Charlie Barker-Wyatt

Charlie Barker-Wyatt

Sector Manager – Defence and Homeland Security

Research & Knowledge Transfer Services

The impact of the Royal Navy and defence related industries on the

Portsmouth Region

Defence Dependency in the South

Although mainly based Around Portsmouth and Gosport, defence is at the heart of the South’s economy with employment, income and output effects stretching to Winchester, Sussex, the New Forest, the Isle of Wight and further afield

Maritime Defence – At The Heart of the Region’s Economy

.


Portsmouth Region• 1495 Founded by King Henry VII

• Middle of 18th Century it had become one of the largest and most capable industrial organisations in the world and a key component of the Industrial Revolution

• In the era of the Napoleonic Wars it was a major centre for the development of revolutionary industrial processes and mass production techniques

• In the early years of the 20th Century more battleships were built in Portsmouth than at any other shipyard in Great Britain

• At its peak more than 22,000 men and women worked in the dockyard. It was, at the time, the largest industrial complex in the country and indeed the world


Portsmouth RegionThe last ever ship completed in Portsmouth was HMS Andromeda, a Leander Class Frigate, completed in 1967.


Portsmouth Region

• By 1981 the numbers in the dockyard had reduced to 7,500. The effect of this rundown on the local economy was cushioned by the growth of other defence related industries along the A27 corridor.

• John Nott’s 1981 defence review. Recommended that Portsmouth and Chatham dockyards should be closed


Portsmouth Region

• Eventually, after much Trade Union bargaining, political pressure, Portsmouth won a small concession

• It was reconstituted as a Naval Operating Base incorporating a new organisation for maintaining and repairing (but not refitting) ships named the Fleet Maintenance and Repair Organisation (FMRO) – jointly manned by civilian and service personnel. Redundancy notices were issued to all but 1,800 civilian workers

• The 1982 Falklands War

• Following this the MoD had a serious rethink about the Nott strategy.


Portsmouth Region

• Ground breaking agreements negotiated with the Trade Unions and working practices revised. When the FMRO was formally established in October 1984, civilian numbers were pegged at 2,800

• In 1987 Devonport and Rosyth were put under commercial management, and Portsmouth continued to retain the one remaining government operated repair yard for surface warships

• In April 1998, contractorisation was at last implemented at Portsmouth.


Portsmouth RegionThe successful bidder was Fleet Support Ltd made up of

a conglomerate of VT Shipbuilding and BAE Systems

Type 45 Bow Section

The impact of the Royal Navy and defence related industries on the Portsmouth

Region


Portsmouth Region

In 2002 VT Shipbuilding moved its facilities from Southampton to Portsmouth Dockyard


Portsmouth Region

Type 45 first of class – HMS Daring


Portsmouth Region

Socio Economic Assessment of Portsmouth Naval Base

Undertaken by the University of Portsmouth, Centre for Local and Regional Economic

Assessment (CLREA)


Portsmouth Region

• The Naval Base currently supports approximately 35,000 jobs within South East Hampshire of which:13,300 service jobs21,600 civilian jobs

These account for 8% of all jobs located in the sub region.


Portsmouth Region

• 15% of people living in Gosport, 10% in Portsmouth and 8% of those in Fareham are in “defence dependent” jobs.

• This employment and the spending of defence firms generates an income of £680 million for the local economy

• The residents of these areas could lose in the region of 13,650 jobs

• The impact of such job losses upon local income could have been as much as £350 million


Portsmouth Region

• This DIRECTLY creates jobs and output

Also INDIRECTLY by:• Purchases from other firms within the regional

economy • Attracting visitors who spend within the region• Employing staff who live and spend in the area• This spending ‘ripples’ through the region’s

economy creating more jobs and output


Portsmouth Region

• This year the Government finally ordered the much promised aircraft carriers, HMS Queen Elizabeth and HMS Prince of Wales.

• These are the largest ships (some 60,000 tons) ever to be built by the Royal Navy and will be undertaken by VT Shipbuilding and BAE Systems Shipbuilding.

• As with the Type 45, sections of the aircraft carrier will be built in Portsmouth Dockyard. And transported to Scotstoun and Govan on the Clyde where the various sections will be joined together and the ship completed.


Portsmouth Region


Portsmouth Region

• This has resulted in BAE Systems Shipbuilding and VT Shipbuilding to create a joint venture called BVT Surface Fleet Ltd with operations in Portsmouth, Bristol and Glasgow.

• This has also resulted in the combining of Fleet Support Ltd – the respective warship through life support business.

• Following this BVT Surface Fleet Ltd will shortly sign a 15 year partnering arrangement with the MoD, which will guarantee defined future programmes with respect to design, build and through life support of BVT facilities in Portsmouth, Bristol and Glasgow.

