the role as other people had previously turned down the role down.
But, they said, he was probably the best person the Ggovernment could have found to do the job.
"He’s very shrewd, trusted by Ggovernment and seen as impartial. He’s an elder statesman and iI would struggle to find someone better," said a second industry executive.
That view was endorsed by another leading executive, who said,. "Sir John is a superb choice - someone who knows the industry and has seen it from the 1980's when we were building warships in many yards across the country, right up to the present day and the merger of BAE Systems with Vosper Thornycroft. He will know how to ask the right questions and develop a path that will benefit all the industry and its suppliers."
A Defence Ministry of Defence spokeswoman said Parker will report on the strategy to Ggovernment ministers by the Autumn Statement 2016.
No date has been announced for the Cchancellor’s Autumn Statement.; if it’s any guide Osborne has previously delivered his financial update to Parliament in late November or early December.
"His report will include recommendations on the management and governance arrangements for implementing the strategy in the longer term, including arrangements for any external oversight," she said.
"He will lead the high level engagement with key senior defencse, government departments and industry stakeholders. He will provide strategic direction and guidance to a cross Whitehall teams and report to Mministers," said the spokeswomen.
The strategy will cover "all aspects of warship building and integration as well as the contribution that all suppliers make," she said.
BAE Systems and Babcock International are Britain’s two major shipbuilders and naval support providers but other companies like Cammell Laird and A&P, both of whom have been involved building sections of the Royal Navy’s two 65,000-tonnes carriers, are expected to be part of the strategy.
Key to the strategy is the build program for eight Type 26 anti-submarine warfare frigates and five, possibly more, Type 31 general purpose frigates.
The Ggovernment axed five of the planned fleet of 13 Type 26’s in November’s strategic defense and security review, replacing them with lighter, cheaper and, hopefully, more exportable Type 31’s.
Work on selecting a design for the Type 31 and figuring out how it will fit into the production schedule is now underway.
At the same time discussions are underway between the Government and BAE on a revised production schedule for the Type 26 and the award of a contract for the next tranche of work to be allocated to take forward development of the Type 26.
First metal on the Type 26 was originally scheduled to be cut later this year but that looks like being delayed.
A third industry executive said that production revision was as much to do with MoD budgets as design maturity.
Parker will report to the Treasury and the Defence Ministry of Defence but it’s the Cchancellor and his officials who are driving the agenda in much the same way as they are in making changes to how Ggovernment and industry will deliver Britain’s new £31 billion nuclear missile submarine program now awaiting a Pparliamentary go ahead.
Industry executives here, who asked not to be named, said Treasury interest in the high value surface and submarine building strategies suggests the Cchancellor still doesn’t wholly trust the MoD to deliver on big procurement programs even though it has sharpened it’s management of its financial affairs.
The National Shipbuilding Strategy could unfold just as MoD financial affairs come under heavy pressure again in the next couple of years.
A number of senior officers have been warning industry of hard times to come over the couple of years , particularly fiscalnancial year 2017/-2018.
The strategy Parker has been given charge of is looking to put Britain's naval shipbuilding industry on a more sustainable long-term basis with a mix of Royal Navy and export orders .
"It will look at the potential to build a new complex warship on a regular schedule and maximisze export opportunities in order to deliver capable ships and value for money, as well as maintaining jobs and skills," said the MoD spokeswoman.
At the time of Osborne’s visit to Portsmouth the Cchancellor said one of the things he had asked officials to look at was the potential to build a new complex warship every two years.
Nothing has been heard of that since Osborne took industry executives by surprise with the statement in 2015.