Today I am providing an update on our plans for the next stage of the Type 26 frigate programme. I am pleased to announce that my Department has placed a contract with a value of around £4.2 billion with BAE Systems to start the manufacture on the Clyde of five Type 26 Batch 2 anti-submarine warfare frigates. This is an excellent deal for the taxpayer and will strengthen and secure the UK shipbuilding enterprise, as set out in the “National Shipbuilding Strategy”.
The signing of the contract and the forthcoming cut steel for HMS Birmingham, the fourth ship in the class, are significant steps forward for the Type 26 programme. All three ships of the first batch of frigates are currently under construction in Govan and today’s announcement delivers on the Government’s promise to secure a build contract for the remaining vessels.
This Government are acutely aware of the importance of the UK maritime enterprise, particularly during these unprecedented times. The deal that has been negotiated for the Batch 2 ships is structured to motivate both sides to deliver a successful outcome, with both parties sharing in the pain and gain in delivering the programme, ensuring value for public money and, importantly, protecting taxpayers from any project overrun costs.
The contract will sustain more than 1,600 highly skilled jobs at BAE Systems on the Clyde, and secure a total of over 4,000 jobs across the supply chain in Britain. BAE has already employed over 500 apprentices on the programme, and plans to further expand and upskill its workforce as the build progresses. With over £1.2 billion of the new order being spent in the wider UK supply chain, the hiring of new apprentices, and an order book stretching into the 2030s, this contract provides a stable workstream across the British shipbuilding industry.
The Type 26 reference design has been successfully exported to Australia and Canada, which are developing the Australian Hunter Class and Canadian Surface Combatants respectively, demonstrating the world-class credentials of the platform and providing opportunities for British firms to contribute in the multinational supply chain.
The Batch 2 deal also introduces further investment in BAE Systems’ facilities on the Clyde, most obviously demonstrated by the submission of planning application for a new 175-metre long, 85-metre wide Shipbuilding Hall at Govan. The new hall will allow two frigates to be built under cover simultaneously and allow the ships to be built faster, improving efficiency in the programme and expanding the facilities for future work at the yard.
[HCWS367]