Select committee: Scottish Affairs Committee
Conclusion 72
Fourth Report - Defence in Scotland: military shipbuilding
Published 27 Jan 2023
Addressed to Scotland Office
Scottish Affairs Committee Defence in Scotland All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
Another tool the MOD uses to attempt to deliver benefits for local economies and communities is through using social value criteria to evaluate contracts. The MOD has a minimum 20 per cent weighting for social value. which will be applied to shipbuilding competitions.113 We heard that the three areas the MOD will use to evaluate social value are tackling economic inequality, fighting climate change and equal opportunity.114 Some 110 Defence in Scotland: military landscape: Government Response to the Committee’s First Report, Third Special Report of Session 2022–23, HC 674, p. 2 111 National Shipbuilding Office, National Shipbuilding Strategy Refresh, CP 605, 10 March 2022, p.51; Department for Transport, Maritime 2050: Navigating the Future, 24 January 2019 112 Q24 113 Ministry of Defence (DIS0031) 114 Q28 28 Defence in Scotland: military shipbuilding witnesses suggested different criteria should be used to measure social value: Ian Waddell of the Confederation of Shipbuilding and Engineering Unions argued in favour of the number of UK jobs supported by a bid, the value put into UK supply chains, and the level of tax to be paid in the UK, among others; Richard Powell of the Society of Maritime Industries argued that skills development should be a criterion.115 In evidence from the MOD it appeared these were used as criteria in at least some contracts. Vice Admiral Paul Marshall told us In terms of what more we can do, we put a heavy premium on social value in the contracting phase, and a big part of that is in supply chain development and encouraging our suppliers to develop the local supply chain for small to medium-sized enterprises. The Type 26 was a single-source contract, with BAE, and the social value framework did not apply. For the Type 31, we definitely applied those rules; we incentivised the development of the supply chain for the Type 31. We did similarly for Fleet Solid Support.116
From: Scottish Affairs Committee, Fourth Report - Defence in Scotland: military shipbuilding (HC 1096), 27 January 2023
Government response
The government responded to the whole report on 6 April 2023 (deadline 27 March 2023).
Summary written by Accountability Index from the government's response. It is not the government's own words.The MOD disagrees with the Committee's first conclusion and its conclusion on a potential Scottish workstream gap, while welcoming recognition of export success and the National Shipbuilding Office's Edinburgh presence and setting out its position on the pipeline, skills and SMEs.
- On the Fleet Solid Support contract, the MOD says the decision to award it to Team Resolute "did not prioritise short-term savings" and followed "a fair and open competition". It says it does not disclose details of losing bids, so it cannot say why the Team UK bid was non-compliant.
- The MOD "does not agree" that the award creates a potential gap in the workstream for the Scottish warship industry. It cites Type 31 construction continuing until 2028 and Type 26 construction "expected to continue into the mid-2030s".
- On the pipeline, the MOD says it is "subject to change" as it spans 30 years, but the National Shipbuilding Office "has committed to updating the shipbuilding pipeline at each multi-year Spending Review". For Type 32 frigates, the procurement route is "yet to be determined".
- On annual Type 26 updates to Parliament, the MOD "will consider its request". On skills, the UK Shipbuilding Skills Taskforce "intends to publish a report of recommended actions in autumn 2023", and its Chair "would be pleased to meet with the Committee" afterwards.