The Ministry of Defence is planning to release more than £1bn, possibly as early as September, to enable BAE Systems and Rolls-Royce to begin manufacturing the first of four ultra-stealth submarines that will form the centrepiece of Britain’s renewed nuclear deterrent, the Financial Times reports.
The funding, which is expected to last for 12-18 months, will mark the start of industrial production in a programme which has been budgeted at £41bn, including £10bn for contingencies. It will be the first payment since MPs confirmed Britain’s commitment to renewal of the Trident nuclear deterrent system with a parliamentary vote in July.
The scope of the financing package is still being negotiated by the MoD with industrial partners, BAE and Rolls-Royce. Unlike most previous defence contracts, financing for the industrial phase of renewal will only be released in stages to try to keep costs under control. At each stage new conditions for performance and delivery could be agreed.
So far £4bn has been spent. Industry sources said the new round of funding would be used for continued design work and to order components that take a while to manufacture. It would also be used to secure production in the supply chain, which accounts for roughly half the cost of building a new submarine. The first steel is expected to be cut by the end of the year.
An MoD spokesperson said the ministry continued to “deliver the Successor submarine programme milestones. We will announce key programme milestones in due course.”
