In the 150m-long Venturer build hall at Rosyth Dockyard on the River Forth near Edinburgh, a Royal Navy ship is taking shape. This is HMS Formidable, a frigate intended for general missions such as escorting merchant ships through the Strait of Hormuz. One day, it will project British sea power again.
The 320-acre site run by Babcock International, the UK defence company, was filled with activity when I visited this month. Sheets of marine-grade steel were being sliced and welded into blocks to form parts of the next frigate’s hull and decks. In the Venturer hall, Formidable was being put together in blocks, and engines and electrical equipment fitted.
But the Gulf war has exposed how unformidable Britain’s navy has become. The US defence secretary Pete Hegseth was rude to mock the “big, bad Royal Navy” recently, but not wrong. The HMS Queen Elizabeth aircraft carrier — one of the UK’s two — has just left Rosyth after eight months of refitting and the frigates may not start to enter service until late this decade.
The Royal Navy had about 30 destroyers and frigates a quarter century ago but is reduced to 13 in service. Its fleet of seven frigates designed for anti-submarine warfare and general patrols is ageing fast. “The navy is in a very difficult position, and its frigates are falling to bits,” says Steve Prest, associate fellow of the Royal United Services Institute, a defence think-tank.
Babcock was one of the best performers in the FTSE 100 last year © Babcock
Babcock’s new Type 31 frigates, along with eight Type 26 frigates being built by BAE Systems on the Clyde, are intended to rebuild the Navy’s strength in a critical defence area. They also have a wider significance: they are smaller than the Type 26s and will lack the latter’s anti-submarine weaponry. But they are cheaper: a production cost of £250mn each, compared with several times that sum.
These ships are “more available, more adaptable and more affordable”, says Sir Nick Hine, chief executive of Babcock’s marine division. They can also be built faster than others: Hine says his aim is to be able to assemble each one in less than four years. That is tempting not only for the UK but for allies wanting to expand their navies.
It is good for Babcock, which was one of the best performers in the FTSE 100 last year. It is far smaller than BAE Systems, but this programme has allowed it to invest in Rosyth and build frigates, along with missile launch tubes for Royal and US Navy nuclear submarines. Babcock’s annual operating profit rose to £364mn last year from £242mn in 2024.
The challenge will be to keep it going when the frigates are finished. Shipyards depend on a “drumbeat” of production, and Babcock has learnt as it has gone along how to build ships more efficiently. HMS Formidable is the third and is being assembled in larger blocks with more parts fitted earlier.
If the drumbeat falls silent when the fifth ship joins the Royal Navy, much of this knowledge could be wasted. Babcock is trying not to let it happen. The Navy wanted more Type 31s, but the number was capped by the Treasury. It now hopes for a fresh order for an updated frigate called the Type 32.
Babcock has licensed the frigate platform to Poland and Indonesia to build their variations, which brings in intellectual property revenues. The bigger prize is to build more ships for the UK’s allies at home: the UK has been in advanced talks with Denmark and Sweden to make it happen. Norway has meanwhile agreed to order at least five Type 26s to be built on the Clyde.
Defence dithering is harming the UK
The Type 31 programme now employs about 1,250 people directly and another 150 apprentices. These are skilled jobs in advanced manufacturing, a government priority. It is impossible to outsource such work to countries such as China for security reasons, although much of the steel is supplied by a Dutch company and welding tools by a Finnish one.
“Once you get good at making ships, keep going. It is very difficult to start again when you have stopped,” Prest remarks. There is an obvious industrial logic to continuity. Not only does it provide steady investment for one of the UK’s big defence groups but it helps to build Scotland’s economy and revive a valuable industry.
A shipbuilding drumbeat also makes military sense. The UK defence budget faces a £28bn shortfall over the next four years and the government has delayed its defence investment plan. But old warships require more repairs than modern ones and the Royal Navy needs to be renewed. Rosyth shows what the future could be.
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