4,000 jobs at risk if Portsmouth’s shipbuilding base is closed

UNDER THREAT? A ship builder works on a section of the first of two Queen Elizabeth class aircraft carriers at BAE Systems in Portsmouth.
UNDER THREAT? A ship builder works on a section of the first of two Queen Elizabeth class aircraft carriers at BAE Systems in Portsmouth.

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ALMOST 4,000 jobs would be lost if shipbuilding was axed at Portsmouth dockyard, according to a report published today.

The study – commissioned by local council and business leaders – examines three alternative futures for Portsmouth Naval Base at a time when its shipbuilding future is in doubt.

PROGRESS The first section of the Royal Navy's new aircraft carrier rolls slowly out of the BAE Systems shipbuilding hall in Portsmouth Naval Base onto a barge.   Picture: Steve Reid (121432-204)

PROGRESS The first section of the Royal Navy's new aircraft carrier rolls slowly out of the BAE Systems shipbuilding hall in Portsmouth Naval Base onto a barge. Picture: Steve Reid (121432-204)

In the worst case scenario, if BAE Systems was to pull out, it would have a massive knock-on effect on the area – resulting in huge job losses, and a hit to the region’s economy of £370m a year.

BAE employs 1,500 ship builders in Portsmouth and a further 1,500 people working on the maintenance and repair work it does for the navy’s surface fleet.

But the report – commissioned by the Partnership for Urban South Hampshire (PUSH), the Solent Local Enterprise Partnership (LEP) and University of Portsmouth – looks at the wider impact on the area, and shows how the region would be hit if the shipbuilding firm was to pull out of Portsmouth.

The naval base overall generates annually £1.68bn for the local economy and supports nearly 20,000 jobs across south Hampshire, with 11,900 of those jobs in the base itself.

The report makes clear: ‘Any change that impacts directly on the base is likely to have consequences throughout the (local) economy, even for sectors that are not commercially connected to it.’

Cllr Sean Woodward, chairman of PUSH, a body made up of local councils, hoped the report would make it clear to the government – and BAE – how crucial shipbuilding was to the local economy.

The Fareham council leader said: ‘The completion of the report is very timely and it will help us in our campaign to secure the future of shipbuilding in Portsmouth and it confirms that this area is the premier global hub for defence and advanced manufacturing. The work also reinforces my long held view that the work of Portsmouth Naval Base lies at the heart of the south Hampshire economy.

‘Within this the defence sector is a key and highly valuable economic asset that we must preserve and build upon.

‘We will be showing the report to the government.

‘We have got very real concerns so we will be lobbying wherever we can, including of course BAE Systems.

‘We want to keep shipbuilding in Portsmouth – it’s important to so many aspects in the whole area.’

As reported in The News, a report commissioned by Defence Secretary Philip Hammond has been leaked which recommends that Portsmouth dockyard be closed.

According to a national newspaper, Mr Hammond has been told that BAE operations in the dockyard should be shut down and the supercarrier warship programme delayed.

In January it was also revealed that BAE had hired LEK Consulting to examine the future of Portsmouth and two dockyards on the River Clyde.

The shipbuilding giant is concerned that work would dry up once the second supercarrier, the Prince of Wales, was launched in 2018, with the Type 26 Global Combat Ship programme not starting until 2020.

The leader of Portsmouth City Council, Gerald Vernon-Jackson, said: ‘Portsmouth is the home of the Royal Navy.

‘The UK has only ever built our advanced warships in the UK and this should continue.

‘The UK can no longer bid to build some ship like tankers as we no longer have the technical know-how.

‘Advanced warship design and construction is a strategic imperative for a country where more than 90 per cent of our imports come by sea.

‘If these trade routes were cut we would have no food to eat, fuel for our cars or goods in the shops.

‘There is a strategic need for advanced warship shipbuilding in the UK and the only other yards are in Scotland that may soon be an independent country.’

A BAE spokeswoman said: ‘We continue to work closely with the Ministry of Defence to explore all possible options to determine how best to sustain the capability to deliver complex warships in the UK in the future.

‘We are committed to keeping our employees and trade unions informed as this work progresses.’

Portsmouth Naval Base brings great benefits to all of South Hampshire

The report, titled Socio-Economic Impact Assessment of Portsmouth Naval Base, highlights its importance to the region.

The financial impact is huge – for very £1m directly generated by the base, it stimulates another £750,000 of spending in other sectors in the region’s economy.

