neversay wrote:I read/heard that the Government is seeking 'shovel-ready projects' to "double-down on levelling-up".
Clearly the Government spending taps will be pouring millions/billiond into infrastructure. We know about HS2 and certain road schemes. Housing could be a target, and a political win, but is clearly problematic when the housing market is depressed.
Where are the other 'shovel-ready projects' and which businesses would stand to gain?
Strictly answering your question as asked and making no judgements on spending priorities, moral judgements, or the likelihood of such projects going ahead I can think of at least two shovel-ready (or maybe in this case welding-torch-ready) projects in defence namely the T26 and T31 frigate programmes.
The first T26 is already in build but at an extremely slow rate, allegedly due to cash flow considerations on the defence budget. The order for the first 3 of a planned total of 8 T26s has been placed with BAE who would be the primary beneficiary were the build schedule and ordering of the target 8 vessels to be sped up. The total project cost is currently projected to be £8bn.
On the T31 the design contract for a new lower cost frigate to relieve the strain on the T26s, the T31, was awarded to a consortium headed by Babcock in September last year. The design is based on an existing in-service design used for Danish frigates and part of Babcock's pitch was that because of that there was virtually no new design costs involved so I would expect T31 design to be at or very close to ready to start cutting steel but again everything is being slowed down by cash flow considerations so a simple speeding up of the initial plan to build 5 would, I would have thought, count as a shovel-ready project. As far as I'm aware no orders to start building even the first vessel have yet been placed (but I could be wrong on that). Additionally on the T31 programme the current plan is for 5 T31s to be built at a total cost of £1.25bn but when the Cameron government announced the T31 programme its stated aspiration was that by introducing a lower cost frigate alongside the T26 it would allow the Royal Navy to increase the number of escort ships. An initial order of 5 only maintains the number of frigates (13 x T23 ultimately replaced by 8 x T26 plus 5 x T31) thus in military circles there is a hope, bordering in many cases on an expectation, that an additional batch of T31 will be announced where pre-Covid-19 I'd say the consensus estimate was another 3 might be a realistic possibility to take the total build up to 8 x T26 plus 8 x T31 (some observers obviously hoping for many more, and cynically the Government would only need to add single extra T31 to the build to meet Cameron's stated aspiration to increase escort numbers).
There are probably many other equipment renewal projects within the MoD that could be expanded or accelerated or simply given the go-ahead from a currently on-hold position, I only really follow the RN. From a perspective of economic stimulus big defence projects can often be fairly potent since often even if equipment is being procured from an overseas manufacturer there is a requirement for much of the work to be done in-country via in-country subsidiaries or partner companies in order to keep employment in the UK, an example of that is actually T26 for Canada and Australia where BAE successfully won the business for both countries' next generation frigate with the T26 design but in both cases the T26s for Australia and Canada will be built in-country in both cases (with complex components shipped in in some cases of course e.g. Rolls Royce gas turbines). Much shipbuilding and other manufacturing is also in northern areas so plays to the levelling-up message too.
The flip side of all the above is that coming out of a health crisis that put such strain on the NHS and exposed such weaknesses in social care provision the Government might not think it politically expedient to be increasing defence spending if that was not considered aligned with the general public's consensus spending priorities.
- Julian