BAE to start production on the Royal Navy's Type 26 global combat ship next year

The Ministry of Defence (MoD) is expected to confirm on Friday, 4 November, that it will go ahead with the £8bn ($9.98bn) contract to build new frigates for the Royal Navy. Defence Secretary Michael Fallon is expected to announce the same at a shipyard in Scotland, according to reports.

This is expected to give a boost to BAE Systems, with whom the MoD had signed a contract in 2015. As part of last year's defence review, BAE was contracted to build eight Type 26 global combat ships. The British defence company is expected to build the same at its shipyards in Scotland.

The contract has faced multiple delays since being signed. Fallon had as recently as in June said that work on the warships will not go ahead until it was offered a "value for money" proposition. This had then led to protests by unions who warned that such delays could not only lead to job losses but also cause a costly erosion of shipbuilding skills.

Unnamed sources cited by the Financial Times added that while Fallon may not give an exact date as to when the work will actually start, he would confirm that the work will go ahead. This is said to indicate that the MoD has accepted that BAE has reduced costs on the programme to the best extent that it can. It is also said to assure trade unions that the jobs of their members are secure.

GMB, a general trade union in the UK, said that BAE's Clyde shipyard in Scotland, where these warships are expected to be built, has 2,700 direct employees or contractors. The shipyard is also said to support an additional 6,000 positions indirectly. Unnamed union sources, cited by the Telegraph, said that this announcement could assure the availability of work in the yard until 2034.

The sources also said that both the MoD and BAE had agreed to cut the first steel for construction of the frigates in 2017. This was originally due to be cut this year.

These warships are expected to come into service in 2020. They are said to replace the Royal Navy's existing Type 23 frigates.