£1.6bn contract for Royal Navy support ships awarded to UK consortium

A British-led consortium has been chosen as the preferred bidder to build new support ships for the Royal Navy – creating 1,200 new jobs in UK shipyards and hundreds more in the supply chain – the Ministry of Defence has said.

The £1.6 billion contract will see final assembly for the three vessels – each the length of two Premier League football pitches – take place at Harland & Wolff’s shipyard in Belfast.

However, Labour and the trade unions accused the ministers of a “betrayal” after it was disclosed some of the work would be carried out in Spain.

The MoD said the agreement would allow for key skills and technology to be transferred from the Cadiz yard of Navantia, which it described as a world-leading auxiliary shipbuilder.

But unions said that it would mean most of the high-value work and the intellectual property going overseas.

The MoD said the three 216-metre Fleet Solid Support (FSS) ships will be built to an entirely British design by Bath-based BMT which forms the rest of the Team Resolute consortium.

The “majority” of the blocks and modules for the ships will be constructed at Harland & Wolff in Belfast and Appledore in Devon, with components manufactured at centres in Methil in Fife and Arnish on the Isle of Lewis.

The contract is subject to final Treasury and ministerial approval.

Defence Secretary Ben Wallace said the announcement was a “significant boost” to the UK shipbuilding industry.

“By selecting Team Resolute, the Ministry of Defence has chosen a proposal which includes £77 million of investment into the UK shipyards, creating around 2,000 UK jobs, and showcasing cutting-edge British design,” he said.

“Building on ambitions laid out in the National Shipbuilding Strategy, this contract will bolster technology transfer and key skills from a world-renowned shipbuilder, crucial in the modernisation of British shipyards.”

However, shadow defence secretary John Healey said: “This decision is a betrayal of British jobs and British business.

“Ministers have rejected a big opportunity to boost our UK economy and strengthen our sovereign industrial capability at a time when threats are increasing.”

Mike Clancy, general secretary of the Prospect union, said it was “a terrible, short-sighted decision” and a missed opportunity to support the whole of UK shipbuilding.

“At a time when the economy is struggling it is short-sighted in the extreme to go with a bid that takes most of the high-value work and intellectual property overseas,” he said.

“Spain will be delighted with the Government’s approach to levelling up. It is now essential that the Government does all it can to maximise the small amount of work going to UK yards.”

GMB national officer Matt Roberts called for reassurances from ministers that UK shipyards would get the work they needed to prosper.

“It’s only a few short years since Harland & Wolff, set to benefit from this bid, was occupied by workers to save the yard from closure,” he said.

“Ever since the last RFA order debacle from the Tory Government back in 2012, we have campaigned for all of the build work on FSS to be done in the UK and for each shipyard in every nation and region of the country to get decent packages of work from this big Government order.

“Ministers finally concede a ‘significant’ amount of the FSS work will be done at home. The problem is that they don’t define ‘significant’ by volume or value and they don’t tell us what guarantees or enforceability there is. Due diligence must be rigorous.”