Beyond Artful: Government and Industry Roles in Britain's Future

Whitehall Report 3-07

Beyond Artful: Government andIndustry Roles in Britain’s FutureSubmarine Design, Build and SupportGavin Ireland

The Royal United Services Institute

The launch of HMS Astute and the renewal of Britain’s strategic nuclear deterrent havefocused attention on the UK Submarine Industrial Base. Consistent with the Defence

Industrial Strategy, the industrial base is in the process of re-structuring to provide anaffordable, sustainable defence capability. This Whitehall Report seeks to explore some ofthe challenges facing the organizations responsible for the design, build, support anddisposal of Britain’s nuclear powered submarines, the most complex weapons platform inthe UK armed forces. This report begins with an analysis of the role and importance ofsubmarines in UK defence policy. Subsequently, the report analyzes Ministry of Defenceand industry from a comprehensive and forward-looking perspective, taking into accountthe operational requirements for future submarine classes, industrial structure,developments in contracting strategy and questions of emerging technology.

The Royal United Services Institute Whitehall Report 3-07

Beyond Artful: Government and Industry Roles inBritain’s Future Submarine Design, Build and Support

Gavin Ireland

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List of Acronyms

ASMIPT Attack Submarines Integrated Project TeamASuW Anti-Surface WarfareASW Anti-Submarine WarfareATTAC Availability Transformation, Tornado Aircraft ContractBAES BAE SystemsBNS Babcock Naval ServicesCFA Contracting for AvailabilityCOTS Commercial-Off-The-ShelfCVF Carrier Vehicular Future (Future Aircraft Carrier)DACP Defence Acquisition Change ProgrammeDE&S Defence Equipment and SupportDEC(UWE) Director Equipment Capability (Underwater Effects)DG Nuclear Director General NuclearDG Sub Director General SubmarineDIS Defence Industrial StrategyDLO Defence Logistics OrganizationDLoD Defence Line of DevelopmentDML Devonport Management LimitedDPA Defence Procurement AgencyDTI Department of Trade and IndustryDTS Defence Technology StrategyEB Electric BoatEIPT Equipment Integrated Project TeamFRPS Flotilla Reactor Plant Support ContractGIUK Greenland-Iceland-United KingdomHCDC House of Commons Defence CommitteeHVAC&R Heating, Ventilation, Air Conditioning and RefrigerationIAW Indicators and WarningIPT Integrated Project TeamISR Intelligence, Surveillance and ReconnaissanceJV Joint VentureKSF Key Supplier ForumLTCA Long Term Collaboration AgreementMARS Maritime Afloat Reach and SustainabilityMIS Maritime Industrial StrategyMoD Ministry of DefenceNSRP Nuclear Steam-Raising PlantPFG Pricing and Forecasting GroupPPP Public-Private PartnershipR&T Research and TechnologyRAMP Revalidation and Assisted Maintenance PeriodRC Reactor Compartment

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RCS Replacement Combat SystemSAM Submarine Acquisition ModernizationSDR Strategic Defence ReviewSF Special ForcesSIB Submarine Industrial BaseSLoC Sea Line of CommunicationSME Small/Medium EnterpriseSPO Submarine Programme OfferSSBN Ship Submersible Ballistic NuclearSSBN-F Ship Submersible Ballistic Nuclear – FutureSSK Ship Submersible ConventionalSSMG Submarine Support Management GroupSSN Ship Submersible NuclearSUBIPT Submarine Support Integrated Project TeamTLAM Tomahawk Land Attack MissileTLCM Through-life Capability ManagementTSS-D Transforming Submarine Support - DesignUK United KingdomUS United StatesWHLS Weapons Handling and Launch System

Acknowledgements

This Whitehall Report was written while the author was a full-time staff member, on secondmentfor seven months from October 2006 until May 2007, in the Military Sciences Department at theRoyal United Services Institute for Defence and Security Studies. The author would like to thank LeeWillett (Head, Maritime Studies Programme) and Michael Codner (Director, Military Sciences) atRUSI, and Martin Pulford and Tim Chittenden at BAE Systems for making this Whitehall Report pos-sible. The author also thanks Sandy Morris at ABN Amro, the UK Ministry of Defence, those acrossthe submarine defence industrial base, and those from Government departments, whose profes-sional and personal opinions contributed to this study.

Author

Gavin Ireland was, for a seven-month secondment during which this report was written, aResearcher in the Military Sciences Department, RUSI. He was seconded to RUSI from BAE SystemsSubmarine Solutions, where he is on the graduate development scheme. During his time at RUSI, healso co-authored RUSI’s Whitehall Report, ‘The United Kingdom’s Independent Strategic NuclearDeterrent’, and contributed articles to RUSI Defence Systems and the RUSI Newsbrief. He holds anMA (Hons) in International Relations from the University of St Andrews and an MA in Defence andSecurity Analysis from the Centre for Defence and International Security Studies at LancasterUniversity where he wrote his postgraduate dissertation on the role of the nuclear scientific com-plex in shaping emerging US nuclear weapons policy. His particular areas of interest are in the main-tenance of the UK defence industrial base, the role of technology in shaping operations and thetransfer of technology and working practices between defence and the motorsport industry.

Beyond Artful: Government and Industry Roles in Britain’s Future Submarine Design, Build and Support

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On 8 June 2007, the nuclear powered attacksubmarine (SSN) HMS Astute was rolled outfor launch. HMS Astute was the first Britishsubmarine to go in the water since 1998,when HMS Vengeance, the Vanguard classdeterrent submarine was launched, and thefirst SSN since the Trafalgar class boat HMSTriumph was launched in 1991. HMS Astute’slaunch, and the recent debate on the renewalof Britain’s strategic nuclear deterrent, hasfocused public and political attention on thefuture of the UK Submarine Industrial Base(SIB). In terms of the UK’s strategic deter-rent, the Government policy – supported byParliament following a vote on 14 March2007 – approved concept work for the succes-sor to the current fleet of Vanguard classnuclear powered ballistic missile submarines(SSBNs).1 Often to the exclusion of widerpolicy debate, industrial issues formed a cen-tral point around which the discussionrevolved, with focus ranging from the pro-posed seventeen year timescale for the pro-duction of a new SSBN (hereafter referred toas SSBN-F2), to the technical and regulatorychallenges inherent in supporting theVanguard class beyond a thirty year servicelife.3 As one commentator observed, ‘thefuture of Trident … becomes less a matter of

pure strategy and more a sort of countrydance in which tricky political and industrialsteps must be made at precisely the rightintervals.4

The decision to proceed with a succes-sor to the Vanguard class was also importantfor the Royal Navy’s continued operation ofnuclear powered attack submarines (SSNs) asthe build programmes for SSNs and SSBNsare mutually interdependent. Had the deci-sion been taken to renounce a submarine-based nuclear deterrent, the maintenance ofa nuclear submarine capability in the UKwould most likely have become unviable5 asan absence of future orders could have jeop-ardized the submarine build and supportinfrastructure. Whilst a fourth Astute classsubmarine could have been produced, thelikely departure of key skilled workers fromthe doomed enterprise may have ensuredthat the third Astute class boat, HMS Artful,would be the last nuclear powered subma-rine to be built in the UK.

But of course the SSN does not existsolely to sustain industrial capacity. As thisreport discusses, the role of the SSN inBritain’s execution of defence and securitypolicy is uniquely important, but oftenunderestimated. Furthermore, a wider

Introduction

1 Ministry of Defence (MoD) and Foreign & Commonwealth Office (FCO), The Future of the United Kingdom’s NuclearDeterrent. Presented to Parliament by The Secretary of State for Defence and The Secretary of State for Foreign andCommonwealth Affairs, by Command of Her Majesty. Command 6994, December 2006 (Norwich: The StationeryOffice [TSO]).2 The acronym SSBN-F stands for ‘Ship Submersible Ballistic Nuclear – Future’. At the time of writing, this identifica-tion has not been used officially by the Government. SSN stands for ‘Ship Submersible Nuclear’.3 Garwin et al, ‘Memorandum from Richard L. Garwin’, in House of Commons Defence Committee (HCDC), TheFuture of the United Kingdom’s Strategic Nuclear Deterrent: The White Paper, Ninth Report of Session 2006-07, HC 225-II,March 2007, Volume II Oral and Written Evidence, London, TSO, Ev.92.4 James Buchan, ‘Trident’, in Granta 96: War Zones, January 2007. p.189.5 Murray Easton (Managing Director, BAE Systems Submarine Solutions), HCDC, The Future of the United Kingdom’sStrategic Nuclear Deterrent: The Manufacturing and Skills Base, Fourth Report of Session 2006-07, HC 59, December2006, London, TSO, Ev.3.

Gavin Ireland

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appreciation of the linkage between opera-tional requirements and industrial structureis essential.

With the collapse of the industry seem-ingly averted, a pressing short-term require-ment is the decision on the fourth and subse-quent boats of the Astute class submarineprogramme. Boats four onwards, in a class ofup to seven hulls, are required to be substan-tially less costly to produce, requiring a fun-damental shift in the performance of indus-try and the Ministry of Defence (MoD). Thiseffort is led by what has become a much-needed, cohesive approach to the industryprovided by the MoD’s Defence IndustrialStrategy (DIS), its maritime component theMaritime Industrial Strategy (MIS) and thecultural changes sought by the DefenceAcquisition Change Programme (DACP).The MIS, at the time of writing still in devel-opment, is intended to be the ‘routemap’ forthe implementation of the principles of DISwhich relate to the maritime sector.

The challenges facing industry andMoD are considerable. Force levels for theUK nuclear submarine flotilla will havedeclined from twenty-one hulls in 1990 totwelve by 2008.6 The low rate of productionplaces pressure on the overheads of the buildfacilities. The new Astute class contains areactor core that will last the full twenty-fiveyear life of the submarine, drastically reduc-ing the workload for the upkeep facilities atDevonport which conducts the refuelling ofthe current flotilla. The cost of procuredparts, which constitute more than 50 per centof the value of the Astute class,7 is rising asspecialist suppliers consider an exit from thesubmarine market due to infrequent orders

and poor returns. Perhaps most importantly,the renewed emphasis on through-life costhas forced a dramatic shift in industry andMoD behaviour in order to secure bothindustrial sustainability and the future of thesubmarine as a key sovereign defence capa-bility.

The December 2005 DIS affirmed theneed to retain an indigenous capacity to‘deliver, operate and maintain [nuclear sub-marines] without significant reliance onunpredictable offshore expertise’.8 This pro-vided a clear statement of requirement forthe industry to work towards. But DIS alsosuggested that without a dramatic reductionin through-life costs, the Royal Navy mightnot be able to afford to operate nuclear pow-ered submarines in the future.

This carrot and stick approach – shelter-ing industry under the requirement for sover-eign control whilst urging massive change –is a feature of MoD-industry relations thatappears likely to continue over the comingdecade. The relative size of the carrot andthe stick is a matter for debate.

