Memorandum submitted by Scottish Enterprise
(SHP 3)
Summary
This submission should be read alongside the
Clyde Shipyards Task Force Report[1]
in which SE Glasgow played a leading role. SE does not wish to
simply duplicate the contents of this report and this submission
emphasises some of the main messages of the report, namely:
— Shipbuilding on the Clyde has a future
if BAE SYSTEMS can deliver on the strategy presented to the Taskforce.
— Shipbuilding is a high value added industry
demanding sophisticated engineering skills and offering sustainable
opportunities for young people in the area. Attracting young people
into the industry will be a critical issue if it is to thrive.
— Regenerating the communities damaged
by the previous decline in shipbuilding remains a challenging
task.
SE has a strong role to play in supporting the future
of shipbuilding on the Clyde through the continued work of the
Taskforce, through skills support and through investment in shipbuilding
communities.
Introduction
UK shipbuilding currently employs 24,000 directly
with a further 50,000 involved in contract and supply. It turns
over some £1.75 billion a year accounting for 1 per cent
of world market share. Naval orders from the Ministry of Defence
are currently providing the bedrock of demand with merchant ship
deliveries running at around 25 ships per annum. In comparison
the Dutch have order books running in excess of 200 per annum.
[1]
1. Scottish Enterprise (SE) were invited to lead
a Taskforce chaired by the Minister for Enterprise, Transport
and Lifelong Learning, Wendy Alexander MSP, in response to the
announcement from BAE SYSTEMS that 1,000 employees were to be
made redundant in the Upper Clyde shipyards.
2. SE Glasgow led on behalf of the SE Network
with Ron Culley managing the Taskforce's work and SE Glasgow's
senior staff chairing three of the four sub-groups set up to look
in detail at aspects of the challenge.
3. Given the central role SE has played in the
production of the Clyde Shipyards Task Force Report, this submission
will be brief as SE fully supports the work of the Taskforce and
the conclusions of the report.
4. This submission will highlight the conclusions
of most significance to SE, comment on the relationship with the
Working Group examining the wider regeneration of the Clyde Waterfront
and advise on progress being made towards implementing the recommendations.
5. The Taskforce will meet twice during 2002
to review progress against each of the 29 recommendations [3]
Main Conclusions
6. Shipbuilding on the Clyde has a future. If
BAE SYSTEMS holds to the strategy set out to members of the Taskforce,
there is a good prospect of an order book for a workforce of some
2,000 in the Govan and Scotstoun yards for at least another 10
years.
7. With BAE SYSTEMS choosing to concentrate on
naval shipbuilding, the decisions of the MoD will be critical.
The Taskforce report outlined the schedule of warships for the
MoD[5]. Securing a share of the orders for the 12 Type 45 destroyers,
the four Alternative Landing Ships Logistics (ALSL) and the two
aircraft carriers are all significant to the future of the Clyde
yards.
8. So too will be BAE SYSTEMS continued efforts
to secure export orders and to match the packages offered by foreign
competitors such as those from the Blohm and Voss yard in Hamburg
which a delegation from the Taskforce visited [6]. Blohm and Voss
are one example demonstrating that technical advances in commercial
shipbuilding can sit alongside naval work and, whilst naval will
be the main source of work for BAE SYSTEMS Marine, opportunities
for securing appropriate commercial work should not be ignored.
9. Shipbuilding is a high value added, knowledge
intensive industry. The Taskforce were impressed at the complexity
of the engineering skills involved in building modern, cutting-edge
technology warships. Very little of the value of naval ships lies
in the basic structure. Some 70 per cent is embedded in the sensor,
weapons and control systems [7].
10. If the Clyde is to retain a significant role
in shipbuilding it is the design skills in these areas that will
be crucial. The strategy framework for the Enterprise Networks
set out in the Scottish Executive document "A Smart Successful
Scotland"[8] stresses the importance of supporting ventures
with high added value. Naval shipbuilding on the Clyde is clearly
one such venture. SE will continue to play its role in supporting
this venture through its leadership of the continued work of the
Clyde Taskforce, its support for skills investment and its investment
in community regeneration in Govan and Scotstoun.
11. Another role SE must play is in assisting
the recovery of the damaged shipbuilding communities. The effects
of the previous long-term decline have been severe. Both the Govan
and Scotstoun communities have seen the heart of their employment
base wither as yards closed and as many of the mechanical engineering
companies that supplied the yards lost their customer base.
12. A previous study carried out by SE confirmed
how far the shipbuilding cluster had collapsed with very little
of the historic supply chains connected to the yards remaining
[9].
13. The consequences for unemployment, poverty
and dereliction in the shipbuilding communities have been well
recorded with both Govan and Scotstoun/Yoker now benefiting from
Social Inclusion Partnerships. In Govan, SE Glasgow also continues
to support Govan Initiative Ltd., a local economic development
company initially set up by the Scottish Development Agency, Strathclyde
Regional Council and Glasgow City Council to provide additional
focus to economic development in an area of particular disadvantage
and opportunity. Scottish Enterprise Dunbartonshire has and continues
to work through the Clydebank Task Force to develop responses
to the change in employment and industrial base of that area.
14. There are several opportunities that SE can
grasp to help Govan and Scotstoun continue their recovery. The
strategic regeneration of the Clyde Waterfront is especially important
and is explained below. Within the context of a strategy for the
waterfront, SE and other partners can also support many of the
individual projects outlined in the Taskforce report[10]. SE is
committed to doing so.
