Fears for 500 jobs as MoD seeks cuts to curb aircraft carrier costs

Published on Tuesday 30 June 2009 00:30

HUNDREDS of jobs at the Clyde shipyards were put at risk last night after it emerged the Royal Navy's new aircraft carriers are running £1 billion over budget.

Leaked memos from the consortium building the two carriers warned they faced a "very real fight" for survival. The Ministry of Defence admitted it was currently re-costing the carrier programme, work on which was due to get under way on the Clyde next week.

The memorandum by the board of the carrier consortium – which includes BAE Systems and the VT Group – warns of "substantial redundancies" of between 400 and 500 jobs to cut costs.

Much of the work is due to take place at shipyards on the Clyde, where 4,000 jobs are dependent on the two warships – HMS Queen Elizabeth and HMS Prince of Wales.

The 65,000 tonne vessels were due to come into service in 2014 and 2016, as the biggest and most powerful warships the UK has ever built.

Work on the two carriers had been due to get under way in December last year, but was postponed until 7 July.

Harry Donaldson, secretary of the GMB Scotland union, said the workforce on the Clyde would be "shocked" by the development, which he feared would have a "major impact on jobs and the local economy.

"Our view is it would be a false economy at this stage to try and cut, bearing in mind we need the carriers for our defence programme.

"It is not going to be easy to get these skilled workers alternative employment at this point. These are highly-skilled workers and they are significant to the defence of the country. We will be looking for cost efficiencies that won't impact on jobs."

A spokesman for the MoD said it was made clear last year that the cost of the carriers was set to increase.

"We took the decision to delay the two future aircraft carriers in December 2008.

"We did this in order to re- prioritise investment to meet current operational priorities and to better align the programme with the Joint Strike Fighter aircraft.

"We acknowledged at the time that there would be a cost increase as a result.

"We are currently re-costing the programme.

"The MoD accounts published next month will present an initial estimate and the formal costing will be available until later in the year."

A spokesman for BAE Systems said that the initial delay to the project was always expected to lead to an increase in costs.

He added: "The decision to delay the in-service dates of the carriers, taken as part of the MoD's equipment examination in December 2008 to meet affordability challenges, led to a substantial re-profiling of the programme to spread the work over a longer period of time."

However, a spokeswoman for the Scottish Government said: "These reports are extremely worrying and we will be demanding immediate clarification from the UK government as to what the position is."