This report seeks to explore some ofthe challenges facing the organizationsresponsible for the design, build, support anddisposal of Britain’s nuclear powered sub-marines, the most complex weapons plat-form in the UK armed forces.9 The reportbegins with an analysis of the role andimportance of submarines in UK defencepolicy. Subsequently, the report will analyseMoD and industry approaches from a com-prehensive and forward-looking perspective,taking into account the operational require-ments for future submarines, industrial struc-ture, developments in contracting strategy

6 In 1990, there were four Resolution class SSBNs in service along with seventeen SSNs: seven Trafalgar class, sixSwiftsure class, two Valiant class and two Churchill class. Additionally, the Royal Navy operated eleven conventional-ly-powered attack submarines (SSKs). At the time of writing, the flotilla comprises four Vanguard class SSBNs, sevenTrafalgar class SSNs and two Swiftsure class SSNs. When HMS Trafalgar decommissions, SSN force levels will drop tothe required level of eight.7 BAE Systems, ‘Memorandum from BAE Systems’, HCDC, The Future of the United Kingdom’s Strategic NuclearDeterrent, Op. Cit., Ev.53.8 MoD, Defence Industrial Strategy, Defence White Paper, Cm. 6697, 2005, London, TSO, p.71.9 Ibid., p.60.


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and questions of emerging technology.

The report will address the following ques-tions:• Are nuclear-powered submarines an

essential UK defence capability, ormerely desirable?

• Are current force levels and availabilitysufficient to meet operational require-ments?

• Is the move to MoD-industry partner-ing, as sought by the DIS, the right wayto secure a sustainable and efficient SIB?

• What level of capability is required forcurrent and future submarine classes?

• What level of industrial infrastructureis required to support this?

• How are the sometimes conflictingdemands of initial-build cost reductionand through-life cost reduction to bemanaged?

• What are the leadership challenges forMoD as it seeks to change the structureand culture of the SIB and its own sub-marine community?

• How can collaboration with the UnitedStates’ submarine programme best beexploited?

• How are the demands of a new nuclearsubmarine programme to be reconciledwith those of the civil nuclear industry?

From this analysis, the report concludes that:• Nuclear powered submarines are a

unique asset of vital importance to theimplementation of UK defence policyacross a broad spectrum of operations.

• The introduction of the Astute classSSN will ensure that the Royal Navy’ssubmarines will continue to provideunrivalled flexibility no matter what thefuture environment demands of them.

• The partnering model outlined in DIS isthe most appropriate long-termapproach to this uniquely specialized,strategically important industry.

• The recent restructuring of the indus-try under BAE Systems and Babcock

requires strong leadership from MoD toensure that the aims of DIS are realized.

• Current force levels are alreadystretched to meet operational demands.Without substantial improvements inavailability, a reduction to seven SSNswould risk the Royal Navy being unableto meet current and likely future opera-tional requirements.

• A deeply self-critical view of submarinecapability is required from MoD inorder to establish the requirements forfuture classes. There is evidence thatthis is already underway.

• A broad view, encompassing industry’sneed for visibility of workload as wellas the Royal Navy’s operational require-ments, must be adopted acrossGovernment, not just MoD.

• In general, MoD intervention in thesupply chain should be minimized inorder to foster a self-sustaining, com-petitive industrial base.

• Research and technology (R&T) invest-ment in later Astute class boats will paydividends for the SSBN-F programmeby de-risking new design, technologiesand practices.

• The seventeen year timescale for pro-duction of SSBN-F is challenging in anumber of areas, and meeting itdepends on establishing clear prioritiesin the concept and assessment phases.

• In some specific cases (such as high-grade castings and forgings, and US-sourced material for SSBN-F), govern-ment intervention should be consideredin order to maintain security of supply.

• Just as submarine operations areunique, the industry that builds andsupports them is unique. The successfulfuture of UK submarine build and oper-ation depends on government andindustry continuing to find innovativesolutions to unique challenges.

Gavin Ireland

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An Enterprise TransformedHad this report been written three years ago,it would have been able to recommend anumber of areas for urgent attention in theSIB. Many of these may have been impossi-ble to implement at that time, given whatwas often a confrontational relationshipbetween the major companies in the SIB, andbetween the SIB and its MoD customer.Since then, dramatic progress has been madeby Government and industry, with the levelof commitment and co-operation between thecompanies of the SIB being hailed as exemplary.

In evidence to the House of CommonsDefence Committee (HCDC), representa-tives of several principal companies in theSIB presented a coherent view of the indus-try’s outlook and agreed on the importanceof the recent initiatives undertaken. The wit-nesses were particularly keen to emphasizethe work performed by the Key SupplierForum (KSF), initiated by BAE Systems in2006. The KSF draws together the seniormanagement of the principal companies cur-rently engaged in the Astute class pro-gramme in order to develop a coherent

approach to the submarine supply base andreduce the cost of supply into the Astute pro-gramme and future classes. The success ofthe KSF has spawned similar arrangementsfor the wider Astute supply base, as well asfor suppliers local to BAE Systems’ Barrow-in-Furness build facility. The KSF has reducedsome of the uncertainty inherent in an indus-try where many firms are monopoly suppli-ers and where MoD is their sole submarinecustomer. By engaging the customer and thesupply chain in the same forum, the fear insome quarters that the prime contractormight seek to take advantage of both is greatlyreduced. This trust is increasingly importantas the industrial model moves towards part-nering and consolidation over competition.

However, as successful as the forumshave been, there is a limit to what they canachieve; in evidence to the HCDC, theManaging Director of Weir, Strachan &Henshaw observed that, ‘even with the goodwork we are doing on the Key SupplierForum, still the main, by order of magni-tude, focus of that is unit production costsrather than through-life costs… [T]here is

The Key Supplier Forum

The KSF is composed of the customer (MoD), the prime contractor (BAE Systems), theDepartment of Trade and Industry (DTI) and the ten Key Supplier Partners, who representaround 75 per cent of the Astute programme’s material spend. The full KSF membership con-trols around 95 per cent of the total cost of the submarine programme, including through-lifecosts. The purpose of the KSF is to ensure a consistent understanding of current and futuresubmarine programmes, and the affordability challenges to be addressed.

The Key Supplier Partners, and their main scope of work, are: Alstom – Steam turbines and propulsionL3 Communications – Platform Management SystemMcTaggart Scott – Non-hull penetrating mastsRolls-Royce – Nuclear steam-raising plantSheffield Forgemasters Engineering – High-grade forgings and castingsThales – Elements of the combat system, including Sonar 2076, above water surveillance andexternal communicationsUltra Electronics – System and sub-system integrationWeir, Strachan & Henshaw – Weapons Handling and Launch System (WHLS)Wellman Defence – Air purification equipmentYork – Heating, Ventilation, Air Conditioning and Refrigeration (HVAC&R)


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still not enough attention paid to the fullthrough-life costs of the programme’.10

The complexity of a nuclear submarinedemands unique abilities from the industrythat builds and supports them. Pipework,electrical cables and hydraulic lines are lacedthrough the interior of the submarine, alongwith highly sensitive combat systems, machin-ery and a nuclear steam raising plant (NSRP).Therefore in a platform as densely integratedas a nuclear submarine, the penalties forneglecting through-life factors at initialdesign can be substantial, even more so thanfor surface ships. Accordingly, DIS recognisedthat a focus on through-life capability man-agement in submarines may require industri-al consolidation to occur as a prerequisite formanaging successfully this complexity.

This consolidation was never going tobe particularly straightforward, but impor-tant steps have been made over the past yeartowards long-term structural reform. Muchdepends on the approach taken by Babcock,the new owners of the Devonport submarinere-fit facility, but work is ongoing within theindustry to define how future co-operationcould best be structured. Arguably, what isrequired is a set of rigorous guidelines whichwill define the structure of the submarineindustry over the next two decades. In April2007, the Government detailed ongoingnegotiations between MoD and the keyindustrial players towards ‘[developing] prin-ciples for collaboration and [defining] how,commercially, collaboration may operate todeliver reduced cost and … improved futureperformance’.11 This is seen as a prelude to aLong Term Collaboration Agreement(LTCA) which would establish the industrialstructure for the design and build of SSBN-F.The extent to which the funding for work on

SSBN-F is tied to formalizing future collabo-ration remains unclear.

In its role as the customer, MoD is alsomaking considerable progress in improvingits approach. Having lost much of its subma-rine technical expertise since the early 1990s,MoD is now striving to reduce the cost ofprocuring and supporting nuclear sub-marines for the Royal Navy. The post ofDirector General Nuclear – or DG Nuclear –occupied by Rear Admiral Andrew Mathews,became in April 2006 the first dual-account-able Director General within what was untilApril this year the twin-agency MoD acquisi-tion structure of the Defence ProcurementAgency (DPA) and Defence LogisticsOrganization (DLO). With oversight of allsubmarine activity, DG Nuclear led the wayin meeting the DIS aim of creating a singleprogramme management organization with-in MoD. Since the DPA and DLO merged toform Defence Equipment and Support(DE&S) in April 2007, DG Nuclear has beenreplaced as an organization by DirectorGeneral Submarines. Under the newarrangement, Rear Admiral Matthews hasbeen freed of several other roles in order toconcentrate fully on submarine related work,where his organization has full oversight ofprocurement, support and capability insertion.

The dramatic progress of the past threeyears has set the SIB largely on track to pro-vide an environment where the constituentbusinesses can make sustainable profit andthe customer can acquire and maintain anaffordable submarine flotilla. Nonetheless,there is much work still to be done. TheNational Audit Office’s Major ProjectsReport detailed an in-year cost increase of£164m on the Astute programme,12 while theearly years of the SSBN-F programme will

10 Joe Oatley (Managing Director, Weir, Strachan & Henshaw), House of Commons Defence Committee, The Futureof the United Kingdom’s Strategic Nuclear Deterrent, Op. Cit., Ev.3.11 HCDC, ‘The Defence Industrial Strategy: Update. Government Reponse to the Committee’s Sixth Report ofSession 2006-07’, Eighth Special Report of Session 2006-07, TSO, April 2007, HC 481, p.3.12 National Audit Office (NAO), ‘Ministry of Defence Major Projects Report’, HC 23-1 Session 2006-07, 24 November2006, London: NAO. p.13.

Gavin Ireland

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need to be constructed with through-lifecosts as a high priority from the start.

The Affordability ImperativeReferring to the future cost of the Astuteclass in an October 2006 session of theHCDC, Liberal Democrat MP MikeHancock commented that, ‘There will comea time when [we cross] the line beyond whatis reasonable to pay for a fourth and fifthboat’. He continued that, ‘I think everyonehas to understand that there is an enormousrisk here, that if this price just goes on and onescalating, then there cannot be anotherorder, the nation just cannot afford it’.13

While Mr Hancock’s phrasing may berather dramatic, the view that continuedoperation of nuclear-powered submarinesmay eventually prove to be unaffordable hascome to be accepted across the SIB and MoD,but it extends beyond the build cost ofAstute. Speaking in 2005, John Coles, thendirector of the DLO’s Warship SupportAgency, commented on the £1.35bn annualcost of supporting the UK’s nuclear subma-rine capability, stating that ‘[t]here isimmense pressure from the [MoD] centre toreduce this figure’, adding that ‘the UK sub-marine industry is unsustainable in the longterm unless it restructures’.14

At the time of Mr Coles’ comment, theSubmarine Acquisition Modernization initia-tive (SAM) had been underway for a year. Ajoint MoD-industry study, SAM was anattempt to rationalize the UK industry andMoD’s own infrastructure to reflect thereduced flotilla size since the 1998 StrategicDefence Review (SDR). Crucially, SAMrevealed that the actual state of the industrywas perilous and more poorly understoodthan had been assumed, specifically regard-

ing major cost drivers and the fragility of thesupply chain.15

SAM resulted in a proposal, theSubmarine Programme Offer (SPO), fromMoD to industry, in which industry would berequired to meet stringent unit cost reduc-tion targets across the remainder of theAstute class, with the order for the next boatbeing contingent on the cost of the last. Theapparent limitation of the SPO was the lackof a structured commercial incentive forindustry to undergo such dramatic change,with the demand for cost reductions seem-ingly being forced by an overly assertive MoD.

