Supplementary evidence from BAE Systems Surface Fleet Solutions Ltd
During my recent evidence to the above Committee regarding the Defence Industry in Scotland, further supplementary information was requested.
Specifically, I now enclose additional information as follows:
1. Clarification of BAE Systems' view of the possible long-term impact of advertising the MARS Fleet Tankers in the Official Journal of the European Union, for open international competition.
2. Further information regarding potential areas for additional education and training funding in Scotland.
3. Further information regarding BAE Systems Surface Fleet Solutions contribution to its local communities, including letters from selected charity partners.
4. Details of BAE Systems Surface Fleet Solutions Schools Liaison Programme.[1]
5. A breakdown of BAE System's apprentice intake for 2007 by school.
I would be grateful if you would pass this information to the Committee and please do not hesitate to contact me directly should you require any further information.
Nigel Stewart
Commercial and New Business Director
19 February 2008
1. MARS
In relation to the company's written evidence, the Committee asked on 29 January for clarification of the company view about long-term the impact of advertising the early MARS vessels in the Official Journal of the European Union for open international competition. The Committee asked whether the company had received clear legal advice on the matter.
The issue that concerns the company relates to the consequences of the European Commission's clear intention to expand its legal competence in the defence procurement field. This is evident from the European Commission's Interpretative Communication on the application of Article 296 of the Treaty (COM(2006)779) of 6 December 2006, which argues that a Member State should consider on a case by case basis whether a procurement relates to the essential interests of its security before using the exemption from EU public procurement law. Further, to facilitate future use of EU law for defence procurement, the Commission published on 5 December 2007 a draft Defence Procurement Directive which addresses some specificities of the market. While there is certainly ground to argue that the Art 296 exemption is too widely used at present, there is concern that the scope for using Art 296 may become so narrowly defined in the future as to impinge on the UK's ability to protect its legitimate interests in security of supply and sustainment of industrial capability in support of operational sovereignty as set out in the Defence Industrial Strategy.
It is not a question of being able to offer a definitive legal interpretation at this stage because it is a developing picture. It is this uncertainty that the company sought to highlight in its written evidence. It is possible that the precedent created by the decision to advertise the early MARS vessels for international competition will have the effect of inhibiting a future invocation of Art 296 for the later MARS vessels—whether on grounds of their warlike nature or on grounds of the need to sustain key national naval shipbuilding capability required to maintain operational sovereignty as required by DIS.
As to the question concerning the Government's commitment to procure, our concern is that, having chosen to publish in the EU Official Journal, the Government has signalled that it does not consider the current procurement to be covered by the Art 296 exemption. It might be difficult now for MOD to modify that position and to place orders with British industry for reasons of industrial strategy.
2. EDUCATIONAL FUNDING IN SCOTLAND
The Committee asked the panel to consider areas of education and training where there might be a current shortfall or future requirement for additional government funding. Below are a number of areas where there are considerable requirements or opportunities for expansion and which we believe should be considered for such additional support.
Leitch Review/Skill Pledge
The Leitch Review has called for UK industry to sign up to the "Skill Pledge", whereby employers will support their employees to acquire basic literacy and numeracy skills and support them working towards their first Level 2 qualification in an area that is relevant to the business.
BAE Systems has signed up to the "Skills Pledge" and this is an excellent initiative. We are essentially a high skill company and all our new apprentices are trained to Level 3. Once analysis of the wider workforce has been completed and a baseline established, we will be able to determine the way forward regarding what development, volumes and the associated investment will be required to meet the Skills Pledge across the entire employee population.
We believe that a higher minimum grade of at least Level 3 would deliver considerable benefit to both individuals and the company. This investment could be significant for some sections of our workforce and we would look for additional Government support for this programme.
Accelerated Adult Modern Apprenticeships
Over the past five years, Surface Fleet Solutions have recruited over 500 apprentices onto our award winning Modern Apprenticeship Programme and we are proud to have completion / retention rate of over 90%. Whilst this is a significant achievement and a funding contribution is received through Scottish Enterprise, we realise that there are people in our communities that for a variety of reasons have missed opportunities in life like this.
The Engineering and Construction sector is particularly buoyant at the moment and this situation will continue over the coming years with other major projects being undertaken to support other events—Commonwealth Games, Olympics etc. This will result in businesses requiring similar resources from the same pool—a pool that is not growing fast enough through existing channels to meet demand. The sector needs to unlock these avenues that have not been fully explored so that untapped "talent" can be utilised through employment and hence contributing to the overall economy.
