Select committee: Scottish Affairs Committee
Conclusion 73
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)
We heard there was some uncertainty over how MOD assessed social value, and how delivery of social value would be measured. Industry representatives told the Defence Committee that social value was “probably the biggest factor in deciding who will win these contracts, and we don’t understand what the criteria are.”117 Kevin Craven of ADS Group gave us the example of job creation, asking how the MOD would judge “the difference between a bidder offering 200 new jobs for five years compared with someone who commits to maintaining 150 permanent jobs.”118 Hans Pung of RAND Europe said it was not clear whether only social value delivered in the UK would be counted towards the criteria, and if so how that would be measured.119 It was also not clear what penalties contractors would face if they did not deliver the social value they had promised.120 When we asked how delivery of social value was measured, we were told by Vice Admiral Paul Marshall that “we are getting greater detail on where it is working, because we have the governance in place because it is a contractual obligation.”121 He added that apprentice numbers were one measure that was being used.122
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.