However, while the SPO may havefailed to engage industry’s support, its keytenet – that without major cost reductionsthere would be no further orders – wasaccepted by industry. The approach since theSPO has been characterized by co-operationrather than confrontation. Industry has large-ly accepted MoD’s requirement for morecontrol of submarine design authority, whileMoD has accepted industry’s need for profitas vital to a sustainable industrial base, ratherthan being a case of corporate greed.

Such co-operation built the foundationsof reform in the SIB, but the renewal of thenuclear deterrent was arguably the true cata-lyst for change. In the months prior to theGovernment’s White Paper on the deterrent,the SIB accepted that the assertion in DIS –‘For submarine-based options, it will be veryimportant that MoD and industry are able todemonstrate an ability to drive down andcontrol the costs of nuclear submarine pro-grammes’16 – was credible and that withoutsubstantial change, the industry would notbe in a position to build a new class of SSBNwithin reasonable cost. Based on theGovernment’s figures, it is apparent that thefleet of up to four SSBNs forms by far the

13 HCDC, Defence Procurement 2006, First Report of Session 2006-07, HC 56, December 2006, London, TSO, Ev.25.14 Richard Scott, ‘Can UK submarine industry retain critical mass?’, Jane’s Defence Weekly, 1 July 2006.15 Commodore Mark Anderson Royal Navy (formerly Director Equipment Capability for Underwater Effect, MoD),‘Delivering Flexible Effect from Underwater’, RUSI Defence Systems, (Vol. 9 No. 2, Autumn 2006), p.39.16 MoD, Defence Industrial Strategy, Op. Cit. p.76.


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largest component of the acquisition cost ofthe renewed deterrent. Had the SIBremained on its previous trajectory, the costof replacing the Vanguard class could haveincreased sharply and placed the feasibility ofrenewal in doubt.17

Although the UK submarine industry isalready providing good value relative to theUnited States and France, it must be acceptedthat nuclear powered submarines are a majorcost to the UK. Therefore, there is a real needto establish the value of the capability thatsubmarines provide. The value of the SSBNhas been exhaustively discussed in the recentTrident renewal debate, principally in termsof its relative invulnerability and flexibility asthe delivery platform for the strategicnuclear deterrent. These characteristics areenduring, and the role of the SSBN haschanged little since the Resolution classentered service in 1968, although its capabili-

ty and posture have undergone significantchange over this period. It is the SSN which isthe more numerous type and is the focus ofcurrent attention with the launch of HMSAstute. Moreover, the SSN’s current andfuture roles are the subject of debate, partic-ularly in light of current ‘land-centric’ UKoperations, in which the Royal Navy risksbeing seen as irrelevant with the public, themedia and much of Whitehall fixated on Iraqand Afghanistan, to the exclusion of consid-ering the importance of naval forces toBritain’s defence, foreign, economic andsocial interests.18

An unfortunate spin-off of the deter-rent renewal debate is a perception in somequarters that SSNs exist for little other reasonthan to sustain industrial capacity. In theSpring 2007 edition of RUSI Defence Systems,the experienced individuals who form theRUSI Acquisition Focus produced their thirdpaper entitled, ‘The Underfunded Equipment

17 Of the estimated £15-20bn acquisition cost, £11-14bn is assigned for replacement of the submarines, along with £2-3bn associated with the warhead and £2-3bn for supporting infrastructure. See MoD & FCO, The Future of the UnitedKingdom’s Nuclear Deterrent, Op. Cit., p.26.18 See Jeremy Blackham and Gwyn Prins, ‘The Royal Navy at the Brink’, RUSI Journal, (Vol. 152 No. 2, April 2007),pp.10-16.

Cost Comparison

Comparing the costs of national submarine programmes is an inherently imprecise task.Costing is complicated by differing levels of Government-furnished equipment such as thenuclear propulsion plant (the cost of which may not appear in the submarine builder’s figures)and differing approaches to through-life support.

Published programme costs, including design and development, for the build of the first threeAstute class submarines are £3.6bn, with a unit cost in the region of £900m. In the US, theVirginia class SSN programme cost is cited as $90bn for a thirty-boat class, with a unit fund-ed cost of around $2.4bn dollars per hull.

The build of the French Barracuda class SSN, considerably smaller and likely to be less capa-ble than Astute or Virginia, is due to commence in 2007. The expected six-boat programmecost is €7.9bn, an average of €1.32bn per hull. The accuracy of this initial contract cost, as wellas the amount of Government furnished equipment, is unclear.

The UK SIB produces submarines to a very high standard, with greater capability than theirFrench equivalents and at lower cost than their US equivalents in spite of much smaller pro-duction runs.

Gavin Ireland

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Programme – Where Now?’ Regarding theAstute class submarine, the panel asked, ‘Dowe need more than three or four Astute sub-marines except to retain onshore expertise?And if not, should onshore expertise be fund-ed from the defence budget?’19 Although thepanel conceded that their recommendations‘would make the Defence Industrial Strategyno more easy to implement nor would [they]shore up the viability of a British onshoredefence industry’,20 their difficult questionsdemand an answer. With the defence budgetunder severe strain in the coming years, thereis every need to justify the cost of procuringand operating nuclear submarines in the con-text of their importance to UK defence andsecurity.

Why Submarines?The value of the SSN has been debated atlength since the end of the Cold War. In theCold War itself, the principal role of theRoyal Navy’s SSNs was clear – Anti-Submarine Warfare (ASW) operations con-ducted largely in the North Atlantic againstthe threat of Soviet SSNs and SSBNs. TheSSN has long been considered peerless in theASW role; with UK submarines being opti-mized for stealth and crewed to exactingstandards, the Royal Navy’s SSNs provided aformidable capability in this vital role. In alargely unsung additional role, SSNs alsocontributed to strategic surveillance ofpotential adversaries, a role which continuestoday across the globe.

By the time of the 1998 SDR, the role ofthe SSN was in transition. With the Russiansubmarine threat almost absent, a reductionfrom twelve to ten SSNs was deemed suffi-cient to meet future requirements. SDR also

announced that all of the SSNs would be fitted with the Tomahawk Land AttackMissile (TLAM), rather than the seven boatsthat were previously planned to have thatcapability.21 This marked the shift from theSSN as primarily an ASW asset, to a swing-role platform able to conduct strategic coer-cion with the most capable deep strikeweapon system in the UK inventory.However, this expanded scope placed its owndemand on force levels – the planning exercis-es behind SDR indicated a requirement for asmany as fourteen boats, but economy dictat-ed the lower number.

In addition to land attack, other long-standing capabilities of the SSN – principallyIntelligence, Surveillance and Reconnaissance(ISR), but including delivery of Special Forces(SF), and Anti-Surface Warfare (ASuW) andother elements of sea control and denial –began to assume primacy in SSN operations.By 2003, and following MoD’s publication ofthe White Paper Delivering Security in aChanging World, the SSN force was reducedto eight, even as the demands on the flotillaincreased. Submarine operations in theKosovo campaign of 1999, Afghanistan in2001 and Iraq in 2003 demonstrated the ver-satility of the SSN, with boats involved inTLAM strikes, ISR duties and ASW. In the2001 strikes on Afghanistan, one Tomahawk-equipped SSN was able to transit from exercis-es off Iceland to its firing position in the NorthArabian Sea within twenty-one days, a jour-ney of some 8,000 miles which no other typeof vessel could have completed as quickly.

The official stance on the SSN forcelevel remains that, subject to affordability, theforce level may number up to eight hulls.22 Itis now widely assumed, however, that a max-imum of seven Astute class boats only will be

19 John Weston et al, ‘The Underfunded Equipment Programme – Where Now?’, RUSI Defence Systems, (Vol. 9, No. 3,Spring 2007), p.27.20 Ibid., p.27.21 MoD, Strategic Defence Review, Presented to Parliament by the Secretary of State for Defence by Command of HerMajesty, July 1998, paragraph 141.22 MoD, Defence Industrial Strategy, Op. Cit. p.68.


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built before the construction of SSBN-F.23 Asthe Swiftsure and Trafalgar classes retire, theresult would be seven Astute class boats tocompose the SSN flotilla, the maintenanceand support implications of which will bediscussed in due course.

In sum, the capability requirement out-lined in SDR has not fundamentally alteredand has not been officially updated in subse-quent defence White Papers. Bearing this inmind, the force level has decreased fromtwelve to eight, with seven likely to be the defacto force level in the near future. Under cur-rent policy assumptions of their use, thiswould most likely be the minimum sustain-able level for the British SSN flotilla.

The vision for equipping the Royal Navy wasoutlined in DIS:

The force will have the ability to deliver and sustain afull range of missions: from small highly focussed inter-ventions with Special Forces, to large, high intensitycoalition operations, securing key influence in the process.This versatile maritime force will be capable of winningsafe theatre entry for the deployment of joint forces.24

The SSN is central to each of these missions.As a covert platform, the SSN is ideally suitedfor SF insertion and recovery, a capabilitythat will be substantially improved with theintroduction of the Astute class. The SSNalso remains peerless in its ability to arrive onstation long before other maritime units,operating independently of supportingforces and air cover, and providing optionsfor covert or overt access and effect. It is this‘variable visibility poise’ which makes theSSN so valuable to politicians in the earlystages of a crisis and may even avert a crisis

developing in the first place. In its intelli-gence gathering role, the SSN offers a widerange of options and can remain undetectedon station for prolonged periods of time,unlike airborne or more visible surfaceassets. The ability to provide an indicatorsand warning (IAW) capability, in concertwith the intrinsic ASW and ASuW ability ofthe SSN, provides assurance of theatre entryfor the rest of the fleet.

Whilst there is no direct state competi-tor today, who can be identified as an overtlyhostile submarine force, in any deployment ofRoyal Navy surface ships near a conventionalsubmarine’s area of operations, there is con-siderable risk to the surface fleet. It is notinaccurate to say that even a poorly handledsubmarine is a threat, as was seen in the Adriaticduring NATO’s 1999 Kosovo intervention,where the Serbs’ solitary, decrepit Sava-classsubmarine was sufficient to keep most alliedforces outside the Adriatic and required thetasking of Royal Navy and other coalition SSNswith ensuring it did not put to sea. The factthat ASW has been de-prioritized in the sur-face fleet makes the SSN all the more valu-able as an integral part of fleet operations.

