Spending on Dreadnoughts

UK Defence Journal

What has been spent so far on the Dreadnought class nuclear submarines?

By George Allison

5 February 2018

Source: https://ukdefencejournal.org.uk/spent-far-dreadnought-class-nuclear-submarines/

A House of Commons research paper has detailed the spending so far undertaken by the Dreadnought programme.

The paper, entitled ‘Replacing the UK’s Nuclear Deterrent: Progress of the Dreadnought Class’ is presented as an analysis of the programme and was published this week.

According to the paper, approximately £4.8 billion had been allocated to the concept and assessment phases of the programme (£905 million and £3.9 billion respectively). Several long-lead items, including the steel for the first submarine and items relating to the propulsion system, were contracted for under this phase of spending according to the research paper.

In its 2016 Update to Parliament the MoD confirmed that, by the end of 2016, they had spent approximately £2.5 billion of its assessment phase funds. It also confirmed that, due to the long-lead nature of some of the goods and services under contract, payments for items procured during the assessment phase will continue through to 2023.

At the start of Delivery Phase 1 two contracts were awarded for work going forward notes the paper:

• £986 million for platform construction

• £277 million for continuing design work, purchasing materials and long lead items and investing in facilities at Barrow.

According to the research paper:

“Up to the end of March 2017 the MOD had also spent £157.6 million on Trident Service-Life Extensions project, thus far. In its January 2018 assessment of the MOD’s Equipment Plan, the National Audit Office raised concerns over the impact of nuclear-related projects, including Dreadnought, on the Department’s overall equipment spend:

Nuclear-related projects (the nuclear enterprise) represent around a quarter of the Plan. They are inherently complex projects and, because of their size, have the potential to destabilise the wider plan. In particular, the Dreadnought project accounts for a significant proportion of the estimated cost of buying equipment in the Plan.

Nuclear-related project costs continue to grow and forecast costs are higher than those shown in the Plan. Nuclear-related projects could destabilise the Plan because of their size and complexity. Our project testing has shown that costs for the Dreadnought and Astute projects have increased by £941 million since the 2016 Plan. The Department is reviewing the reliability of forecast costs for all of its nuclear projects and expects that updated costs as a result of this exercise will be incorporated into the 2018 to 2028 Plan.”

It concludes:

“At, potentially, £41 billion the Dreadnought programme is one of the most expensive Government projects going forward. It is a project that has around twice the budget of Crossrail, and three times the budget of the London Olympics.

With respect to departmental spending, the running costs of the nuclear deterrent (presently around £2.2billion per year) is often compared to the benefits bill, or NHS spending. The £2.2bn spent on maintaining the nuclear deterrent per year is roughly equivalent to £42m per week, or around £34 per person per year.

Alternatively, £2.2 billion a year is roughly equivalent to what is spent on Income Support, Statutory Maternity Pay, Carer’s Allowance, or Winter Fuel Payments (each of which are around £2 – £2.8 billion per year). According the Treasury’s Spending Review 2015, the planned spend on the costs of providing health care (including the NHS) in 2017/18 is £120.1bn. This equates to around £2.3bn per week.”