Some of the staff working for Serco, the private contractor that provides tugs and other in-port services at the Royal Navy’s three main bases plan to strike in February. The industrial action has mainly been triggered by concerns about job losses as the MoD negotiates a new contract with Serco.
Background
Serco vessels are primarily employed at naval bases in Portsmouth, Devonport, and Faslane. There are also Serco facilities on the Clyde and at the Kyle of Lochalsh that support the British Underwater Test and Evaluation Centre (BUTEC). Tugs that assist with ship and submarine movements are the most high-profile part of the Serco fleet which also includes a variety of other vessels, such as fuel, water, sullage, tank-cleaning, and ammunition barges, as well as range safety and pilot transport boats. Additionally, larger vessels like SD Northern River and SD Victoria provide logistical and some operational support to the RN overseas. The distinctive black-and-white SD vessels deliver a unique and vital service to the RN and are an integral part of the infrastructure required for an effective navy.
In 2007, the Royal Maritime Auxiliary Service (RMAS) was dissolved, and the MoD signed a 15-year, £1.2 billion Private Finance Initiative (PFI) contract with Serco Denholm Marine Services Limited for the Future Provision of Maritime Services (FPMS). Serco took over the remaining vessels and, between 2007 and 2010, invested approximately £130 million in 29 new vessels. (Serco bought out its partner Denholm in 2007, but the SD prefix for its ships was retained.)
The FPMS contract expired in 2022. Although private contractors serving the MoD have a mixed record of success, this has arguably been a rare example of a successful partnership. Over the 15 years of the contract, Serco’s fleet of around 100 vessels completed 165,000 operational tasks and 330,000 maintenance tasks with a 99% performance success rate. This is not a ‘pay-as-you-go’ contract: if the RN occasionally requires additional harbour movements beyond the planned amount, there is no extra cost to the taxpayer. A service level agreement ensures flexibility, with the RN’s requirements taking priority but Serco can also assist with commercial vessel movements when capacity allows, with profits from this work shared with the MoD.
The FPMS contract was initially expected to be replaced by another long-term agreement, including funding to renew ageing tugs and other vessels. (This potential opportunity for UK ship and boat builders was included in the 2022 refresh of the National Shipbuilding Strategy.) However, the MoD deferred this expenditure, opting instead for the short-term £200 million Continued Provision of Maritime Services (CPMS) contract signed in December 2022. This stop-gap agreement runs for 27 months (expiring in March 2025), with an option to extend for another six months (expiring in September 2025).

Hard ball
As the MoD struggles to balance its budget and the CPMS agreement nears its end, it is believed to be negotiating hard with Serco for the next 10-year deal. Sources suggest the MoD aims to save around £250 million over the contract’s duration by reducing service levels. With RN hull numbers having declined and operational activity significantly lower than in 2007, the demand for in-port services has naturally fallen. Additionally, more ships being forward-based overseas further reduces the need for these services. Serco’s fleet now comprises 91 vessels and employs about 600 people. The Prospect union, which represents approximately 150 of these employees, believes there will be up to 96 redundancies.
While reducing service levels may provide short-term financial savings, it could undermine the ability to respond to spikes in RN fleet activity. Reducing staff numbers is easier than recruiting and training new personnel when demand increases. The MoD has stated that a strike by Prospect union members will not affect operational activities, though non-urgent work may be delayed. More broadly, it is vital that the next Maritime Services contract is agreed soon and offers the same excellent service level the RN has enjoyed until now as well as containing the provision to fund new vessels.
Should be in-house anyway.
How exactly do you want to bring it in house at this point
Slowly take over the duties serco do, one by one. I know it isn’t easy but that doesn’t mean it is impossible.
It’s not a priority, or even on the list. Seeing as they’re haggling over renewing this contract I hardly see them putting in the time and effort to bring these back under RN or RFA
it was RMAS
Impulse and Dexterous with a Canadian sub which left its hatches open in rough seas
There must have been genuine cost savings to privatising it. Not sure how much actual competition there is. It feels like Serco is just an umbrella organisation that manages the relationship with the government in terms of contracts and then they purchase / create the smaller companies that employee the specialists / ex government employees to do the same role with weaker terms and conditions.
Is it right to assume that Taskings have dropped considerably over the 15 year period used here ? It’s not as if we had a “Growing Navy” in that time frame.
That’s true but this isn’t the first reduction in staff during that time frame. This will impact service, it’s a very short term solution to something that needs investment not cuts.
Please don’t get me wrong, I was just thinking out loud about all the cuts in general. I seem to recall a huge argument when the large Tugs were axed a few years back, can’t really recall much about it or what happened but it did cause a lot of discussion. Do you recall ?
R class Ocean going tug were the largest tug in service. there were 3 of them and they removed from service in early 2000’s if I remember correctly
Yup, but the movements there are, are of substantially larger ships.
A QEC is 65,000t against 20,000t for an Invincible.
T45 is 8,000t as opposed to 4,000t for T42 – depending on batch.
T26 is 7,000t as opposed to 3,500t of T23 – launch weight.
The figures may be a bit out but everything has supersized and so a one tug job is now a two tug job…..
Serco have purchased large more powerful tugs to cover this, SD Tempest which come into service in 2017 being an example
Ok but RN and RFA activity levels are at an all time low.
As the Destroyer fleet completes PiP and the frigate fleet rebuilds with FSS coming online activity levels of large ships are going to rise sharply.
