UK Renews Royal Navy’s More Than $1.3B Marine Services Outsourcing Contract

The UK Ministry of Defence and service provider Serco Group reported that they have completed the renewal of a series of contracts that outsource critical marine and port services for the Royal Navy. The contracts, which are reportedly valued at more than £1 billion ($1.33 billion), had become a point of contention between Serco and its two unions leading to a possible strike earlier this year.

Serco reports it has been a key partner to the Royal Navy for nearly 30 years, providing critical services supporting military training exercises, trialing new maritime technology, and assisting the movements of Royal Navy ships in and out of harbor. Serco became the service provider in 2008 for the Royal Navy bases in Devonport, Portsmouth, Faslane, Great Harbour Greenock, and Kyle of Lochalsh, as part of the government’s move to privatize the Royal Maritime Auxiliary Service.

The company reports it has been awarded three contracts for a range of services for the Royal Navy. The contracts, which replace existing services and expand into new capabilities, will commence later this year.

The unions Unite and Promise became concerned this year as the renewal process began for the contracts with the unions protesting the lack of consultation with Serco as the renewal process proceeded. The unions contended that the government was seeking to reduce the value of the contracts, which they asserted could translate into the loss of jobs for members. The unions announced they would strike in March 2024 but later postponed the walkout when they said an agreement had been reached for a consultation process. The Royal Navy said it was a dispute between the employer and the union and would not impact its operations.

"We have been performing these duties to an extremely high standard for the last 28 years,” said  Anthony Kirby, Serco Group Chief Executive. “We now have the opportunity to modernize the fleet of support vessels to ensure that the Navy has the support it requires, day in, day out, to enable it to keep our waters safe."

The largest of the three contracts, valued at approximately £850 million ($1.1 billion) over ten years is for the delivery of in-port services for the Royal Navy’s bases at Devonport in Plymouth, Portsmouth, and for the Clyde, including Faslane. Services will include vessel towage, passenger transfer, and barge and tank cleaning services at Portsmouth and Devonport.

As part of the port services contract, Serco has agreed to obtain 24 new vessels on behalf of the Royal Navy. They will be brought into service over the next decade to modernize the fleet and replace the older vessels currently operated.

A second contract is valued at approximately £110 million ($146 million) for the provision of offshore support to military training and exercises. This includes two specialist ocean-going vessels for regional and worldwide support.

The company will also provide inshore support to military training and exercises at the British Underwater Test and Evaluation (BUTEC), an underwater military test and evaluation range off the northwest coast of Scotland, and for Diver Training Support. This is in a third contract valued at £70 million ($93 million) over five years and also includes new work for Range Safety and Aircrew Training, which we will deliver in partnership with Briggs Marine.

The unions have not commented on the finalization of the renewal of the contracts.