We are in the process of designing a pilot Accelerated Adult Modern Apprenticeship programme with our industry partners, Further Education providers and Scottish Enterprise to develop a small number of current "semi-skilled" employees who are already working in our businesses. Once this pilot is completed, the plan in Scotland would be to roll this out to the wider population in our communities and we would look to receive significant funding for this initiative which we believe is a "medium/high risk" population, but one that will help us meet the resource challenges that we will face in the future.
Education Liaison Activities
Over the past three to four years BAE Systems has invested significant resources in engaging with its local communities and schools through industry bodies such as SEMTA, Scottish Engineering and Scottish Enterprise to promote engineering and the uptake of STEM subjects.
(Science, Technology, Engineering and Manufacturing). A variety of initiatives are ongoing including schools roadshows, engineering challenges, school visits to yards, launches etc. Despite our efforts, we come across teachers, careers advisors, puplis and parents who still believe that shipbuilding is an undesirable industry/career to get involved in and the perception still exists, unfortunately, that shipbuilding on the Clyde ended years ago.
In order to address these perceptions, raise awareness and get children interested, we believe that the time is appropriate to seek funding of a full time "Education Liaison Officer" for our business, or funding for delivering a more structured work experience programme and resource materials. At a time when we are about to embark on the detailed design and manufacture of the two largest warships ever manufactured in this country—we need to really ramp up this activity, raise the profile of the project and get children interested. This role would help us get there.
3. BAE SYSTEMS SURFACE FLEET SOLUTIONS COMMUNITY CONTRIBUTION
Economic Impact
With its two sites on the Clyde, at Scotstoun and Govan, employing in excess of three thousand people, BAE Systems Surface Fleet Solutions is a very significant part of the local communities in which it operates.
A Fraser of Allander Institute study estimates that every job provided by BAE Systems at Govan and Scotstoun supports an additional 0.57 jobs in other industries in Scotland. BAE Systems Surface Fleet Solutions therefore supports approximately 5,180 across Scotland as a whole.
The Institute estimates that every £1 paid directly in wages to BAE Systems employees supports £0.46 worth of wage income elsewhere in Scotland. In 2006 this was equivalent to a total of £111.7m in wages across the Scottish economy. The study also estimates that the £133.2 million worth of output created at Govan and Scotstoun in 2006 supported an additional £105.0 million worth of output in other industries in Scotland.
This means that BAE Systems operations at Govan and Scotstoun support a total amount of output of £238.2 million across Scotland as a whole.
BAE Systems SFS has taken on over 500 apprentices in the last five years and also has an active graduate scheme that attracts university leavers from a wide range of disciplines. The retention rate of people completing these schemes is amongst the highest in the industry.
Aside from its role as a major employer, trainer and user of local suppliers, BAE Systems plays a positive and proactive role in the development and improvement of its local communities, focusing in particular on local education and community charities.
Education
BAE Systems Surface Fleet Solutions runs considerable educational activity within local schools and colleges. This includes an Ambassador Scheme, a work experience programme, a dedicated website for young people, teachers, parents and employees offering a wealth of classroom materials and a Corporate Education Road Show visiting local schools.
A more detailed overview of this activity is provided in an accompanying document.
In addition to this general education programme, BAE Systems Surface Fleet Solutions has started a highly targeted and strategic partnership with one particular school. Govan High School is a near neighbour to the Govan ship yard and is in one of the most deprived areas in Glasgow, with many of the children coming from families that are second and third generation unemployed. Analysis of the applications from the school for BAE Systems' Modern Apprentice Scheme revealed that they were consistently and significantly less successful compared with other schools in the vicinity.
In order to address this we have started an innovative, long-term programme, working closely with the head and deputy head teachers to ensure that the school is better equipped to prepare appropriate pupils for the application process. This programme will build on the existing partnership between the school and BAE Systems' Learning and Development Team to better understand both the company's requirements and the schools' own unique qualification system (they are no longer using the traditional Standard Grade system). Teachers and students are being invited into the yards to see the type of role successful applicants could play and the type of work environment in which they will be based. The longer term goal is to develop a more comprehensive mentoring programme which will develop the student's communication skills, build confidence and provide guidance and support throughout the job application and prospective interview process as part of the company's Schools Ambassador Programme.
It is hoped that this long term partnership will both increase the number of pupils from Govan High School who are successful in winning places on the Modern Apprenticeship Scheme, but will better prepare them for all job applications and make a significant difference to the school leavers moving quickly from education into work.