Whilst it seems a clever short term cost saving reducing crew numbers we all know the long term costs of regenerating capability and knowledge are enormous.
Unless of course you are a disciple of New Labour who believed that anyone could do anything with a few weeks training….
Supportive Bloke
Totally agree that regenerating this capability once lost – especially the very skilled job of driving any size / type of tugboat – would be extremely difficult.
Also, as the Editor quite rightly says, it has to be said that Serco have done a pretty good job with this contract over the past fifteen years.
However, overall, you are quite right with your assessment of the “changing circumstances”.
Thus the situation with the RN is very similar to that in the Merchant Marine:
Thus, today, many fewer port movements: but – when a move does occur – it needs more powerful tugs
So, meanwhile, over in the civilian merchant marine:
Thus, today, there are far fewer civilan tugs in and around UK waters than there were, lets say, about thirty years ago.
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However, with the many other support services that Serco also provide – so water, fuel bunkering, ammunition handing etc – is it not time that the RN started seriously looking at better / alternative land based solutions?
Many of the naval ship moves in Portsmouth and Devonport appear to be very short moves between the varous different types of RN jetties
However, in marked contact, thesedays many big commercial ports have pipelines fitted directly into their quaysides – so they can pipe fuel, bulk water etc straight onto the ship alongside (ie whilst it is being unloaded and loaded)
Even 11kV shorepower is increasingly becoming available in the commercial world. This reduces, or even avoids, the need to run the ship’s generators and thus reduces both costs and also the quantity of airborne pollution
(PS …..so, it might be a very good idea to hook up a T45!).
Even ammunition – which used to have to be “handled with extreme care” – is, more often than not these days, quite inert and thus more intrinsically safe to handle (i.e. insensitive munitions = after all, its now UK defence policy that one can’t go around hurting people with dangerous explosives!)
So, I would suggest the RN keeping the fleet of bigger tugs
However the RN really ought to be reviewing the many other “logistics services” and then, possibly (but obviously only if it is practical to do so), replacing some of those small specialist ships with new, and more efficent, land-based infrastructure on bigger, and probably more efficent, quaysides.
Peter (Irate Taxpayer)
PS About your controversial political point…..New Labour didn’t train and upskill Brits to do jobs = they just imported immigrants……. so many that we have now run out of houses fo fit them all in……and thus we have now almost run out of hotels….
14 years of illegal migrants my friend was the responsibility of the immediate past government
Is your calendar some how gone up smoke in the Barrow fire ?
These are the numbers for non asylum visas between 2015 and 2022
Bit too late to cry some rivers for the last 9 months
A constant force, acting on a particle of mass m, will produce a constant acceleration a, the x-axis to be in the common direction of F and a. What is the work done by this force on the particle in causing a displacement x?
The newer tugs also have a crew of 4 vs a crew of 5 for the older ones. As apart of the contract the MOD can also request that Serco bring extra boat’s into service as required.
This is unlikely to be a priority for the government because defence just isn’t a thing for them.
Very sadly so.
Trashing the economy was the first priority and they have achieved that already. It puts the KamaKwasi budget into perspective.
If they had any sense and growth was front and centre they would have announced a raft of growth measures day 1 to placate the markets and build confidence. Unfortunately there was no plan for growth just hot air.
Instead paying off train drivers [ridiculous given there is no shortage of applicants] and junior doctors [without reforms] and pouring money into NHS [without reforms] created a huge hole.
Now these idiots are going to say that there is no money so defence can’t have an uplift….crazy in these times….this will be worse for defence than Osbornes slash and burn as the whole shipbuilding strategy [which is just starting to work] and the blue suit and RN recruitment issues need to be solved yesterday.
Planet Normal podcast had an interesting interview with an economist (not Rachel from accounts) a couple of weeks ago which looks at the reality about the KamaKwasi budget TTK may end up in court.
I expected them to deal with the RFA in a much more positive light due to it being a union dispute and totally agree with the rest of your comment. My memory may be a fault here but the 18% pay rise that Maggie gave the forces in 79 or 80 had a positive impact on recruitment and the economic positive of defence if equipment is priduced is somewhat undervalued.
Energy price guarantee and the unfunded tax cut promise wrecked the public finances first
To remove opposition the head of HM Treasury Sir Tom Scholar was sacked, Truss in her leadership campaign wanted to remove Bank of England independence and the Office of Budget Resposibility OBR was instructed by Kwarteng not to produce their normal forecast and analysis with his mini budget
After the reverses on unfunded tax cuts only the cut for £13- 20 bill pa Health Social Care levy remained.
The average inflation rate in the UK in 1979 was 13.39%.to put that into prospective
I would have thought the new Labour government would have sorted the RFA issues promptly, having had deep conversations about the issues and solutions before the election, which they used to attack the previous Conservative government. The Treasury, it appears, have refused to help the MOD funding the RFA and all that has happened is that the can has been kicked down the road. This has bought the new RFA Commodore some time for reforms. He is a decent guy, but industrial action will be an issue again in the summer / autumn if a path to recovery is not forthcoming and the Treasury don’t support the survival of the RFA.
Trashing economy and slashing defence was done under the long years of austerity and the parade of PMs .
Truss just added her own twist on interest rates – which were just as high before the election as now
Now isn’t the time to cry a river after 14 years of abominations on defence cuts