Twenty-five years ago, the Falklandsconflict demonstrated the potency of thesubmarine, not just in the sinking of theGeneral Belgrano by HMS Conqueror – anattack which precipitated the withdrawal ofthe Argentine fleet for the remainder of theconflict. The announcement, in the immedi-ate aftermath of the Argentine invasion thatBritish SSNs were on station prompted theArgentine command to re-supply their inva-sion force by air rather than sea, greatly slow-ing their progress.25 A topical issue is the

23 This was confirmed in a solicitation for supply of electro-optical visual systems by BAE Systems for later Astuteclass builds, reported in April 2007, which stated, ‘The programme will include options for fixed support periods foreach of the second batch of Astute class vessels (up to four new-build hulls)…’. Three Astute boats are already inbuild. (See: Richard Scott, ‘BAE Systems Eyes Future Submarine Visuals’, Jane’s Navy International, 1 May 2007).24 MoD, Defence Industrial Strategy, Op. Cit., p.68.25 The Government’s announcement was supported by reports of HMS Superb sailing towards the South Atlantic.Superb actually sailed north from Gibraltar to Faslane, and British SSNs did not arrive on station in the South Atlanticuntil ten days after the invasion. However, the use of such effective disinformation was possible only because of thecovert nature of the platform.

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SSNs in Controlling – and Denying – the Use of the Sea

The use of the sea – and the benefits delivered by submarines as they use the sea – in supportof national policy is not widely understood. The UK’s Military Tasks are roles assigned by theGovernment to the UK’s Armed Forces to ensure the peacetime security of the UK and itsdependent territories, to ensure against major external threats, and to contribute to the UK’swider interests through the maintenance of international peace and stability. The use of mar-itime forces, and submarines in particular, to control the sea is fundamental to the executionof the Military Tasks.

Sea control is defined in BR1806: British Maritime Doctrine as ‘the condition that exists whenone has freedom of action to use an area of the sea for one’s own purposes for a period oftime and, if necessary, deny its use to an opponent. Sea control includes the airspace abovethe surface and the water volume and seabed below.’ BR1806 adds that ‘[t]here is likely to bea requirement for sea control across the spectrum of conflict.’ Sea control also concerns deny-ing the use – and control – of the sea to the other side.

Controlling and denying the use of the sea to an adversary enables operations at and from thesea. It generates freedom of action regardless of the wider security situation; permits accessinto theatre and onto target; allows the protection of forces, Sea Lines of Communication(SLoCs) and trade; and supports policy and other means of influence in both combat and non-combat contexts.

Today, the increasing use of the sea makes controlling and denying its use – and the role ofsubmarines therein – remains fundamentally important for several reasons:

• Over 90 per cent of the world’s trade moves by sea, and Britain remains a net importerof major energy resources. Access to – and protection of - SLoCs and maritime chokepoints remains necessary.

• The effective execution of most expeditionary military operations requires the controlof the sea. Expeditionary military operations are likely to be vulnerable without sea con-trol.

• Potential adversaries are using the sea more regularly as a means of moving personneland material, and as a base from which to mount attacks ashore or as a target in its ownright.

One major threat to effective sea control is the submarine. Submarines can deny the use ofSLoCs or access to choke points. All elements of a maritime force contribute to offsetting thisthreat and to the securing of sea control. Surface forces, helicopters, maritime patrol aircraftand submarines come together to provide several layers of capability. A submarine, however,has particularly valuable uses because it is covert, agile, has great reach, and deploys a power-ful set of weapons and sensors.

The ability to control the sea is a requirement for a navy and a nation which wishes to have aglobal presence. The simple decision to develop or retain a submarine capability is in itself adeterrent to others seeking a capability to challenge sea control, and to exploit decisive nodesof vulnerability which would otherwise exist in an expeditionary operational plan.

Dr Lee Willett, Head, Maritime Studies Programme, Royal United Services Institute


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assertion by some analysts that if theFalklands were invaded by Argentina today,Britain could not mount an operation to lib-erate them as it did in 1982. Largely neglect-ed is the fact that the capability upgrades tothe SSN flotilla ensure that a Royal NavyTask Force could prove extremely effectiveagainst Argentine naval forces, and couldattack military targets on the Argentinemainland – a capability absent twenty-fiveyears ago.

The persistent intelligence-gatheringability of a covertly-deployed SSN invisible topotential adversaries continues to be ofdirect relevance to UK defence and security.Without the capabilities of the submarine,the situational awareness, flexibility andoffensive and defensive ability of a naval forcewould be severely reduced. Constraint of anaval force’s operations may lead directly toconstraints on defence, security and broaderforeign policies. Without the SSN, the RoyalNavy and the UK’s maritime defence capabil-ity would be greatly diminished indeed.

Whither Submarines?In spite of their versatility, the future ofnuclear powered submarines within UKoperations is by no means certain. While theroles currently performed by the SSN willendure and while others may return toprominence, the advance of technology –both in unmanned systems and non-nuclearpropulsion – may eventually force some crit-ical decisions on the future of naval nuclearpower.

For the near to medium-term, nuclearpower has significant advantages in terms ofsustained operation, high transit speed anddived endurance. These qualities are particu-larly relevant in a variety of theatres, forexample in Arctic operations, as seen in therecent ICEX 2007 exercise.26 Indeed, the

importance of UK submarines in that partic-ular environment may be set to increase. Anumber of studies have concluded that theArctic ice cap will be vastly reduced in scaleover the next thirty to fifty years, introducingnew opportunities for global trade to passover the pole and avoid the lengthy diver-sions via the Suez and Panama canals, both ofwhich are already struggling to matchdemand for transit of container and oil carry-ing vessels. Should the Arctic become aviable and desirable shipping route, the taskof assuring sea control through the Arctic,across the Greenland-Iceland-UK (GIUK) gapand across the North Atlantic would returnto prominence.

Expanding roles would develop along-side the existing roles of the SSN, but thereis no guarantee that the SSN will endure inthe face of increasingly advanced diesel-electric submarines (SSKs). Air independentpropulsion and fuel cell technology haveadvanced greatly in the past decade andwith the automotive industry increasinglyfocusing on the latter, it is possible that bythe time HMS Astute decommissions in thelate 2030s, her replacement may not benuclear powered. In some quarters, theexpectation is that fuel cell-equipped SSKswill soon be able to match SSNs in everyperformance area with the notable excep-tions of sustained high-speed transit anddived endurance. However, the ability tocombine reach, speed and endurance isunique to nuclear powered submarines andremains of high importance to the flexibilityof the Royal Navy, particularly in light of asmaller flotilla. Any curtailment of thiscapability would have to be justified by achange in the doctrine of British submarineoperations and a possible increase in forcelevels. There would almost inevitably besome compromise in capability, but thisoption demands consideration by industry

26 ICEX 2007 was an Arctic warfare exercise conducted by HMS Tireless and the US Navy’s Los Angeles class SSN USSAlexandria in March and April 2007. The main purpose of the exercise was to conduct ‘joint classified testing on sub-marine operability and warfighting capabilities’ as well as to enable scientific assessment of the polar ice cap.

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and MoD, even though its realization maybe decades away.

There is considerable merit in lookingseveral decades hence given the developmenttimescale for current submarines. Submarineprogrammes typically take a minimum of fif-teen years from inception to in-service and,as discussed in due course, a seventeen yeartimescale for SSBN-F presents serious chal-lenges for industry and MoD.

Returning to a near-term view, whileSSBN-F remains the most significant pro-gramme for the future of the industry, inter-vening boats in the Astute class are intendedto de-risk the technology and contractingpractices to be used in the SSBN programme.

In seeking to reduce the costs of AstuteBoats Four+, the necessarily rigorous studiesby MoD and industry have tackled the ques-tion of performance, with questions beingraised as to whether the level of performancebuilt into UK SSNs could in any way bereduced without significant impairment oftheir mission. In some quarters, there is aperception that current submarines are to anextent ‘gold plated’, in that they encompassthe highest of standards for capability,design, build and maintenance, and that thiscould in some cases be safely reduced inorder to reduce cost without sacrificing oper-ational utility.

There is considerable resistance to thissuggestion on two principal grounds. Thefirst is the role of UK submarines and the factthat they must potentially operate againsthighly advanced adversaries in the unforgiv-ing underwater environment. British sub-marines are regarded as amongst the finest inany navy, and the demands placed on themare reflected in their level of performance.Measures to reduce cost may risk compro-mising the flexibility and performance of theboats at the time when they are arguablyrequired to be more flexible, given reducedforce levels and predicted emerging threats

over their twenty-five to thirty year servicelives.

The intrinsic overhead cost of buildingand supporting submarines also means that areduction in performance would save a dis-proportionately small amount of money.The indications are that in consciously pursu-ing a smaller, cheaper SSN in the newBarracuda class, the French Navy haveaccepted certain compromises in the areaswhere an SSN holds its greatest advantages.At present, the MoD is not prepared to dothe same and, similar to a potential move toSSKs, a cost-inspired reduction in perfor-mance would have to be preceded by areview of submarine doctrine and accep-tance of the potential military and policyimplications.

The second concern is centred on theidea of better technology taking the place ofequipment redundancy. Safety on a nuclearsubmarine is paramount; the DevonshireDock Hall where the Astute class is con-structed is adorned with giant bannersreminding the workforce that ‘lives dependon us doing our jobs right’. This simple dic-tum is adhered to across the submarineenterprise and its value can be seen in therecent fatal accident onboard HMS Tireless,which could have escalated far beyond the tragic loss of two submariners.Commanding Officer Iain Breckenridge stat-ed, ‘It is a testament to the design, construc-tion and maintenance that despite this eventand the small fire that ensued, no seriousdamage was done’.27 In some cases,improved equipment performance may notoffer the same security as redundancy.Successfully resolving this difficult and high-ly emotive discussion will require close col-laboration and cultural understandingbetween MoD, the Royal Navy and industry.

Whilst there is reluctance to significant-ly reduce the performance of UK sub-marines, there is a widely acknowledged

27 ‘Arctic submarine blast ‘unique’’, BBC News, 2 April 2007<http://news.bbc.co.uk/1/hi/england/6517811.stm>, accessed April 2007.


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need to at least preserve the main perfor-mance requirements whilst greatly reducingcost. To this end, much of the hithertobespoke equipment on board the currentflotilla is gradually being replaced by com-mercial off-the-shelf (COTS) equipment.Whilst industry and the wider supply chaincan provide the innovation required to makeextensive use of COTS in the submarineenvironment, leadership from MoD will berequired to encourage the adoption of thistechnology. As discussed, much of the resis-tance to modifying the standards applied tosubmarine build and operation are based onvalid concerns of safety and capability.Nonetheless, there are likely to be areas inwhich innovation can be introduced withoutcompromising safety or performance. Insome of these cases, the existing defencestandards may need to be re-examined andmodified. The indications are that this isaccepted at the top-level of MoD’s subma-rine community but ensuring agreementthroughout the customer organization is justone of the leadership challenges facing MoD.

MoD LeadershipIn 2005, the RAND Corporation produced aseries of MoD-commissioned reports on theSIB, with the second report examining MoDroles and required technical resources.28 Thestudy began by acknowledging the drasticloss of MoD’s submarine expertise duringthe 1990s, and posited ways in which theGovernment could maximize its assets inmanaging future submarine design, buildand support.

