UK Ministry of Defence signs £3.7bn warship deal with BAE Systems

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The UK Ministry of Defence has given BAE Systems the go-ahead to build a new fleet of high-tech warships after months of delay, signing a £3.7bn contract for three anti-submarine Type 26 vessels.

The steel on Britain’s first digitally-designed and developed warships will be cut in the coming weeks, some seven months later than initially planned and before the government publishes its long-awaited national shipbuilding strategy.

The green light to build the first three of eight frigates that will protect Britain’s new aircraft carriers will bring relief to workers at the Govan and Scotstoun shipyards in Scotland, which are owned by BAE. Unions have repeatedly warned that the delay was putting thousands of jobs at risk.

MPs and senior military officers have also criticised the delay, suggesting it would not only drive up the costs of construction but also potentially harm Britain’s ability to build complex warships in the future.

The MoD and BAE said on Sunday that the contract would secure some 1,700 shipbuilding jobs in Scotland and an equivalent number throughout the supply chain in Britain until 2035.

Charles Woodburn, BAE’s new chief executive, said the contract would “reinforce Glasgow as the centre of shipbuilding in the UK”.

Michael Fallon, defence secretary, said the contract had been “designed to protect [taxpayers] from extra bills from project overrun”.

However, neither the MoD nor BAE would say how the risk on one of the UK’s biggest defence contracts — at an estimated total of £8bn — was being shared.

The Type 26 Global Combat Ship will eventually replace the UK’s ageing fleet of Type 23 anti-submarine frigates. It will be a highly-flexible warship capable of supporting a variety of missions, from high-intensity combat to humanitarian relief.

Admiral Sir Philip Jones, first sea lord and chief of Naval Staff, said that with 500 submarines navigating the seas for 40 navies, the Type 26 was vital to national security.

“As one of the quietest and most potent submarine-hunters of any Navy, the Type 26 will have a crucial role to play to protect the nuclear deterrent and our two new aircraft carriers,” he said.

Defence experts have suggested that the delay in manufacturing the warships could lead to a gap between the retirement of the first Type 23 in 2023 and its replacement by a Type 26 in the “mid-2020s”.

“This is an incredibly tight timeframe,” said Francis Tusa, editor of Defence Analysis, an industry publication. “They had to place this order because they could not keep saying no. It would have cost more if it was further delayed.”

Mr Tusa also criticised the decision to limit the initial order to three warships, saying: “It shows the budget is under extreme pressure and they are not thinking clearly.”

MoD officials said initially ordering three warships followed normal procurement procedure, and would ensure that lessons learned from the first ships could be applied to the last five warships.

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