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1 October 2014, 07:40 | Updated: 30 March 2016, 13:50
More than 2,000 jobs have been secured at Portsmouth Naval Base - by a five-year contract handed to BAE Systems by the Ministry of Defence.
The MoD has awarded BAE a £600 million contract to support half of the Royal Navy's surface Fleet on UK and global operations as well as the management of HM Naval Base Portsmouth.
The contract award secures more than 2,000 jobs and 'demonstrates BAE Systems’ enduring commitment to the Solent region and to Portsmouth, home of the Royal Navy'. BAE said it follows a successful 12 year track record delivering services in Portsmouth, during which the company has delivered savings in excess of £173 million for the taxpayer.
It comes after hundreds of jobs were lost when BAE stopped shipbuilding at the base last year.
John Hudson, Managing Director, Maritime at BAE Systems, said:
“This contract is an excellent example of our continued commitment to work collaboratively with the Royal Navy to increase the efficiency and effectiveness of operations at our Portsmouth business.
“This is an exciting time for everyone at the naval base. Working together, we will prepare the naval base for the arrival of the UK’s Queen Elizabeth Class Aircraft Carriers and continue to use our ship design and build knowledge to support the surface Fleet in service. This supports the Royal Navy’s operational capability and will deliver further savings for taxpayers.”
Commodore Jeremy Rigby, Commander of Portsmouth Naval Base, said:
“The contract will keep the base running at the highest standards and will ensure our ships are in the best possible condition and operating at the highest capability. It has sustained more than 2,000 jobs at the base and many more in the supply chain.
“This announcement comes at an exciting time for Portsmouth Naval Base as we prepare for the arrival of the Royal Navy’s two new aircraft carriers – HMS Queen Elizabeth and HMS Prince of Wales.”
The Maritime Support Delivery Framework (MSDF) contract will run to 2019 and provides a partnering agreement between BAE Systems, the Royal Navy and the Ministry of Defence. The contract will deliver a range of support services to ships, including technical services, maintenance, repair and upgrades to ensure ships are available for their operational requirements.
It includes the management of the Portsmouth Naval Base estate on behalf of the Royal Navy, delivering everything that is needed to live and work on the base such as planning, engineering, hard facilities management, programme management and estates services covering energy, waterfront and logistics.
BAE Systems has been delivering services under the Warship Support Modernisation Initiative for the last 12 years and the Surface Ship Support Programme since 2011 during which the overall cost of providing services in Portsmouth Naval Base has significantly reduced. Throughout this time BAE Systems has supported the local supply chain and significantly contributed to the local economy.
Portsmouth Naval Base will be developed following significant Government investment in the infrastructure of the site, upgrading and improving facilities and services and providing a long term future for Portsmouth. This will provide the basis for integration of services to support ships and will provide a vehicle to support future classes including the Queen Elizabeth Class Aircraft Carriers.
In total, the MoD has awarded £3.2 billion of contracts to support the management of the UK’s Naval Bases and maintain and repair the Royal Navy’s warships and submarines, directly sustaining more than 7,500 jobs across the UK.
Babcock, which manages Her Majesty’s Naval Bases (HMNB) at Devonport and Clyde, has been awarded a £2.6 billion contract.
The deal, which brings five existing contracts under one framework, represents excellent value for money for the MoD and the UK taxpayer with over £350 million of savings secured.
Defence Secretary Michael Fallon, said:
“This huge investment in our Naval Bases will directly sustain more than 7,500 jobs and skills across the UK and ensure that the Royal Navy’s fleet of 56 warships and submarines are in the best possible condition and available for operations.
“Following the £3.5bn Scout armoured vehicle contract, this is the second biggest defence contract placed by this Government and reflects our commitment to giving our Armed Forces what they need to keep Britain safe.
“As a former Minister for Portsmouth I know how important Naval Bases are for the local economies so I am delighted that these contracts have been awarded.”
The contract will sustain around 1,500 jobs at HMNB Clyde and up to 4,000 jobs at HMNB Devonport for Babcock as well as the more than 2,000 BAE Systems jobs at Portsmouth.
First Sea Lord, Admiral Sir George Zambellas, said:
“These significant contracts represent a strategic investment in the Royal Navy’s essential infrastructure. Without the stalwart and tireless support provided by each of the three naval bases ashore, the ships and submarines of the Royal Navy would not be able to deploy as a credible, strategic and global presence at sea.”
Bernard Gray, MoD’s Chief of Defence Materiel, said:
“These contracts are another example of how the MoD is delivering on its major procurement programmes and finding both the right deal for the Armed Forces and driving down costs.
“The three Naval Bases in the UK play a vital role in the Defence of this country and in the economic well-being of the regions in which they are located.”
Shadow defence secretary Vernon Coaker MP said:
``Labour fully supports the role played by the defence industry in creating jobs, promoting British exports and sustaining excellence in design and manufacturing. The defence industry makes a hugely significant contribution to our economy.''
But he added: ``David Cameron's botched procurement plans caused uncertainty for industry and defence workers across the country.
``Workers at Devonport, Faslane and Portsmouth will welcome the fact that existing and previously proposed contracts will continue there. But what we need are long term decisions based on the country's defence needs, not cynically-timed announcements and made-up news for political ends.''