The perceived need to reduce the over-head cost of MoD’s technical bureaucracy

was the driving factor in the loss of subma-rine technical expertise. Whilst the resultanthaemorrhaging of talent is now acknowl-edged as a mistake, the desire to streamlineMoD’s procurement and support infrastruc-ture and staff remains. The challenge now isto place MoD’s assets at the points in theCADMID29 cycle where they can effect themost positive influence on submarine pro-curement and support. Industry’s view, asexpressed to the HCDC in late November2006, was that MoD ‘has a leading role in asolution, which involves major rationaliza-tion of organizations, facilities, programmesand processes’.30 In pursuit of a more effi-cient industrial base, there is a desire toreduce duplication of effort across industryand between industry and MoD and theprospect of through-life support increasinglybeing contracted to industry may prompt areshaping of MoD’s submarine community.The build sector has cited a need for greaterMoD involvement at the initial design stage,which may provide substantive work to sus-tain MoD technical capacity whilst reducingacquisition and through-life costs.31

To this end, Director GeneralSubmarines now has oversight of MoD’sSubmarine Support, Attack Submarines,Nuclear Propulsion, Nuclear Weapons,Strategic Systems, NATO Submarine Rescue,Nuclear Movements and Strategic OptionsIntegrated Project Teams (IPTs), as well asthe safety and commercial aspects of subma-rine procurement and support. Further inputis received from the Equipment IPTs (EIPTs),located within the Director General Shipsorganization, such as Marine AuxiliarySystems, Marine Electrical Systems andNaval Electronic Warfare. A significant struc-

28 RAND Europe, The United Kingdom’s Nuclear Submarine Industrial Base, Volume 2: Ministry of Defence Roles andRequired Technical Resources, 2005, available from <http://www.rand.org/pubs/monographs/MG326.2/>, accessedApril 2007.29 Introduced under the Smart Acquisition initiative, CADMID refers to the successive phases a defence programmemoves through – Concept, Assessment, Demonstration, Manufacture, In-service and Disposal.30 HCDC, The Future of the United Kingdom’s Strategic Nuclear Deterrent, Op. Cit., p.26.31 Ibid.

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tural change is occurring with the move toclass-based support arrangements for the sur-face fleet, which is gradually moving surface-fleet staff out of the EIPTs. This depopula-tion may eventually result in the EIPTs beingincreasingly focused on submarine require-ments.

The work on pricing of Astute BoatsTwo and Three was criticized by the HCDCfor placing MoD at unlimited financial riskuntil pricing was completed.32 Although theCommittee’s view was understandable andentirely appropriate given its remit, theHCDC did neglect the positive impact thatthe collaborative pricing has had on MoD-industry relations. Through the work con-ducted between the MoD’s Pricing andForecasting Group (PFG) and BAE SystemsSubmarine Solutions, MoD has gained visi-bility of the cost drivers and overheads of theprime contractor’s business, while BAESystems similarly has benefited from under-standing MoD’s funding constraints and thewider political context. It is of vital impor-tance that this openness is sustained andexpanded across the industry. If the reform ofthe industrial landscape sought by DIS is tobe achieved, MoD will have to maintain abroad understanding of how the key suppli-ers interact, as well as the cost drivers whicheach supplier faces individually. The idealresult would be a consolidated view of theindustrial base that accommodates thedemands of each supplier within the broaderrequirement for reforms that prioritize long-term sustainability over short-term commer-cial gain.

In tackling the commercial challengeswithin the industry, it is vital that theGovernment understands some of the pres-sures facing the companies within the SIB.Rolls-Royce derives only £250m of its £7.3bn

turnover from its submarine operations,while as recently as 2004 BAE Systems wasconsidering the sale of its submarine busi-ness as non-core activity.33 For companieswhose business is expanding in other mar-kets, there is a risk that the submarine-relatedbusiness units will face growing pressure toincrease margins and contribute more rev-enue to the group, a target somewhat at oddswith the collaborative approach being soughtin the SIB. Similarly, Alstom, manufacturer ofthe turbines for UK submarines, cite the sub-marine industry as non-core to their busi-ness.34 In each of these cases, it is importantfor MoD (and wider Government) to under-stand the sometimes tense relationshipbetween the overall corporate entities andtheir specialist business units who contributeto the SIB. Aside from providing a predictableworkload for industry to plan towards, thereis a need for ongoing engagement betweenMoD, wider Government (notably theDepartment of Trade and Industry [DTI]and the Treasury) and the corporate entitiesthat contain the companies within the SIB.

Babcock’s recent acquisition of DMLhas presented the MoD with challenges andopportunities as it seeks to implement theprinciples of DIS. The consolidation of sub-marine support and the management of thetwo current submarine base ports by onecompany is certainly in line with DIS andought to achieve gains in efficiency. Althoughthe division of the support sector underBabcock and build under BAE Systemswould appear to contradict the DIS aim of a‘single industrial entity’ covering build andsupport, cohesion may still be achieved if thelong-term value of MoD-industry partneringcan be firmly established. However, the riskof competition replacing collaborationremains, and MoD’s role in managing the

32 HCDC, Defence Procurement 2006, Op. Cit., p.19.33 ‘BAE shares rise after sales talk’, BBC News, 26 April 2004, <http://news.bbc.co.uk/1/hi/business/3660139.stm>,accessed April 2007.34 Jim Morrison (Unit Managing Director, Alstom Power Steam Turbine Retrofits UK), HCDC, The Future of theUnited Kingdom’s Strategic Nuclear Deterrent, Op. Cit. Ev.3.


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ongoing relationship between the companiesof the SIB will be of vital importance.

The Design and Build SectorEvery significant study on the SIB has soughtto define how unique this particular trade is.Defence economist Professor Keith Hartleysummarizes the SIB as:

a unique UK defence industry in that it produces oneproduct for a single buyer (there are no exports) and itcomprises a small number of highly specialized facili-ties … Critical skills and facilities needed for nuclearsubmarines comprise design staff with submarineexpertise; nuclear site licenses for the [nuclear reactor]core facility, for construction and for re-fit; and highlyspecialized industrial facilities which have no alterna-tive use … The need for nuclear site licences imposesmajor barriers to new entry, competition and interna-tional collaboration.35

Although the complexity of nuclear subma-rine building was repeatedly emphasizedduring the Trident renewal debate, thereremains a very poor understanding of whatthis means in practice, most prominent inone analyst’s assessment that a ‘copy’ of theVanguard class could be constructed in fiveyears.36 Within the build sector, there isalready an awareness that seventeen years todesign, build and commission a new class ofSSBN – particularly one that is required to besubstantially cheaper to support – is a sternchallenge for an industry only recently recov-ered from the crisis days of the Astute pro-gramme up to 2003.

The submarine design and build sectoris concentrated on BAE Systems’ Barrow-in-Furness shipyard but encompasses the com-pany’s combat systems sites at Farnborough,Ash Vale and Weymouth as well as a supplybase distributed across the United Kingdom,

including the specialist design and manufac-ture conducted by a range of first tier suppli-ers. Foremost among these are Rolls-RoyceSubmarines (who produce and support thenuclear steam raising plant, or NSRP, fromtheir facility in Derby), Weir, Strachan &Henshaw (who provide the weapons han-dling and launch systems, or WHLS) andMacTaggart Scott (suppliers of non-hull pen-etrating masts).

Whilst the future requirement ofSSBN-F remains important, the immediatepriority is cost reduction for the remainingAstute class boats. At the time of writing, thecontract price for Astute Boats Two andThree is finally being agreed between theMoD and BAES. Once complete, this willenable orders for submarine hulls in duecourse. MoD’s announcement, on 21st May2007, of a contract for initial build work onBoat Four with final contracts expected inlate 2008, underscores MoD’s confidence inthe nature and structure of its relations withSIB.37 Whilst the current emphasis is beingplaced on reducing through-life costs, theremainder of the Astute programme will besubject to demanding unit cost reduction tar-gets, cited as 30 per cent on Boat Four and 45per cent by Boat Six, requiring continualimprovement across the programme.38

The tiered approach to cost reduction ismatched in certain areas by innovativeapproaches to spiral development. TheMoD-industry combat systems ‘rainbowteam’ at BAE Systems’ Ash Vale facility is anexample.39 The thirty-strong team comprisesthe principal suppliers – BAE Systems,Thales, Insyte and Qinetiq – as well as arange of Small and Medium Enterprises(SMEs) and members of the AttackSubmarines IPT (ASMIPT). The rainbow

35 Keith Hartley, ‘The Economics of UK Nuclear Weapons Policy’, International Affairs, (Vol.82 No.4, July 2006),pp.682-683.36 Paul Ingram, ‘Decisions over the future of British Nuclear Weapons’, BASIC Green Paper, British AmericanSecurity Information Council, December 2006, p.6.37 MoD. ‘Royal Navy to get New Attack Submarine’, Press Release 102/2007, 21 May 2007.38 ‘Team aids affordable sub drive’, Wavelength – News for BAE Systems Naval Businesses, Sep/Oct 2006, p.7.39 Ibid.

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team approach has been able to identify costsavings which exceed the 30 per cent costreduction target by 10 per cent. The re-design for Boat Four involves a COTS-basedsolution of common equipment cabinets,operator consoles and processing technolo-gy, with further advances into open-architec-ture systems planned for Boat Six onwards.The benefits are to be developed across theAstute build programme with some ele-ments cascaded down to the first three boatsin the class as well as the Trafalgar andVanguard classes, with the end goal of a com-mon flotilla-wide combat systems architec-ture. The collaborative approach is formal-ized by a team charter, binding the partici-pants to technical data sharing and commongoals.40 Whilst the application of this princi-ple to the wider industry is a more complextask, the rainbow team approach suggeststhat closer collaboration can increase afford-ability and guarantee future orders.

The pursuit of innovative ways ofreducing cost and improving performancehas a broader aim: to maintain the designskills necessary to integrate a product ascomplex as a nuclear submarine. Severalcommentators and industrialists have citedthe problem of a ‘skills gap’, where a lack ofchallenging work leads to atrophy of designand manufacturing skills either through lackof practice or staff leaving the business.Recently there has been a tendency for thisnotion to be scoffed at as industrial lobbyingfor the sake of filling the order book. Whilstoften discussed, what is the actual impact ofa ‘skills gap’ and how can it be mitigated?

The submarine sector has recent experi-ence of what a gap in design and build effortscan involve. A case in point is the Upholderclass conventional submarine (SSK), now inservice with Canada as the Victoria class.

While the build of the first-of-class at Barrowwent largely according to plan, Cammell-Laird, responsible for constructing the finalthree boats, had moved from construction ofmajor surface vessels to building an SSK soadvanced that it was likened to ‘an SSN with-out the reactor’.41 The gap from the Merseyyard’s previous submarine build was sometwenty years, apparently long enough for thetacit knowledge accumulated in the produc-tion workforce to have been lost. This wascompounded when Cammell-Laird strug-gled to recruit experienced welders andaccordingly suffered quality control prob-lems. Having estimated a build time of fourto four-and-a-half years, the Cammell-Lairdboats ranged from five-and-a-half to over sixyears between contract award and delivery.42

More recently, Rolls-Royce Submarineshas experienced the impact of a skills gap inits production workforce, one which tookthree years and £8m to bridge. Rolls-Royce’sexperience suggests that the crucial areasaffected are manufacture and build, ratherthan concept and assessment. It is often theapplication of knowledge to physical produc-tion that poses the greatest challenge, in thiscase knowledge of materials and chemistrybeing particularly critical. Without sufficientquality in initial production of a nuclear sub-marine, very costly problems may arise manyyears later, meaning that quality from theoutset is of vital importance. In turn, thisrequires a high level of technical skill that isdifficult to maintain without substantive newwork. Ultimately, the potential impact of askills gap has to be quantified in terms of riskto the project. Quite simply, the longer askills gap exists the greater the potentialimpact on schedule, cost and performance. IfSSBN-F is assumed to be the next majordesign effort, it is apparent that the opera-

40 Ibid.41 Comment received in author’s conversations with individuals involved in the design and operation of theUpholder/Victoria class.42 Keith Hartley, The UK Submarine Industrial Base: An Economics Perspective, available from<http://www.york.ac.uk/depts/econ/documents/research/uksib.pdf>, accessed April 2007.


