Aukus submarine plan an extra complication
Barrow-in-Furness on England’s Cumbrian coast doesn’t have a twin town. Should civic leaders consider adopting one, this week presented an obvious choice – Adelaide.
The pair are about to be linked in one of the most ambitious military procurement programmes yet, to build up to 20 nuclearpowered submarines, with the work split between Britain and Australia.
Barrow is home to the United Kingdom’s last submarine construction yard, and Adelaide is going to be the home of Australia’s new one. Barrovians should brush up on their barbecue skills as Australian media say an Adelaide delegation is already planning a trip north.
Early familiarisation is a good idea. The programme will be expensive, certainly well north of £100 billion (NZ$194b), and com- plicated.
The design of the new vessels will have to accommodate the requirements of both navies, incorporate sensitive technology from the United States, and marry the industries of two nations – one with more than six decades’ experience of building nuclear submarines, and the other with none.
But one thing overlooked in the hoo-haa about the Aukus deal is that Britain’s submarine industry already has its hands full.
The completion of the last of the Astute class of hunter-killer submarines, and the construction of new Dreadnoughts that will carry Britain’s nuclear deterrent, are together probably the government’s second-biggest capital project behind the HS2 highspeed rail project. The Dreadnoughts alone are forecast to cost £31b (NZ$60b) to build, and the support costs over their decadeslong service life will be a hefty multiple of that.
Britain’s finances are tight. The Office for Budget Responsibility’s analysis of this week’s budget showed that the chancellor would meet his plan to cut debt as a proportion of GDP
within five years by ‘‘only the narrowest of margins’’.
There is the distinct likelihood that some of his spending promises will give whoever is chancellor after the next election a nasty headache. Further cuts to spending cannot be ruled out.
In all this, however, the submarine programme sails serenely along, moving undetected beneath the surface.
Of the £5b (NZ$9.7b) of extra defence spending announced on the eve of the budget, £3b (NZ$5.8b) is earmarked for the submarine programme. If you shift the focus a little wider to the Defence Nuclear Organisation, which encompasses the submarines and all other nuclear-related defence activities, the size of the spending commitment becomes even clearer.
A recent National Audit Office (NAO) report on the Ministry of Defence’s equipment plan for the next decade shows that nuclear activities will swallow up £59b (NZ$114b), nearly a quarter of the total. Even then, the auditors noted, ‘‘project costs, even based
on outdated inflation assumptions, could increase by between £5b and £9b (NZ$9.7b and $17.4b)’’.
Contractors deprived of work because of the HS2 delays might be wondering why their project took the hit and not the submarine money pit. There are two reasons.
HS2 might be considered a vital piece of infrastructure to boost railway capacity, but it does not have the holy grail status of maintaining the nuclear deterrent.
A credible deterrent means having at least one missile submarine at sea at all times. The present boats, the Vanguard class, are old – the first was commissioned in 1993 – and their replacement cannot be further delayed easily.
The submarine industry is also a fragile beast, with most of the money flowing to a tiny number of defence contractors.
An earlier NAO study found nearly all of the spending (97%) went to four companies – BAE Systems (which owns the Barrow-in-Furness yard), Babcock
(which carries out maintenance at the Royal Navy’s Faslane and Devonport bases), RollsRoyce (which builds the subs’ nuclear power plants) and AWE Management (which works on the nuclear missiles). The programme also depends on a small number of people.
Into this mix has been poured the Aukus programme.
The idea is that the new submarines will be based on a design the UK is working on to replace the Astute class. Britain will build the first boat. Existing commitments mean that this will have to wait until some time in the 2040s.
To bridge the gap, Australia will buy some US submarines (the two American yards are also flat out, by the way), to arrive in the next decade. The AngloAustralian boats will start to be delivered late in the 2040s, just in time to replace the first of the Astutes.
Managing all the extra work and avoiding disruption to existing programmes will be a big task.