15. SE welcomes the Trades Unions and the Taskforce's
success in reducing the immediate impact of BAE SYSTEM's redundancy
programme, thereby helping to minimise further damage to these
communities. SE has and will continue to assist in delivering
support to those made redundant through short term training, re-skilling
and careers support. Measures used include Modern Apprenticeships,
Training for Work and REACT (a dedicated redundancy management
organisation) which staffed the two Employee Support Centres (ESC)
in Govan and Scotstoun. Both ESC's include a telephone based call
centre helpline set up in partnership with the Scottish University
for Industry.
The Regeneration of the Clyde Waterfront
16. Regeneration of the Clyde Waterfront from
Glasgow City Centre west to the Erskine Bridge can play a key
role in ensuring that Glasgow and the wider conurbation builds
on its growing reputation as a dynamic business location and an
attractive place to live and enjoy life.
17. In a developing partnership with three local
authorities and the Scottish Executive, SE is taking forward a
concerted effort to develop an investment plan to support the
strategic regeneration of the Clyde Waterfront so that the future
economic role of the riverfront will match its historic role in
providing jobs for the West of Scotland. Work to build on existing
strategies for particular locations on the Waterfront began following
a meeting initiated by the Minister for Enterprise, Transport
and Lifelong Learning in November 2001.
18. The approach is to strengthen the connections
between the actions of all the potential investors both public
and private. Key existing proposals include the International
Financial Services District centred on Broomielaw, Pacific Quay's
Digital Media Campus, Clydeport and the Bank of Scotland's Glasgow
Harbour project and the developing visions for North Renfrew and
Clydebank.
19. A strategic framework will be set out to
give confidence to investors and citizens that partners have a
clear ambitious vision for and commitment to the waterfront. Issues
such as transport, river infrastructure, marketing and development
funding will all be examined. It will be critical that the employment
benefits from development should be accessible to local people
and that the redeveloped waterfront should be as open as possible
to the people.
20. Specifically the work will:
— Identify the full development potential
of the area through a strategic benchmarking, market assessment
and economic impact study;
— Assess technical and infrastructure issues
that may need to be addressed to achieve the potential of the
area.
21. The outputs of the first stage of the initiative
will be discussed at a summit with the Minister, private sector
investors, council leaders and chairs of the appropriate public
sector bodies on 23 May 2002.
Implementation
22. Ron Culley has been asked by the Minister
to chair two meetings—in June and in December—to review
progress in the implementation of the Taskforce report. A schedule
of progress to date has been compiled by the Scottish Executive
and we understand that this will be submitted by them as evidence.
We conclude our submission by noting in summary highlights of
the progress so far made relevant to SE.
23. SE welcomes the good news for BAE SYSTEMS
Marine on progress in implementing its strategy for the Clyde
yards. The signings of contracts for the two ALSLs and the six
Type 45 frigates are both very encouraging. The announcement by
Thales of its own strategy for the construction of the aircraft
carriers also confirms that there is likely to be a role for the
Upper Clyde whichever of BAE SYSTEMS or Thales wins the prime
contracting office role. The full extent of the comparable man
hours involved in each proposal however remains confidential and
is consequently uncertain.
24. In increasing the support to Govan and Scotstoun,
SE Glasgow is currently completing the design and development
of a fund in partnership with the Strathclyde European Partnership
(drawing on European Regional Development Funds) and Glasgow City
Council. It is hoped that a fund of £15 million can be secured.
This fund will provide flexibility in responding to many of the
project opportunities specified in the Taskforce report.
25. Other opportunities—particularly the
suggested "Institute of Science and Technology"—will
need to be carefully considered in light of current initiatives
such as the proposed Intermediate Technology Institutes. These
Institutes are designed to allow universities to realise their
intellectual property, through identifying research ideas suitable
for commercialisation.
26. The redundancy programme was delayed to ensure
completion of the Auxiliary Oiler (Wave Knight) currently finalising
outfitting at Inchgreen in Greenock. To date, some 122 of those
made redundant have registered for assistance and of these, 43
have been placed in employment or training. Five have retired.
This work will continue.
27. In addition to the £15 million fund
being considered by Scottish Enterprise, Glasgow City Council
and Strathclyde European Partnership, SE has already set aside
and is spending over £1 million of funds for the appropriate
training, re-skilling and careers support.
28. In conclusion, SE fully supports the work
of the Clyde Shipyards Task Force, welcomes the Task Force report,
will continue to work in partnership and play a significant role
in the development and delivery of several of the key project
recommendations.
Notes
1. SSA Yearbook 2002, Shipbuilders and Shiprepairers
Association
2. Clyde Shipyards Task Force Report, Scottish
Executive/Scotland Office/Department of Trade and Industry, January
2002, p16 -19
3. Clyde Shipyards Task Force Report, p12-14
4. Clyde Shipyards Task Force Report, p41
5. Clyde Shipyards Task Force Report, p31
6. Clyde Shipyards Task Force Report, p34
7. Clyde Shipyards Task Force Report, p41
8. A Smart Successful Scotland, Scottish Executive,
. . .
9. Marine Engineering, Technologies and Services
Cluster Analysis for Scottish Enterprise, Frontline Management
Consultants and Ron Botham Associates, June 2000
10. Clyde Shipyards Task Force Report, p78
26 April 2002
1 Available from the Scottish Executive. Back
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