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tional demands on the national nucleardeterrent cannot be compromised because alack of design skills fifteen years previouslybuilt an unmanageable level of risk into theproject.

At an operational level, the means ofpreventing a skills gap depends on maintain-ing a workload sufficient to exercise the abil-ities of engineering and production staffwhilst planning for the succession of skilledindividuals. The latter activity has long sincebeen implemented in the industry, but it iscontingent on sufficient new work so thatdesigners can learn their skills throughoutthe whole development cycle of a product orsystem. To some extent, it could be arguedthat the problem is overstated, given thatmuch of the equipment is only slightlyevolved from one class of submarines to thenext. This, however, would be to ignore thefact that the design of any new submarine isa challenging task by virtue of the density ofequipment contained within the pressurehull. This is a space in which nearly 100 menmust live and work alongside a highlyadvanced nuclear propulsion plant, severaltons of high explosives – and, in the case ofan SSBN, nuclear warheads – and surround-ed by high-energy electrical and mechanicalsystems, all whilst submerged for months ata time. The complexity of the systemsrequired to support this means that a changeto one system can have a substantial impacton multiple separate systems across the boat,all of which demands a level of systems inte-gration skill that can only be practiced bynew design work.

Following Parliament’s vote in supportof retaining the nuclear deterrent, the con-cept phase for SSBN-F will extend over 2007and 2008, indicating that a skills gap has beenaverted by the decision to renew the deter-rent. However, the manner in which designprogresses after the concept phase will be

contingent upon MoD clearly establishing itspriorities relating to the level of innovationrequired, the location of Design Authoritybetween customer and prime contractor andthe incentives for the build sector to designfor through-life cost reduction. The meansby which this is to be achieved are unclear atpresent, but may include a mechanism wheresavings realized by one principal companywithin the enterprise are distributed amongstall. The difficulty of establishing the bound-aries of such an initiative are obvious in anindustry as interdependent as this, butarguably the level of contractual risk (whichmay take into account aspects such as themaintenance of a nuclear site license) couldbe used as a yardstick to determine whichcompanies fall within such a collaborativearrangement. The differing levels of profitmargin across the principal companies alsopresents a challenge, particularly in the con-text of their contribution to wider corporateentities as discussed above. A recent reportby PriceWaterhouseCoopers stated that,‘Our analysis shows that successful lower-tiersuppliers can be significantly more profitablethan the primes, due in part to their ability tocapture the value of specific proprietarytechnology and, in some cases, the associatedaftermarket’.43 This is certainly the case inthe SIB, where the unique technology anddemands of sovereign supply lead to numer-ous companies being monopoly suppliers.On a larger scale, Babcock’s acquisition ofDML arguably has provided BAE Systemswith a near-peer competitor in the subma-rine and ship support market. It remains tobe seen whether these companies (the headsof the submarine build and support sectors)will agree an LTCA enabling a through lifeapproach to delivering UK submarines.Whilst increasing profit margins makes busi-ness sense, the need for long-term collabora-tion in the SIB dictates that some commercial

43 ‘Flying High: Aerospace and Defence M&A’, PriceWaterhouseCoopers, London, 2007,<http://www.pwc.com/extweb/pwcpublications.nsf/docid/ABA0DE44AF1CE2BA852572B2000E82B3/$File/fly-ing_high.pdf>, accessed April 2007.

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gain may have to be sacrificed by individualcompanies for the good of the industry.Developing a culture where this can occur isa long-term challenge for the Governmentand industry alike.

International CollaborationBeyond domestic collaboration, the designand build sector has a real opportunity tobenefit from international collaboration,almost entirely with the United States.44 TheUS submarine build programme, devoted atpresent to the Virginia-class SSN, faces a sim-ilar long-term challenge to the UK SIB. TheUS programme is committed to reducing thebuild cost of the each Virginia-class boat to$2bn by 2012, from a current level of$2.4bn.45 Although the US historically has beenmore willing to sell than collaborate in sub-marine technology (possibly because ofpolitical and economic reluctance to exposeits indigenous industry to external competi-tion), the pressures on each country’s subma-rine programme may foster greater opennessfrom the US. As with Astute, Virginia suf-fered early in its build from insufficientlymature design information, and the US Navyis already aware that such a situation must beavoided in future procurement. Aside fromVirginia, the US expects to build a new SSBNin time for deployment around 2029, whichmeans that US involvement in Britain’s SSBN-F programme could progress the maturity ofUS design practices in advance of a firmorder for their next SSBN. Assuming US will-ingness (strong in the Navy and industry, butpotentially limited by Congressional opposi-

tion to technology transfer), it is up to Britain’sSIB and MoD to decide the appropriate levelof collaboration, particularly given that theUK programme must not become merely ade-risking exercise for its US counterpart.

Collaboration to maintain expertise,rather than direct supply of parts and sys-tems, appears to offer the greatest potentialbenefit for the UK SIB, as identified in MoD’sDefence Technology Strategy (DTS).46

Despite the currently favourable exchangerate, past experience suggests that on a like-for-like basis, the US is a more expensiveplace to acquire material and technologythan the UK or Europe. Collaboration couldalso hold great significance from the level ofoverall transatlantic relations, to the specificworking practices and technologies involvedin submarine construction. The US pro-gramme is well advanced in terms of reduc-ing unit cost by innovative build strategy,developments which have aided the Astuteprogramme since 2003 through industrial co-operation between BAE Systems and US sub-marine builders Electric Boat. Furthermore,the US approach to open-architecture com-bat systems offers a valuable reference pointas MoD seeks a similar solution, and workswith a part of the industry that has historical-ly tended to develop complex, bespoke com-bat systems of closed-architecture. The will-ingness of the US to share their combat sys-tems expertise has recently been demonstrat-ed in the Replacement Combat System (RCS)programme for the Australian Collins classSSK which involved ‘unprecedented access toUS technology and capability’47 through col-laborative work since 2001. However, it must

44 Whilst some measure of dialogue on supply chain fragility has occurred with France, further co-operation is pre-cluded largely by the terms of US-UK co-operation defined by the 1958 Mutual Defence Agreement (MDA) on theuse of nuclear technology for defence purposes, but also by both nations’ broader desire to remain strategically inde-pendent of each other for their deterrent capability in particular. As one British official commented to the author,‘we can only be in bed with one partner at a time’. 45 United States Government Accountability Office, Report to Congressional Committees, Defense Acquisitions:Assessments of Selected Weapons Programs, GAO-07-406SP, Washington, March 2007.46 MoD, Defence Technology Strategy, October 2006.47 Prime Minister of Australia Media Release, ‘HMAS Waller – Replacement Combat System’, 3 April 2007,<http://www.pm.gov.au/media/Release/2007/Media_Release24232.cfm>, Accessed April 2007.


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be noted that there is a gap between US will-ingness to sell their systems and componentsand the truly collaborative sharing of expertisethat would be beneficial to both countries.

With the UK SIB under pressure todeliver highly capable, yet affordable sub-marines, and with the US programme taskedwith cost-reduction and de-risking of newtechnology, there is real potential in furthercollaboration on both the state-to-state andbusiness-to-business levels.

The Support SectorThe balance between unit-cost and through-life cost reduction is perhaps the most press-ing issue facing the submarine industry as itmoves forward, but the results will not be-come fully apparent for a number of years.For the moment, the support sector has otherchallenges – rationalizing the facilities involvedand ensuring that the Navy can generate therequired force levels from a smaller flotilla.

The submarine support sector is cen-tred on the re-fit and nuclear fuel handlingfacilities of the Devonport Royal Dockyard,now owned by Babcock, who also operatethe Faslane submarine base in a partneringagreement with MoD. The business of sub-marine support is principally dividedbetween Rolls-Royce, Babcock and BAESystems, along with the Submarine SupportManagement Group (SSMG) (a joint venturebetween DML, BMT and SEA).

StructureBabcock’s recent acquisition of DML has dra-matically re-shaped the support sector.When the bids for DML sale were invited,BAE Systems was widely expected to acquireDML and consolidate both build and supportunder one BAE-led construct, thereby ratio-nalizing the SIB in line with the principles ofDIS. Due to perceived concerns at theprospect of a BAES monopoly across the UKSIB, MoD sought to ensure that BAES part-nered with another group, with possible

partners being private equity firm Carlyle,Rolls-Royce and Babcock International. Withthe favoured route seemingly being a jointventure ( JV) designed to place the Barrow-in-Furness build facility and Devonport supportfacility in one company, BAE Systems and itspotential partners were unable to agree com-mercial terms. BAES subsequently declinedto submit a final bid, leaving Babcock tofinalize its winning bid.

Babcock already operates the Faslanesubmarine base under a £875m public-privatepartnership (PPP) contract with the MoD.The recent extension of this contract to 2013was perhaps indicative of the disjointedapproach taken by the DLO and DPA as theywere at the time, but while this was seen insome quarters as miscommunication, thefocus on consolidation being promoted byDirector General Submarines should ensurethat any further contracts for submarine sup-port are let as part of a cohesive scheme inwhich Babcock will be the principal player.Although Babcock’s capabilities will beexpanded by the DML acquisition, the com-pany will nonetheless need to engage itsindustrial partners in future support work. Itremains to be seen just how collaborative thisapproach will be and, to a large extent, thesustainability of the SIB depends on its out-come.

FacilitiesBabcock is well-placed to expand on its oper-ations at Faslane, already set for developmentsince being designated as the sole UK subma-rine base once the Devonport-basedTrafalgar class retires in the late 2020s.Faslane is also likely to benefit from some ofthe £2-3bn earmarked for infrastructuremodernization for the renewed nucleardeterrent, which is likely to encompass mod-ernizing the centrepiece of the Faslane base,the shiplift capable of hauling the 16,000 tonVanguard boats from the water for mainte-nance. The view from some financial ana-lysts is that Faslane remains underutilised as

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a facility, and that programmes such as theRAMP48 of HMS Torbay at Faslane in 2007should mark a shift towards Faslane as a sub-marine maintenance facility. However, whilstthe expertise and facilities to conduct manyaspects of maintenance exist at Faslane, thedeep overhaul of submarines, as well as anyfuel handling activity, can only be conductedat Devonport. Furthermore, the use of theshiplift is heavily prioritized for the SSBNflotilla due to the demands of maintainingone boat continuously at sea, which limitsthe use of the facility for SSN maintenance.

