Charlie BarkerWyatt

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Charlie Barker-Wyatt

• Sector Manager Defence and Homeland Security
• Research Knowledge Transfer Services

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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 Souths
  economy with employment, income and output
  effects stretching to Winchester, Sussex, the New
  Forest, the Isle of Wight and further afield

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Maritime Defence At The Heart of the Regions
Economy

• .

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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

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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.
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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 Notts 1981 defence review. Recommended that
  Portsmouth and Chatham dockyards should be closed

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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.

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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.

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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

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Type 45 Bow Section
The impact of the Royal Navy and defence related
industries on the Portsmouth Region
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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

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The impact of the Royal Navy and defence related
industries on the Portsmouth Region
Type 45 first of class HMS Daring
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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)

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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.

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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

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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 regions
  economy creating more jobs and output

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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.

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

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Other Firms Indirectly Dependent upon Defence
Other Defence Dependent Firms
The Defence Industrial Base
Local Defence Establishments
Portsmouth Naval Base (PNB)
Co-located Defence Establishments Outside PNB
The Defence Industrial Base
Other Defence Dependent Firms
Other Firms Indirectly Dependent upon Defence
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Maritime Defence Inner Core
Maritime Defence Outer Core
Naval Base and Operational Staff 6,100 jobs BC
Other Training Bases inc. Flagship 6,850
jobs ABC
Base Prime Day Contractors 3,550 jobs ABC
Base Heritage Area 250 jobs 335,000
visitors ABC
MoD Support Agencies 2,350 jobs ABC
Portsmouth Based Ships 7,300 crew BC
Local Expenditures net of Tax NI 437.1m
Visiting Warships 18,500 crew B
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 Visitor tourist spending in the local
economy 40.9m
C Wages spent as household purchases in the
local area 215.7m
178m Multiplier effect from Local Economy
Forecasting Model
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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.

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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.

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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.

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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 Navys Fleet Headquarters on Whale Island

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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.

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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

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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

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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.

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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.

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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.

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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

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The impact of the Royal Navy and defence related
industries on the Portsmouth Region
Portsmouth and its harbour today
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• Barriers to progress of defence sector?
• My observations