Letter from Minister for Defence Procurement
to the Chairman of the Committee (29 November 2002)
In its fourth Report of Session 2001-02 on Major
Procurement Projects, the House of Commons Defence Select Committee
commented on the RAND study into potential procurement strategies
for the future MOD warship programme, noting that the work commissioned
from RAND provided a valuable and timely analysis of the state
of the warship construction market in the UK. The Committee also
suggested that RAND's analysis would be a useful starting point
to establish a strategy for warship procurement.
You will recall from the Government's response
that RAND are already engaged in work to examine capacity issues
in the shipbuilding sector in the context of the Future Carrier
(CVF) programme and that the Department was considering taking
further work forward. You will wish to know that we have now reviewed
our requirements for further analysis of the sector, taking account
of the findings of the RAND report. As a result, we have asked
RAND to undertake a package of work to study a range of industrial
base issues, as follows:
— strategies for keeping the warshipbuilding
industry competitive and innovative, while sustaining a core industrial
capability in the sector;
— the capabilities (design, build and
outfitting) and capacity (infrastructure and manpower) required
of UK shipyards to undertake the future MoD shipbuilding programme,
which will build upon the data already gathered by RAND from their
work on the Type 45 and CVF studies; and
— the attributes that are necessary
for shipyards to be successful in both commercial and military
shipbuilding and the actions that might be taken to bring about
a more robust industrial base for shipbuilding in the UK.
This work will enhance the MoD's understanding
of what will be required of UK shipbuilders to undertake a demanding
future shipbuilding programme and is also intended to help us
identify ways of improving shipbuilding performance, with benefits
both to the industry and to the MoD. RAND are particularly well
placed to carry out the studies, possessing a wealth of knowledge
and data on MoD shipbuilding projects and the shipbuilding industry
more widely.
Although RAND have made a start, the bulk of
this work will not begin until next year and is expected to last
about nine months. I will make sure that the Committee is informed
of the outcome.
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