Regarding the facilities which supportthe flotilla, MoD commented in June 2006that it is ‘open to proposals for alternativesites where there are economic, or other,advantages [but] given that significant invest-ment has already been sunk in various facili-ties around the country, it is difficult (but notimpossible) to construct a persuasive case tore-site the associated activities’.49 However,the terms of reference of the ongoing NavalBase Review all but specified that Devonportwill remain the centre for nuclear submarinere-fit50 and the anticipated savings fromBabcock’s operation of Rosyth, Devonportand Faslane should support this aim,although the expectation from financial ana-lysts is that Devonport could see substantialrationalization of facilities, staff and workingpractices in order to improve the efficiency ofsubmarine and surface ship support.Increased efficiency will be required to offsetthe decline in submarine refuelling work thatwill occur when the last of the Trafalgar andVanguard Boats complete their major over-hauls in the next decade. Clear decisions onthe structure of the SIB also will influencethe direction taken with regard to surface

ship build and support, with Rosyth andDevonport likely to take an increasingamount of work from Portsmouth. Decisionson submarine-related infrastructure cannotbe separated from wider questions of mar-itime industry rationalization that will needto be answered in the coming years. With theindustrial workload expected to decline fol-lowing construction of the Future AircraftCarrier (CVF), the Military Afloat Reach andSustainability (MARS) programme and thereplacement of the Type 22 and 23 frigates,at least one shipyard in the UK is likely tocease operating in the next decade.

ContractingThe introduction of Contracting forAvailability (CFA), effective in the fixed wingdomain through initiatives such as theATTAC Tornado support contract,51 facessignificant challenges in the submarinedomain. While French shipbuilder DCNclaims to operate its submarine support on aCFA basis, the actual operating structureappears little different from the way currentRoyal Navy submarines are supported, withavailability being achieved in terms of timelycompletion of re-fit rather than the contrac-tor being incentivized to achieve a certainlevel of availability or sea days per year.

The notion of providing a target level ofavailability would in theory be appealing to aflotilla that is under pressure to generate therequired number of hulls from a smallerforce. The reality, as so often with sub-marines, is rather more complicated. In com-parison to surface ships, submarines spend aconsiderably greater portion of their supporttime in deep upkeep (as opposed to fleet timeengineering), which greatly limits their state

48 The acronym RAMP stands for ‘Revalidation and Assisted Maintenance Period’. This is a nine- to twelve-month re-fit programme, part of which is conducted in dry dock, to conduct capability upgrades and certify the boat for con-tinued operation. Although the RAMP habitually has been conducted at the submarine’s home port, HMS Torbay willundergo her RAMP at Faslane rather than at Devonport, in order to spread the work load between the two bases.49 Richard Scott, ‘Can UK Submarine Industrial Base Retain Critical Mass?’, Op. Cit.50 MoD, Naval Base Review Terms of Reference, <http://www.mod.uk/NR/rdonlyres/B11F1691-A6BD-4973-97C2-44A2B9B8954D/0/20060803RNBRTLTORacq2Ver5_2_.pdf>, accessed April 2007.51 The acronym ATTAC stands for ‘Availability Transformation, Tornado Aircraft Contract’.


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of readiness. Furthermore, the overridingimperative of nuclear and platform safetyintroduces a higher level of caution than isthe case with surface ships. The reactor faultsdiscovered on HMS Tireless in 2000, whichtemporarily withdrew most of the flotillafrom service, demonstrate the level of con-tractual risk involved in support of nuclearsubmarines, which could be an impedimentto any privately financed CFA arrangement.Further to the safety aspects of the nuclearpropulsion plant, a submarine depends on ahigh level of safety assurance and redundan-cy in order to safely operate. The demandsthis would place on a commercial CFAarrangement could be sufficiently onerous todiscourage any contractor from taking onthe inherent risk at an affordable price. A sec-ond major impediment to CFA is the avail-ability of crews to man the submarine, as dis-cussed below in the context of Through-lifeCapability Management.

The closest approximation of CFA inthe UK SIB would appear to be Rolls-Royce’sproposed Flotilla Reactor Plant Support(FRPS) contract, which is expected to be con-cluded in mid-2007. FRPS is an incentivizedcontract for the support of the reactor plantsinstalled in the current flotilla and the forth-coming Astute class. Informed by Rolls-Royce’s experience with the Vulcan shoretest facility at Dounreay, the aim of FRPS isto reduce support costs and improve avail-ability of the flotilla’s reactor plants. Savingsrealized through the tiered incentives in theFRPS contract accrue to MoD and to Rolls-Royce. Whilst this would be expected inmost industries, the complex interfacesbetween MoD, Rolls-Royce, BAE Systemsand DML result in dispute over how the sav-ings from incentivized contracts should bedistributed. As discussed above in the contextof the design and build sector, the relativelevel of profit made by the principal compa-nies of the SIB remains a matter of con-tention within the industry.

Another important contract due to beconcluded in 2007 is the BAE Systems-led

Transforming Submarine Support - Design(TSS-D), due for Main Gate approval in late2007. This contract will consolidate technicalsupport for the Astute, Swiftsure, Trafalgarand Vanguard classes under a commonarrangement. At present, the latter threeclasses fall within the remit of SSMG. TheTSS-D contract is intended to replace SSMGfrom early 2008, and will implement a shift inculture from an ‘input-led’ system – as is thecase with SSMG – to an ‘output-led’approach where industry’s technical authori-ty is provided as a support service to MoD’sSubmarine Support Integrated Project Team(SUBIPT). The contract would see a BAESystems-led group become the TechnicalAuthority for the UK submarine classes, andtargets a shift from the support contractordelivering set work packages in line withMoD orders to the support contractor pro-viding qualitative technical analysis with a‘whole-boat’ view. A perceived disadvantageof the current SSMG construct is that it sep-arates materials supply from maintenanceactivity; suppliers interface with the EIPTsfor the former, and SSMG for the latter.Although TSS-D is based on provision oftechnical advice, the contract seeks to alignsuppliers with the waterfront support in amore direct manner. Ultimately, the intent isfor a supplier who provides materials andmaintenance support to deal with one orga-nization at all stages from initial design,through procurement, manufacture, installa-tion and support.

While it may be accommodated withina flotilla-wide support arrangement, theAstute class requires an altogether differentapproach to support, which will place newdemands on the sector. The principal differ-ence between support of previous classesand Astute is that the new SSNs will notrequire refuelling of the reactor core duringtheir lives. The Swiftsure, Trafalgar andVanguard classes have all required refuellingaround every twelve years of operation,whereas Astute’s Core H will last for thetwenty-five year design life of the boat.

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Astute is still planned to undergo major re-fittwice in twenty-five years, but these refits areplanned to be at one third and two-thirds ofservice life. Undoubtedly of benefit in cost,availability and environmental terms, thiswill place a premium on the nuclear safetyskills and facilities at Devonport, as the boatwill for the first time be undergoing an exten-sive re-fit with an active core onboard. Astuteis also expected to achieve a significantimprovement in availability over previousclasses. The requirement for this was definedat the outset of the programme in the late1990s, but has perhaps become even moresignificant given the smaller flotilla that theAstutes will operate within and eventuallycomprise. With a wide range of platformdesign changes, improved reactor perfor-mance and a programme of reliability-cen-tred maintenance, the expected increase isfrom 69 per cent availability on the Trafalgarclass to 75 per cent on the Astute class.52

The fragmented nature of the subma-rine support sector is due largely to the tur-bulent recent history of the UK’s maritimeindustry, but contracts such as TSS-D andFRPS promise to revitalize the support sectorand make more efficient use of industry andMoD’s skills. Nonetheless, there appears tobe greater conflict than the MoD would likewithin this sector of the SIB and it is unclearwhether this will extend to renewed compe-tition amongst the principal companies.Almost irrespective of the DML sale, the sup-port sector is where progress on the cultureand behaviour sought by DIS is perhaps thehardest to implement.

Bridging the Sector Gap – Through-LifeCapability ManagementIn assessing the manufacturing and skillsbase required to support a renewed nuclear

deterrent, the HCDC professed to being‘concerned that insufficient attention hasbeen given to the costs of through-life sup-port.’ The report continued:

While we understand that DML is not a supplier tothe Astute programme, it seems odd and regrettablethat the company responsible for through-life supporton the UK’s nuclear-powered submarines has had solittle input into the design of the class. If the afford-ability of the submarine programme is to improve, it isessential that through-life costs are taken into consid-eration at the initial design phase.53

While the entire SIB accepts the imperativeof reduced through-life cost, the trade-offsbetween unit cost and through-life support,due to a number of industrial and platform-specific factors, are uniquely challenging inthe submarine context, as illustrated in theAstute programme.

Particular new build techniques such asmodular build and vertical outfit,54 whichhave accelerated the Astute build and helpedbring the programme on track, may yet com-plicate the upkeep of the submarines oncethey are in service. The density of equipmentwithin any submarine is such that removaland replacement is exceptionally difficult,and the use of large modular structures mayintroduce further challenges to major refitactivity. On the other hand, access andremoval of equipment has been prioritized inthe Astute design, including enlarged hatchesand direct access to the main machineryspace via logistics and escape trunks.55

Although the support sector is now gainingbetter visibility of the design (and is broadlycontent that such issues are manageable) aslong as the structure of the industry and itscontracting strategies continue to divideresponsibility for build and support betweenseparate and competing entities, the prob-lems of building for through-life cost reduc-tion appear likely to continue.

52 HCDC, Defence Procurement 2006, Op. Cit., Ev.55.53 HCDC, The Future of the United Kingdom’s Strategic Nuclear Deterrent, Op. Cit., p.27.54 See Murray Easton, ‘Future Submarines’, RUSI Defence Systems, (Vol. 9, No. 2, Autumn 2006), p.45.55 HCDC, Defence Procurement 2006, Op. Cit., Ev55.


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Whilst the competing demands of buildand support are intrinsic to a through-lifeview, the TLCM concept goes much further,encompassing all of the Defence Lines ofDevelopment (DLoDs) – training, equip-ment, infrastructure, information, person-nel, logistics, organization, and concepts anddoctrine. Of particular relevance to a plat-form as technically advanced as a nuclearsubmarine is the performance of the crew,and their training and retention forms a keypart of the TLCM approach to submarines.Several submarine crew roles have alreadybeen identified as ‘pinch points’ by theNational Audit Office,56 and the manage-ment of career progression and shore timefor submarine crews is a critical activity forthe Royal Navy. Although the SSBNs havetwo full crews each in order to maintain therequired operating tempo, this is not yet thecase with the SSNs. The deployment patternfor the Royal Navy’s SSNs has changed great-ly from the regular North Atlantic operationsof the Cold War. SSNs increasingly aredeployed on much longer cruises for agreater proportion of the year, leading theNavy to conduct rotations of certain keyroles on the submarine at intermediate portcalls. Beyond a certain point, the benefits ofimproved hull availability can only be real-ized if dual crews are adopted for the SSNs,but this prospect remains unlikely due to theeven greater demand for recruitment andretention, as well as the increased through-life cost. Although improved hull availabilitypotentially places greater strain on crewing,it does have the potential benefit of hullsbeing available for dedicated training purpos-es, which is vital if British submarines are tobe crewed to the their normal high standard.Political consideration of the cost of operat-ing submarines ought to take into accountmanning and training requirements, ratherthan just the technical matters of hull avail-ability and capability.