As of April 2012 Portsmouth is the base for 29 Royal Naval surface vessels and just under half the crews. It will also be the home‟ for the two new supercarriers.

The base currently has about 11,900 full time staff, 60 per cent of them civilians. And it is very important to specific sectors. Within the LEP, the base supports 70 per cent of all shipbuilding jobs, 27 per cent of all property and facilities management jobs and 22 per cent of metal goods jobs.

Expenditure from the base also supports almost 7,900 additional full time jobs across the LEP, he main beneficiaries being in the financial and business services sector, public services and manufacturing.

SCENARIO ONE

This scenario provides the best outcome for the region, resulting in a growth of 2,825 jobs and an extra £240m to the economy each year.

Shipbuilding would continue at Portsmouth at or around current levels and surface carriers, destroyers and frigates would be all based at Portsmouth. This would allow BAE to consolidate their shipbuilding and support activities at a single site – Portsmouth.

With new classes of ships being built and supported by BAE there are potential economies of scale by bringing all that work, including deep maintenance of these ships, to a single site.

Seven frigates and their crews, currently based at Devonport move to Portsmouth. Devonport would continue to be the base for nuclear submarines and amphibious ships.

As a result, ships’ crew numbers would increase by 44 per cent, naval base civilian and armed service staff under the control of the base commodore increase by 20 per cent, shipbuilding staff levels remain at current levels, BAE Maritime Services staff and other contractors increase by 10 per cent, while heritage site employment remains at current levels.

On the money side, ships’ crew household spending increases by 34 per cent, Naval Base civilian and armed service staff spending under the control of the base commodore increase by 10 per cent, shipbuilding staff spending remains at current levels, BAE Maritime Services staff spending and other contractors increase by five per cent, and heritage site spending remains the same.

Heritage visitor numbers and spending rises by 25 per cent, visits by ships’ crew by 10 per cent and commuter spending is enhanced by seven per cent. Spending on supplies and services remains the same.

SCENARIO TWO

The second scenario paints a mixed picture where growth in one activity is offset by a reduction in another. It would result in a loss of some 1,800 jobs and a loss of £190m to the local economy.

In this case shipbuilding stops at Portsmouth and the BAE workload is shared by the two Clyde yards and surface carriers, destroyers and frigates are all based at Portsmouth.

This is based on BAE concentrating their two maritime business segments of shipbuilding and Maritime Services at two centres of excellence – the Clyde and Portsmouth, but with additional capacity for export orders and more capacity for deep maintenance.

The consequences are that seven frigates and their crews based at Devonport move to Portsmouth and that shipbuilding activity winds down in Portsmouth towards the end of the Queen Elizabeth class aircraft carrier project.

Ships’ crew numbers grow by 44 per cent, Naval Base civilian and armed service staff under the control of the Base Commodore increase by 20 per cent, but shipbuilding staff levels reduce by 90 per cent. BAE Maritime Services staff and other contractors are boosted by 10 per cent, while heritage site employment remains at current levels.

Ships’ crew household expenditure increases by 34 per cent, but shipbuilding staff spending drops by 70 per cent. Spending on supplies and services drops by 45 per cent.

SCENARIO THREE

The third option represents the worst case scenario for the region, with a loss of 3,900 jobs and a loss of £370m to the economy.

In this case, the reduction in shipbuilding activity is not offset by additional vessels moving to Portsmouth or by BAE increasing the level of deep maintenance at the base.

In this case shipbuilding ceases at Portsmouth and the BAE workload is shared by the two Clyde yards. The present complement of destroyers and six frigates remain at Portsmouth and are joined by two Queen Elizabeth class aircraft carriers.

BAE concentrates on shipbuilding in a single centre of excellence and that Maritime Services operations move around more, using the facilities at both Devonport and Portsmouth for deep maintenance as and when necessary.

The consequences are that shipbuilding activity winds down towards the end of the Queen Elizabeth-class carrier project and that Maritime Services continues at around its current level.

Ships’ crew numbers increase by 15 per cent.

Naval Base civilian and armed service staff under the control of the base commodore remain at current levels.

But shipbuilding staff levels reduce by 90 per cent, BAE Maritime Services staff.

On the cash side, ships’ crew household expenditure rises by 10 per cent.

Naval Base civilian and armed service staff spending under the control of the base commodore remains at current levels, while shipbuilding staff spending reduces by 70 per cent.

BAE Maritime Services staff spending, other contractors and heritage site spending continues at existing levels.

Commuter spending reduces by 17 per cent. Spending on supplies and services diminishes by 45 per cent.