A significant government investment

The National Shipbuilding Strategy Refresh

Rex Cox welcomes the government’s broadened vision for the UK shipbuilding sector and its supply chains

On 10 March 2022, the government released its much-anticipated Refresh to the National Shipbuilding Strategy, updating the 2017 version published by the Ministry of Defence. The original strategy had a clear defence focus, setting out a vision for a productive, innovative naval shipbuilding sector, and since its publication there have been some significant achievements, such as the placing of the Type 31 contract and the export of the Type 26 design to Canada and Australia. However, over the last five years there has been a significant strategic shift, and the government’s vision for the UK shipbuilding sector has grown in scope, in recognition of the role it can play in supporting levelling up and boosting prosperity. There is a renewed determination to reinvigorate the whole UK shipbuilding sector, including commercial shipbuilding, the leisure sector and the wider supporting supply chain.

That is why the Refresh goes wider than defence and encompasses the whole shipbuilding enterprise, which is deliberately defined in the broadest sense. It also goes beyond just steel and hulls. It’s about systems and subsystems; it’s about design and testing; it’s about commercial vessels, offshore wind, support and leisure vessels. There are over 1,500 registered businesses in the UK shipbuilding industry, 99 per cent of which are small and medium enterprises. The strategy encompasses the entire supply chain and sets out how the government will support industry to capitalise on opportunities to grow through contracts from both the UK and overseas.

A fishery protection vessel off the coast of Northern Ireland. Orders for such craft, along with Border Force cutters, lighthouse vessels, workboats, and leisure craft, are among the types of vessels that, together with commercial vessels and warships, are envisioned in the 30-year pipeline the refreshed strategy covers. Photo: NSO

We are very clear – this broader scope isn’t about nostalgia and harking back to former glory days. It is a recognition of the very real benefits shipbuilding brings to the whole of the UK. The sector supports 42,600 jobs right across the country and adds £2.8 billion to the economy. The government wants to capitalise and build on this, ensuring that the shipbuilding enterprise is able to seize all possible opportunities for transformation and growth.

Demand signal and policy

We know that the government’s shipbuilding order book provides an important demand signal for the sector. That’s why the strategy sets out a 30-year pipeline of more than 150 new vessels for the UK government and the devolved administrations, ranging from large warships to Border Force cutters and lighthouse vessels. This is a significant investment from government. We want to provide a continuous shipbuilding pipeline, because we know a boom-and-bust cycle is damaging for both businesses and programmes. A continuous pipeline will also enable industry to identify efficiencies that will in turn strengthen value for money in our future programmes.

The National Shipbuilding Office (NSO) has been established to oversee the implementation of the strategy and ensure that the opportunities in the pipeline are delivered. We have strategic oversight of all the government’s interests in UK shipbuilding, cohering policy and interventions across all departments including International Trade, Transport, Education and Business. But we can’t deliver the ambitions in the strategy alone. This is a partnership, and we must work in lockstep with industry and academia to drive transformation together.

Productivity and skills

The Shipbuilding Enterprise for Growth, which has met several times since the strategy launched, brings together key figures in the industry as well as experts who bring experience and best practice from outside the sector. The group is supported by dynamic ‘task and finish’ groups such as Shipyards of the Future and Centres of Excellence to seize and tackle specific objectives and challenges. These groups are able to influence policy and interventions, demonstrating how organisations can work together to set the conditions for the sector to continue to thrive.

Studying structural drawings at Cammell Laird, Birkenhead. One of the biggest challenges for UK shipbuilding is the availability of skills and labour. Photo: NSO

One of the biggest challenges facing the whole enterprise is the availability of skills and labour, especially as we seek to create sustainable growth. Whilst there are reasons to be optimistic, with successful programmes across the sector – from the new BAE Systems Academy on the Clyde to the award-winning apprenticeship programme at Princess Yachts in Plymouth – the Strategy identified this as one of the major areas to get after. The establishment of the UK Shipbuilding Skills Taskforce will ensure renewed focus on the issue. Headed up by Hon Captain Dr Paul Little, of City of Glasgow College, and with representation drawn from across the country and the education and shipbuilding sectors, the Taskforce is reaching out to yards and academia across the UK to understand the sector’s skills needs. It is looking to the future to ensure that the right foundations are being laid for the labour landscape in decades to come and ensure that any new interventions will complement existing programmes and schemes.

Technology and green maritime

We recognise that each procurement represents an opportunity to develop specific technologies to maintain our competitive advantage. The UK has set some ambitious plans for our maritime technology and innovation. Designing technology into vessels early will reduce through-life costs and improve reliability and availability. As well as onboard technology, the strategy also encourages innovation in our shipyards. We must look outside our own sector and make the most of advances in automation and digitisation of manufacturing, exploiting these in the maritime sector through digital dockyards and digital twin technology. This will not only result in more effective, efficient and competitive shipyards, but more effective and efficient support solutions.

The strategy also sets out a clear commitment to green maritime, and has committed £206m to support the transition to net zero through the UK Shipbuilding Office for Reducing Emissions (UK SHORE). The whole enterprise is grappling with the challenge of how to triage the suite of current diesel builds towards hybrid vessels and then into the types of designs needed in a net-zero age. We understand that this is a daunting task when there is neither any clear single propulsion technology nor any decision on the fuel of choice, nor indeed the shoreside infrastructure and bunkering required to operate these alternative fuels. UK SHORE’s interventions are therefore targeted at addressing barriers to maritime decarbonisation and harnessing R&D investment through matched funding.

Finance and exports

The government also recognises that to increase overall competitiveness a number of factors need to be addressed in tandem. To compete with the government-backed export financing packages that overseas shipbuilders can offer to UK ship customers, the Department for Business, Energy and Industrial Strategy is developing the Home Shipbuilding Credit Guarantee Scheme, which should be launched this year, 2022. This will give banks the confidence to provide loans to domestic companies looking to build ships in the UK, supporting our ambitions to bring shipbuilding home. UK Export Finance will continue to offer support to shipyards and other maritime businesses, to help them compete internationally.

Leisure craft have an important place in the spectrum of British shipbuilding. This luxury yacht is from Princess Yachts in Plymouth. Photo: Princess Yachts

Finally, we believe that a thriving UK shipbuilding enterprise needs a strong export market share to be sustainable. This applies equally to defence and civil exports right across the supply chain, and will ensure that the shipbuilding sector actively contributes to our Global Britain ambitions. The Department of International Trade has set up the Maritime Capability Campaign Office to actively pursue export opportunities through a coordinated approach with industry and government, which will boost the reputation and success of the UK internationally.


The National Shipbuilding Strategy Refresh is a fantastic opportunity for the whole shipbuilding enterprise. It is a clear-eyed, future-facing approach that sets out the government’s commitment of well over £4bn to bring about a renaissance in shipbuilding. There remains a clear mandate for the National Shipbuilding Office to drive interventions to exploit opportunities and overcome challenges facing the whole sector from the very heart of government. The 30-year pipeline provides industry certainty and clarity on our policy and procurement ambitions; the refreshed focus has brought energy and drive, and is an opportunity for all sectors. The NSO team and I are here to help and welcome your views as together we strive to maximise the potential and deliver transformation and growth in the shipbuilding sector.

Rear Admiral Rex Cox is CEO of the National Shipbuilding Office. With over 30 years’ experience in the Royal Navy, he worked as the Defence Policy Advisor for HM Treasury from 2015 to 2018 and more recently as the Head of Capability Planning in the Finance and Military Capability directorate of the Ministry of Defence.