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
.
The impact of the Royal Navy and
defence related industries on the
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
The impact of the Royal Navy and
defence related industries on the
Portsmouth Region
The last ever ship completed in Portsmouth was HMS Andromeda, a
Leander Class Frigate, completed in 1967.
The impact of the Royal Navy and
defence related industries on the
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
The impact of the Royal Navy and
defence related industries on the
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.
The impact of the Royal Navy and
defence related industries on the
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.
The impact of the Royal Navy and
defence related industries on the
Portsmouth Region
The successful bidder was Fleet Support Ltd made up of
a conglomerate of VT Shipbuilding and BAE Systems
The impact of the Royal Navy and defence
related industries on the Portsmouth
Region
Type 45 Bow Section
The impact of the Royal Navy and
defence related industries on the
Portsmouth Region
In 2002 VT Shipbuilding moved its facilities from
Southampton to Portsmouth Dockyard
The impact of the Royal Navy and
defence related industries on the
Portsmouth Region
Type 45 first of class – HMS Daring
The impact of the Royal Navy and
defence related industries on the
Portsmouth Region
Socio Economic Assessment of Portsmouth
Naval Base
Undertaken by the University of Portsmouth,
Centre for Local and Regional Economic
Assessment (CLREA)
The impact of the Royal Navy and
defence related industries on the
Portsmouth Region
• The Naval Base currently supports
approximately 35,000 jobs within South East
Hampshire of which:
13,300 service jobs
21,600 civilian jobs
These account for 8% of all jobs located in the
sub region.
The impact of the Royal Navy and
defence related industries on the
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
The impact of the Royal Navy and
defence related industries on the
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
The impact of the Royal Navy and
defence related industries on the
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.
The impact of the Royal Navy and
defence related industries on the
Portsmouth Region
The impact of the Royal Navy and
defence related industries on the
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.
Other Firms Indirectly Dependent upon Defence
Other Defence Dependent Firms
The Defence Industrial Base
Local Defence Establishments
Co-located
Defence
Establishments
Outside
PNB
Portsmouth
Naval
Base (PNB)
The Defence Industrial Base
Other Defence Dependent Firms
Other Firms Indirectly Dependent upon Defence
Naval Base and
Operational Staff
6,100 jobs
B+C
Maritime Defence Inner Core
Base Heritage Area
250 jobs + 335,000
visitors
Base Prime & Day
Contractors
3,550 jobs
A+B+C
A+B+C
Maritime Defence Outer Core
Portsmouth Based
Ships 7,300 crew
Other Training Bases
inc. Flagship 6,850
jobs
MoD Support
Agencies
A+B+C
A+B+C
2,350 jobs
B+C
Visiting Warships
18,500 crew
B
Local Expenditures
net of Tax & NI
£437.1m
£326m - Expenditure into local economy
Leakages
Mainly household purchases
out of the local area +
expenditure taxes
£110.5m
A
Purchases from local
defence industrial base
& other suppliers
£70.0m
B
C
Visitor & tourist spending
in the local economy
£40.9m
Wages spent as household
purchases in the local area
£215.7m
+ £178m Multiplier effect from Local Economy Forecasting Model
The impact of the Royal Navy and
defence related industries on the
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.
The impact of the Royal Navy and
defence related industries on the
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.
The impact of the Royal Navy and
defence related industries on the
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.
The impact of the Royal Navy and
defence related industries on the
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
The impact of the Royal Navy and
defence related industries on the
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.
The impact of the Royal Navy and
defence related industries on the
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
The impact of the Royal Navy and
defence related industries on the
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
The impact of the Royal Navy and
defence related industries on the
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.
The impact of the Royal Navy and
defence related industries on the
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.
The impact of the Royal Navy and
defence related industries on the
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.
The impact of the Royal Navy and
defence related industries on the
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
The impact of the Royal Navy and
defence related industries on the
Portsmouth Region
Portsmouth and its harbour today
• Barriers to progress of defence sector?
• My observations