Charity Challenge
BAE Systems runs a scheme entitled "Charity Challenge" under which it runs much of its community activity and charitable giving.
This money is raised through an enormous range of activity and the company matches funds raised by employees, donating matched funds to a charity voted for by employees. The 2007-8 partner charity is Macmillan Cancer Relief.
On the Clyde, the company set a target of raising in excess of £150,000 for local charities in the 18 months up to June 2008 and has already surpassed this target, with the amount raised to date already in excess of £170,000. In the previous campaign in excess of £150,000 was raised.
Employees have also volunteered in excess of 10,000 hours working with charity and community projects over the past two years.
In addition to raising money directly for local charities, the company also supports a considerable amount of additional community activity, using its resources and skills to undertake projects that directly benefit either local charities or other community schemes. Recently, this has included: designing and building a "Playship" for children in Victoria Park, Glasgow; restoring three barges for the Unity Trust for the use of disadvantaged groups; restoring furniture and equipment for Service Veterans at the Erskine Hospital; building a sensory garden for handicapped children.
In addition to the above, the company has a Charity Committee that awards discretionary donations to a wide selection of local causes. Over 50 charities, clubs and other local associations have benefited from such donations in the past two years.
A selection of letters received from such charities is attached for further information.[2]
5. BAE SYSTEMS MODERN APPRENTICE SCHEME 2007 INTAKE
|
School Attended |
No. Started |
|
Ardrossan Academy |
1 |
|
Balfron High School |
1 |
|
Bellahouston Academy |
2 |
|
Bellshill Academy |
3 |
|
Bishopbriggs Academy |
1 |
|
Boclair Academy |
2 |
|
Braidfield High School |
1 |
|
Cathkin High School |
2 |
|
Chryston High School |
1 |
|
Claremont High School |
1 |
|
Cleveden Secondary School |
1 |
|
Clydebank High School |
2 |
|
Coatbridge High School |
1 |
|
Douglas Academy |
4 |
|
Drumchapel High School |
1 |
|
Dumbarton Academy |
1 |
|
Duncanrig Secondary School |
2 |
|
Earnock High School |
3 |
|
Glasgow College Of Nautical Studies |
1 |
|
Gleniffer High School Paisley |
1 |
|
Gourock High School |
2 |
|
Greenfaulds High School |
1 |
|
Greenock high |
1 |
|
Hermitage Academy |
2 |
|
Holyrood Secondary |
4 |
|
James Hamilton Academy |
1 |
|
John Paul Academy |
3 |
|
Johnstone High |
1 |
|
Kilsyth Academy |
1 |
|
Kings Park High School |
1 |
|
Kinlochleven High School |
1 |
|
Kirkintilloch High School |
1 |
|
Larbert High School |
1 |
|
Largs Academy |
1 |
|
Lenzie Academy |
1 |
|
Linwood High School |
1 |
|
Lochaber High School |
1 |
|
Lochend Community High School |
1 |
|
Lomond School |
1 |
|
Lourdes Secondary |
1 |
|
Marr College |
1 |
|
Mearns Castle High School |
2 |
|
Notre Dame High School |
8 |
|
Our Lady & St Patricks High School |
6 |
|
Paisley Grammar School |
3 |
|
Park Mains High School |
2 |
|
Penilee Secondary |
1 |
|
Renfew High School |
1 |
|
Rosehall High School |
1 |
|
Rosshall Academy |
3 |
|
Saint Paul's R.C. High School |
1 |
|
Saint Thomas Aquinas Glasgow |
1 |
|
Sgoil Lionacleit, Benbecula |
1 |
|
Smithycroft Secondary |
1 |
|
St Aidans High School |
1 |
|
St Andrews Academy |
1 |
|
St Andrews Secondary |
1 |
|
St Benedict's High School |
1 |
|
St Columbas High School |
4 |
|
St Columba's School |
1 |
|
St Margaret Marys Secondary School |
1 |
|
St Roch's Secondary School |
1 |
|
St Stephan's High School |
2 |
|
St Thomas Aquinas |
2 |
|
St. Andrews Academy |
1 |
|
St. Andrews High School |
4 |
|
St. Ninians |
1 |
|
Stewarton Academy |
2 |
|
Trinity High School |
1 |
|
Turnbull High School |
2 |
|
Wellington Academy |
2 |
| |
119 |
1 Not printed here. Back
2 Not printed here. Back
| 
