Engineering news
The Ministry of Defence and Rolls-Royce have agreed a 10-year contract that will provide cost savings and enable the nuclear submarine industry to deliver vital UK defence capability.
Under the £800 million contract, which will help sustain 2,000 jobs, Rolls-Royce will deliver and maintain the UK’s nuclear propulsion capability – the power source for the Royal Navy’s Astute and future Successor deterrent submarines.
Part of the Submarine Enterprise Performance Programme, the contract will also help the firm to transform its operations and carry out its work at best value for the taxpayer. By consolidating costs into one agreement, the MoD and Rolls-Royce expect to make savings of £200 million over the next decade.
Negotiations between the MoD and Rolls-Royce mean the savings secured by this contract will not lead to any reduction in the required level of output for the submarine programme.
Defence minister Philip Dunne said: “This contract provides the company with long-term certainty and stability which will help sustain around 2,000 jobs, whilst also providing a better deal for the taxpayer and ensuring our future plans remain affordable.
“By making sure the submarine industry is aligned to the needs of the MoD we are able to press on with the Astute and Successor submarine programmes safe in the knowledge that the value of our significant investment is being maximised.”
Jason Smith, Rolls-Royce president for submarines, said: “I am pleased that we have agreed this enabling contract with the MoD which delivers significant savings to them over the next 10 years and provides us with the stability to deliver these activities efficiently. It further reinforces the commitment to the submarine programme.”
The contract goes a long way towards meeting the government’s commitment to the Submarine Enterprise Performance Programme, as announced in the 2010 strategic defence review, to make at least £900 million of savings by restructuring the UK’s nuclear submarine industry.
Contracts to deliver further savings with BAE Systems Maritime Submarines and Babcock Marine are expected to be announced in due course.