UK Government Prioritizes Domestic Shipbuilding

Shipbuilding, steel, AI and energy infrastructure will be recognized as critical for national security, with new guidance prioritizing contracts for British business where necessary to protect national security.

Recent events have shown the fragility of global supply chains, and the importance of ensuring domestic capacity in key sectors which are vital for national security.

For the first time, the government is introducing clear guidance on how departments can protect the UK’s economic security and build resilience in four critical sectors: steel, shipbuilding, AI and energy infrastructure. This guidance will ensure the government does everything in its power to facilitate strong and sustainable industry in the UK.

With further requirements set for steel, departments will either use British steel or be required to provide a justification if the steel is to be sourced from overseas, in a further boost to the UK Steel Strategy launched last week.

Cabinet Office Minister, Chris Ward said: “This Government is backing British businesses and the working people who power them. These reforms are about using the full weight of Government spending to support British jobs, protect our national security and grow our economy.

“Whether you make steel in Scunthorpe, build ships on the Clyde or run a small tech firm in the Midlands, this Government is on your side.”

A new Public Interest Test will mean departments now being asked to assess whether outsourced service contracts over £1 million could be delivered more effectively in-house. This test will cover over 95% of central government contracts by value.

Community impact will now be placed at the heart of buying decisions, with companies encouraged to integrate national and regional schemes into their bids, creating local jobs and apprenticeships.

To ensure accountability, departments will publish and annually report on a specific social value goal for all contracts valued over £5 million. This will cover over 90% of central government contracts by value.

Navantia UK responded to the Cabinet Office’s announcement with Derek Jones, Chief Commercial Officer, saying: "Navantia UK is a new force in British industry, supporting the UK’s defense, security and energy ambitions. We’re committed to strengthening the country’s sovereign defense capabilities at a critical time.

"It makes absolute sense for Britain to prioritize local industry, and it’s encouraging to see the Cabinet Office spell this out so clearly. Our activities support local employment and supply chains, boosting skills and contributing to economic growth.

"The Government’s efforts to support a resurgence in home-grown shipbuilding will deliver a defense dividend for local communities, particularly in coastal areas. And as the country works towards an energy transition, it is essential that key components are built and maintained domestically.”

Navantia UK employs more than 1,200 people in highly skilled, high value jobs at four yards - Appledore, Arnish, Belfast and Methil. The company’s is building three Fleet Solid Support vessels for the armed forces, and its yards in Scotland have a strong track record in supporting offshore oil, gas, wind and renewables infrastructure. Navantia UK was recently named by the Sunday Times as one of the UK’s Top 100 Apprenticeship Employers.