DN - Defence Notes

Portsmouth shipbuilding never had a chance

20th August 2014 - 08:08 GMT | by Tim Fish in London

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Efforts by the UK’s Portsmouth Shipbuilding – a consortium of marine consultancies and local businesses – to keep shipbuilding operations alive in the city were doomed to failure from the start.

According to Sarah Stanton, project director of Stanton Burdett, one of the firms involved in the consortium, they receive ‘no support from central or local government because unknown to us the decision had already been made to close the shipyard permanently’.

On 13 August Portsmouth Shipbuilding announced that its bid to keep a sustainable shipbuilding company operating in Portsmouth had failed after ten months of lobbying the government to secure support to keep the yard for building small and medium vessels for the naval and commercial sector.

However, Stanton told Shephard that all existing staff finished employment under redundancy, retirement, or reallocation from January-August 2014 so the consortium could not continue its bid.

‘The government and BAE had taken the decision to close Portsmouth two years earlier. The Portsmouth MPs, local councillors and Solent Enterprise Fund were privy to the decision and as a result had secured funding called the City Deal,’ Stanton said.

In 2013, BAE Systems decided to move its surface shipbuilding operations to the Clyde and close its Portsmouth facility. It was hoped that one of the three Offshore Patrol Vessels (OPVs) the government was planning to build for the Royal Navy could be allocated to Portsmouth and keep the skilled workforce employed through to 2018 whilst a future order book could be established.

‘The contract was not formally let to BAE so there was an opportunity for the government to reallocate an OPV should they want to retain a national sovereignty yard and have a mitigation facility particularly in light of the impending Scottish independence vote,’ Stanton said.

The government awarded BAE Systems the OPV contract as it had signed a terms of business agreement (ToBA) in 2009 that guaranteed a minimum amount of work for the company to help preserve its operations and retain its workforce during slow periods of naval shipbuilding.

Stanton said: ‘There are concerns that this agreement along with the monopoly BAE are being allowed to operate by the government for UK shipbuilding provides only favour for the BAE shareholder.’ 

She argues that the Portsmouth Shipbuilding group’s proposal for taking on one of the OPVs was based on known quantities with the team at the yard and the facilities, and ‘in short all that was required was commitment from the government’, which was not forthcoming despite a promise by prime minister David Cameron to keep the shipyard open in an open letter in January.

‘BAE have ripped out all equipment so they are now empty sheds. The original footprint is significantly reduced as BAE have taken new leases on key buildings and the Defence Infrastructure Organisation continues to market the remaining footprint,’ Stanton said.

Meanwhile, BAE Systems has been awarded the OPV contract for £348 million along with a £200 million facility upgrade for its Scotstoun facility.

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