PortsmouthNaval

Base (PNB)

Co-locatedDefence

Establishments Outside

PNB

Local Defence Establishments

The Defence Industrial Base

The Defence Industrial Base

Other Defence Dependent Firms

Other Defence Dependent Firms

Other Firms Indirectly Dependent upon Defence

Other Firms Indirectly Dependent upon Defence

Naval Base andOperational Staff

6,100 jobs

B+C

Portsmouth Based Ships 7,300 crew

B+C

Visiting Warships

18,500 crew

B

Other Training Bases inc. Flagship 6,850

jobs

A+B+C

Base Prime & Day Contractors 3,550 jobs

A+B+C

Base Heritage Area250 jobs + 335,000

visitors

A+B+C

APurchases from local

defence industrial base & other suppliers

£70.0m

BVisitor & tourist spending

in the local economy£40.9m

CWages spent as household purchases in the local area

£215.7m

LeakagesMainly household purchases

out of the local area +

expenditure taxes

£110.5m

+ £178m Multiplier effect from Local Economy Forecasting Model

£326m - Expenditure into local economy

MoD Support Agencies

2,350 jobs

A+B+C

Maritime Defence Inner Core Maritime Defence Outer Core

Local Expenditures net of Tax & NI

£437.1m


Portsmouth Region

• An estimated 2,700 Royal Naval and civilian personnel are directly employed at HMNB Portsmouth.

• In total, the 89 shore-based MOD units in the local area support over 6,800 service and 3,600 civilian jobs. A further 7,280 servicemen and women serve on Portsmouth based ships.

• In addition, around 12,700 crew from visiting ships spend an average of 4 days in Portsmouth each year.


Portsmouth Region

• The prime defence contractors in HMNB directly employ over 2,400 staff and in addition, they also indirectly employ a large number of contractual and agency staff within the base.

• These prime contractors also indirectly support jobs in more than 700 firms within a 20 mile radius of HMNB through expenditures of more than £48m annually.


Portsmouth Region

• In total the MOD and prime contractors at Portsmouth HMNB directly employ over 5,100 staff (uniform and civilian).

• 86% of these live locally and earn in excess of £103m (gross) which is likely to be spent locally and will support jobs in other local firms throughout the economy.


Portsmouth Region

• Apart from the Naval Base and Dockyard, the area contains many defence training establishments including HMS SULTAN, HMS COLLINGWOOD and HMS Dryad as well as other smaller establishments.

• There is also the significant presence of the Royal Navy’s Fleet Headquarters on Whale Island


Portsmouth Region

• The Defence Training Review, a multi million investment by the MoD, and spearheaded by the company Metrix, is looking at ways to streamline and economise on service training across all three services.

• As a result of this HMS SULTAN will disappear and be amalgamated into a new tri service training centre at St Athans in Glamorganshire. This will have a considerable socio-economic impact on the Gosport area.


Portsmouth Region

• HMS Collingwood, will, however, stay. It employs some 6,000 people, including trainees.

• HMS Sultan currently employs 2,788 people of which 1,331 are trainees


Portsmouth Region

• TRAINING AND VOCATIONAL SKILLS

• Flagship Training. Consisting of about 500 people This organisation, since the BAE Systems/VT merger is now fully owned by VT and carries out training, amongst others , for Royal Navy establishments in the area equipping Royal Naval personnel with the right engineering and seamanship skills to man and operate warships, submarines and aircraft


Portsmouth Region

• Defence Industries in the Portsmouth Area• The region is proliferated with defence

companies from the large multi nationals to SMEs and small local contractors that supply not only the dockyard but the defence industry as a whole

• The large multinationals consist of Finnmechanica (Selex – Sistemi Integrati ands Selex Communications), BAE Systems, QinetiQ, EADS, Northrop Grumman and Lockheed Martin.


Portsmouth Region

• Many of these supply specialist services in the areas of system integration and update of electronic control, command and weapon systems. They are also engaged in non naval, but defence applications for the Army and the RAF

• The SMEs tend to provide very specialist skills and services such as Portsmouth Aviation who supply CBRN equipment to surface vessels. Welland defence on the other hand supply sophisticated filtration systems for HM submarines, which are not to be found in the dockyard.


Portsmouth Region

• BVT Surface Fleet run apprenticeship schemes for skilled trades such as welding and sheet metal work. These are both for school leavers and mature adults. Some 200 are trained per annum.

• Other companies run limited apprenticeship schemes, and the University of Portsmouth provides many engineering graduates with career opportunities

• Highbury College run apprenticeship schemes which supply skills to the Marine Sector and many other industries.


Portsmouth Region

The University of Portsmouth both in its previous incarnations and to the present day has strong links with the Royal Navy and the

dockyard• HMS Collingwood and Sultan – Foundation

degrees• Applied research for the dockyard Fleet

Headquarters and, with QinetiQ and Dstl• Continuing professional development


Portsmouth Region

Portsmouth and its harbour today

• Barriers to progress of defence sector?• My observations

Charlie Barker-Wyatt

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