Select committee: Scottish Affairs Committee
Conclusion 76
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)
Professor Keith Hartley of the University of York told us that there was a limited understanding of shipbuilding supply chains: The problem we face in the Scottish shipbuilding industry is that, although we know the major primes like BAE and have a limited amount of information on their supply chains […] These supply chains are very complex, and Governments do not understand them and do not have any knowledge about them. They have knowledge about the first tier suppliers to the primes, but beyond that they really do not understand and have little knowledge.123 Knowledge gaps in this area make it more difficult to assess risks. For example, if a prime contractor sources components from a sole supplier, there is a risk of significant disruption if that supplier goes out of business. The MOD has recognised the importance of building more resilient supply chains in its new Defence Supply Chain Strategy, published in November 2022, which places a new emphasis on resilience in response to challenges like the COVID-19 pandemic and the conflict in Ukraine.124 Improving understanding of supply chains could also bring opportunities. For example, as industry knowledge about regional supply chains grows it could encourage greater collaboration between neighbouring businesses.125
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.