For the design and build sector, there isa challenge to make submarines a more hab-itable environment for crews who, withreduced force levels and the resultant needfor greater hull availability, will spend longerperiods continually at sea. Surface ships suchas the Type 45 destroyer place great empha-sis on crew habitability, and while sub-mariners are traditionally seen as more stoicthan their surface counterparts, more spaceonboard will always be welcome. The train-ing requirements of an increased use ofCOTS technology, particularly for combatsystems, will also be carefully managed so asnot to complicate operator and maintainertraining across the flotilla.

COTS also presents a through-life chal-lenge in terms of managing capability inser-tion, but working practices already in placegive a high confidence that this aspect ofTLCM will be managed successfully. Theaforementioned combat systems rainbowteam, the success of the Swiftsure andTrafalgar-class upgrade programme, and theunity provided under the DG Submarinesorganization should ensure that capabilityinsertion maximizes the value derived fromthe flotilla. To an extent, the insertion ofimproved technology to the flotilla is depen-dent on a focused programme of R&T, also aconsideration of the TLCM approach.Particularly important is the need to de-risktechnology that may contribute to the suc-cess of the SSBN-F programme, which mayyet include a new reactor plant designed forthrough-life cost reduction and improvedsafety, as well as increased use of electricalactuation in place of hydraulic systems. Atruly funded and therefore focused approachto R&T has arguably been lacking since thestart of the Astute programme, but theprospect of SSBN-F should rectify this situa-tion. Central to the development of technol-ogy will be MoD’s Director EquipmentCapability (Underwater Effect) or DEC

56 HCDC, ‘Ministry of Defence Annual Report and Accounts 2005-06’, Second Report of Session 2006-07, December2006, HC 57, Ev 28.

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(UWE), who will ensure that balanced deci-sions on future capability are made.

The final stage in the CADMID cycle,disposal, also presents unique challenges inthe submarine context largely relating to thenuclear propulsion plant. Unlike the RoyalNavy’s surface ships, which may be refittedfor sale to a foreign navy, a nuclear subma-rine becomes a liability as soon as it is decom-missioned. The UK currently stores fourteendecommissioned nuclear submarines afloatat Rosyth and Devonport pending final dis-posal. The long-term intent, announced byEnvironment Minister David Miliband in2006, is to store irradiated material fromdecommissioned submarines in deep geolog-ical storage between 200m and 1000m under-ground. Despite the fact that current decom-missioning plans will exhaust the availableafloat storage capacity over the next ten tofifteen years, confirmation of a final storagesite is not anticipated for a number of years.An interim solution under the MoD’s ProjectISOLUS57 would see the bulk of the subma-rine’s structure dismantled for recycling andthe sealed reactor compartments (RCs)stored or packaged as waste. This initial workmay be conducted at the current storage sitesand could help to alleviate the shortfall inrefuelling work conducted at Devonport.The design and build sector is also placinggreater emphasis on disposal at the designstage, seeking innovative approaches toreduce the amount of metal cutting involvedin removing the irradiated RC.

Threats and OpportunitiesThe recent HCDC hearings highlighted thatthe prolonged technical effort of designing,building and supporting nuclear submarineswas subject to the retention of key skills

within the industry. The committee also con-sidered the competing demands on theskilled resource that the SIB requires, mostnotably the civil nuclear industry over thecoming decades. The nuclear submarineindustrial base already contains a high pro-portion of the most skilled nuclear engineersin the country. As such, it is already the prin-cipal sector that the civil nuclear industryrecruits experienced staff from. But the levelof skilled engineers within the SIB also pre-sents a considerable opportunity for thecompanies involved.

BAE Systems, Rolls-Royce, DML,Babcock, and Weir, Strachan & Henshawhave significant expertise in nuclear engi-neering and nuclear safety case delivery. Eachrecognizes the danger of losing key skillsentirely to the civil sector, which is likely tobe able to offer higher remuneration than adefence-related contractor, but each also rec-ognizes that competing for work in the civilsector could deliver additional business andpreserve their own nuclear engineeringskills. The advantages of competing for civilwork include the maintenance and develop-ment of skills, additional revenue and level-ling of the demand that is involved even withthe targeted production ‘drumbeat’ thatwould see a boat launched every twenty-twomonths.

In theory, the Government might beexpected to have a role in mediating thisdemand, and to some extent it has supportedefforts by Cogent, the Sector Skills Council,58

to quantify and predict resource demandsuch that it does not impede either civil ormilitary programmes. However, the compa-nies within the SIB are largely content that byusing their skills to compete for civil nuclearwork, the requirements of each sector can befulfilled by market demand, without need for

57 Interim Storage of Laid-Up Submarines. See <http://www.isolus.org.uk>.58 Cogent is the Sector Skills Council (SSC) for the Chemicals and Pharmaceuticals, Oil and Gas, Nuclear, Petroleumand Polymer Industries. It is one of twenty-five SSCs which, together with the Sector Skills Development Agency(SSDA), form the Skills for Business Network (SfBN).Cogent is licensed by the Government to provide employers inits sector with the opportunity for coherent leadership and strategic action to meet their skills needs.


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intervention from MoD or the DTI.While nuclear engineering skills may

be distributed by market dynamics, thisapproach may not succeed in other crucialaspects of submarine construction. Severalareas of the submarine, particularly on anSSBN, depend upon large, high-grade cast-ings and forgings, which are also in highdemand worldwide for the construction ofnew civil nuclear power plants. The particu-lar problem is that only two companies are ina position to supply these castings to the UKsubmarine programme. The potential forcost inflation or even a lack of availabilitymay yet require a longer-term view from theUK Government, particularly in terms ofauthorizing funding sufficiently far inadvance to ensure timely supply. The poten-tial impact of delayed delivery is serious, andindustry is simply not able to entirely miti-gate the risk involved. In this case, as in manyvaried aspects of future submarine design,build and support, long-term partneringbetween Government and industry is vital toensure that the UK can continue to field thisuniquely capable platform.

Conclusion – Establishing an AffordableMinimum CapabilityICEX 2007 was an ideal showcase for thecapability of the SSN: able to operateautonomously under-ice, having rapidlytransited from its home port and performinga range of roles from arctic warfare exercisesto scientific research under the polar ice cap.In the ensuing media coverage, it was heart-ening to see at least one article explaining thetasks performed by this most elusive andsecretive of platforms, one whose roles andcapability are rarely acknowledged in pub-lic.59

Ultimately, nuclear powered sub-marines provide a unique and highly relevantdefence capability, but they do so at what is

perceived to be an unsustainable level ofcost. In comparison to other capability areas,nuclear submarines suffer criticism becausetheir through-life costs cannot be absorbedor masked by other programmes as can bethe case with fast jets or large standing landforces. Nonetheless, the Royal Navy can illafford to lose its submarine service at a timewhen its unique capabilities are increasinglyin demand. To postulate the loss of the sub-marine service is not an exaggeration and thefact that UK submarine operations couldbecome unsustainable has undoubtedlycatalysed the dramatic change in the subma-rine enterprise since 2005. But the drive toreduce costs across the enterprise must notbe so aggressive as to constrain the futureviability of the SIB, nor the submarines thatit builds and supports.

For the SIB, the way forward detailed inthe Defence Industrial Strategy had a clearpurpose. Recognizing that competition insuch a unique industry is not necessarily con-ducive to sustainability, DIS sought partner-ing within the SIB and between Governmentand industry. DIS was also correct to identifythe need to work closely with the establishedcompanies at the head of the industry as wellas the supply base that supports them. WithBabcock’s acquisition of DML rapidlyreshaping the industrial landscape, there isperhaps a risk that competition will usurpcollaboration within the SIB. Were this tooccur, the DIS aim of a single industrial enti-ty could be fulfilled in name only, and truecohesion would remain elusive. Accordingly,the principles of DIS will require constantreaffirmation if it is to succeed in the long-term.

The efficiency of the submarine enter-prise must be balanced against the need toretain a viable level of industrial capacity andmilitary capability. Those in MoD and indus-try responsible for the design, build, supportand operation of the Royal Navy’s nuclear

59 Lucy Rodgers, ‘Key Role of UK’s Underwater Hunters’, BBC News, 22 March 2007,<http://news.bbc.co.uk/1/hi/uk/6478915.stm>, accessed April 2007.

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submarines face something of a capabilityquandary. On the one hand is the perceptionthat with a flotilla of only seven or eightSSNs, the UK has reached the lowest possiblelevel of capability in terms of the number ofhulls available for operations worldwide andthat each boat must offer greater advances incapability to account for fewer hulls. On theother, there is the perception that currentboats are being built to an overly stringent setof requirements, that they are ‘gold-plated’.The cost-capability trade-off will be accom-panied by trading unit build cost againstthrough-life support cost. It is this demandfor a more integrated and balanced approachthat has driven the Maritime IndustrialStrategy and the subsequent restructuring ofthe industry. The optimization of submarinedesign for through-life cost will necessitatean occasional reappraisal of defence stan-dards and accepted practices in submarineconstruction. The end result may prove to bea conservative, evolutionary design, but themore radical alternatives must at least beconsidered where appropriate.

Ultimately, MoD and industry mustseek a mutually agreed minimum level ofcapability, both for new submarines and theindustry that designs, builds and supportsthem. Without seeking refuge in the time-served maxim that the best is the enemy ofthe good, only a deeply self-critical approachto capability can ensure the continued opera-tion of British-built nuclear submarines inthe Royal Navy. It is encouraging that this hasalready started in industry, largely promptedby the impending work on SSBN-F, as well asin MoD’s new DE&S structure. Thereremain some difficult decisions on bothcounts, including the level of advancementbuilt into later Astute class boats and the newSSBN. Furthermore, the Naval Base reviewmay not conclude the matter of surplus facil-ities, but Devonport, Barrow and Faslanemay not be able to continue operating intheir current format when the defence bud-get is desperately needed elsewhere.

Decisions on submarine-related infrastruc-ture cannot be separated from wider ques-tions of maritime industry rationalizationthat will need to be answered in the nearfuture.

Only a handful of countries in theworld have the capacity to build nuclear sub-marines, and arguably none compete withthe value and capability of the UK industrialbase, even in spite of its recent turbulent his-tory. If Government and industry fail to fulfiltheir roles in pursuit of a viable industrialbase, the cost of re-establishing the SIB at alater date would most likely be prohibitiveand the country would lose a key strategicindustry and defence capability.

Although the enterprise is by no meansat its optimum level, the recent success in anindustry as technically and commerciallycomplex as this is not to be underestimated.The challenge for Government and industrynow is to sustain this effort long into thefuture. The ideal is that in 2024, a newBritish-built SSBN will depart on its firstoperational patrol. It might be escorted bythe seventh Astute class SSN, the predeces-sors of which will have paved the way for thenew SSBN to enter service on-time and tobudget. Meanwhile, further SSNs, operatingat availability levels unheard of two decadespreviously, may be deployed worldwide insupport of UK defence policy. In roles asdiverse as support of expeditionary strikegroups led by the Queen Elizabeth class air-craft carriers, sea control in the emergingshipping lanes of the Arctic and the currentchoke points in the Mediterranean, thePersian Gulf and further afield, and ISR oper-ations globally, the Royal Navy’s submarineswill provide unrivalled flexibility no matterwhat the future environment demands ofthem.

This ideal version of the future willonly come to pass if Government and indus-try are able and willing to collaborate with anappropriately cohesive and long-term view.

Documents

Beyond Artful: Government and Industry Roles in Britain's Future