Is there a business case in existence for the announced ‘National Flagship’?

23rd June 2021

When the proposed new national flagship was announced, there were a number of odd things about the announcement.

(Please see this earlier post on this blog, especially the many highly informed and insightful comments beneath.)

One thing which seemed especially odd was that it was announced by the prime minister’s office – and the only mention of the royal navy or of the ministry of defence was that navy would crew the boat.

There was no mention – explicitly – of which government department would pay the procurement/commissioning of the ship – nor of which government department would be responsible for its envisaged thirty years of maintenance and repair.

As a former central government public procurement lawyer, this seemed strange.

The announcement seemed, well, just flimsy – the shallowest of press releases.

Since then it has become obvious why the announcement was so flimsy.

The reason is that the thinking behind the announcement also has been flimsy – if it can be characterised as thinking at all.

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As the Sunday Times has now reported:

‘The Cabinet Office, which was originally asked to devise the plans, the Department for International Trade, which was originally expected to benefit from them, and the Ministry of Defence, which has now been saddled with the project, are all in the dark about where the money is coming from, not least because the MoD is fighting to plug a £16 billion black hole in its annual budget.

[…]

“‘Another official confirmed: “The royal yacht is a complete and utter shitshow. When it was first floated, the PM wanted it to be built in Britain. It was given to [Cabinet Office minister Michael] Gove to sort out, but it became clear that under procurement rules it could only be built here if it was a navy thing with a bunch of fake weapons on board. So Gove passed it on to the MoD. The Treasury stayed out of it.’

None of this is a surprise; indeed, all of this can be inferred just from a close critical reading of the original announcement.

Anybody with even the most basic awareness of public procurement would realise that if this was a civil (non-military) project, there could be no legal restrictions as to which tenderers would be considered.

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Now the Guardian is reporting:

‘Downing Street has backed down from insisting that the Ministry of Defence should foot the whole bill for new royal yacht Britannia in a Whitehall row about the funding of the £200m vessel.

[…]

‘The Ministry of Defence (MoD) is resisting being lumbered with the cost of the project at a time when it is trying to fill a £16bn backlog in its equipment budget.

‘On Monday, Downing Street indicated that the yacht would be paid for out of the defence budget, with a spokesperson saying: “The procurement process, which is being done through the MoD, will reflect its wide-ranging use and so it will be funded through the MoD.”

[…]

‘No 10 then clarified on Tuesday that the MoD would initially only pay for the procurement process, and that the rest of the costs has not been allocated.

‘A Downing Street spokesperson said: “This is a ship that will promote UK trade and drive investment back into our country. So we expect any costs of building and operating the ship will be outweighed by the economic benefits that it brings over its 30-year lifespan.”’

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This is what public policy-making and decision-making looks like when it is made up as it goes along.

The most plausible explanation is that nobody in government has a clue about how to go about the procurement exercise for this boat.

I am not a lobby journalist – and so I can add not other telling quotes from insiders, but I can add something.

Prompted by the announcement, I thought I would make a freedom of information request.

I made the request to the cabinet office, on the understanding that the cabinet office was the department responsible for that announcement of national flagship – and that was also the department that would deal with freedom of information requests for the prime minister’s office.

And today came the response to the request.

The cabinet office does not possess a business case for the national flagship – even though it was the department that announced it.

This odd situation can perhaps be explained as follows, either:

– there is a business case held in Downing Street, but my request clumsily missed it;

– there is a business case held in Downing Street, but the cabinet office has given me false information;

– there is a business case for this announced procurement, but it is held in another government department and has not been shared with the prime minister’s office or the cabinet office; or

– there is no business case, despite the public announcement.

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What we do know is that a business case should always precede a procurement exercise – and so the fact that a government department may then handle the procurement exercise does not mean that the business case is then created.

That would be to put the dinghy before the boat.

Business cases precede procurement exercises – and should determine whether there is a procurement exercise or not.

The reasonable suspicion of anyone following this daft exercise is that there is no business case – and that this prestige procurement was announced without any preliminary thought whatsoever.

And now the government cannot back down.

And this is how £200 million (at least) is to be spent by the government.

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POSTSCRIPT

I have now found this fascinating parliamentary answer – there appears to be no ‘assessment’, only ‘discussions’.

I have set out further information from answers to parliamentary questions in this thread:

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17 thoughts on “Is there a business case in existence for the announced ‘National Flagship’?”

  1. Was it Cummings, D who said recently that Downing Street writes the Press release first, and then thinks up the policy later on? Or not?

    The aim is to get through the next 24 hours and the measure of success is headlines and their electronic equivalents.

    We are governed by press officers, it would seem, who by their nature are failed journalists, as any real hack knows.

  2. “Trouble with Winston: he nails his trousers to the mast and can’t climb down.”

    Clement Attlee commenting on Churchill’s intransigence towards the reform of British rule in India.

    Finally, Boris Johnson reveals that there is a touch of Churchill about himself, but only on a trivial matter.

  3. As a former UK diplomat, who has done trade work overseas, my professional opinion is that it would be almost impossible to build a convincing business case for a “Royal Yacht”. There is no possible way to produce convincing evidence that the vessel will “drive investment” back to the UK. What influences investment anywhere is a stable business and legal regime, sensible tax policies, competitive advantage and an identifiable and accessible market. Not cocktail parties on board a ship or any other form of flummery.

  4. Your blog is excellent, I do keep asking myself again and again, why the mainstream media do so little of this sort of clear factual devastating commentary on these circus acts of Johnson and Co.
    Thank you again.

  5. Perhaps the education department should pay for it, and then line up primary school children on the deck to wave union flags and sing nice songs about One Britain.

    This is probably a stupid question, but what stops the UK government from restricting a civil (non-military) project to UK tenderers?

    1. First, find a UK company skilled in building such a vessel.

      It would appear from our previous discussion on here that no such business exists.

      There are shipyards that specialise in this line of work in the Netherlands and Germany.

      HMY Mary was the first Royal Yacht of the Royal Navy. She was built in 1660 by the Dutch East India Company. Then she was purchased by the City of Amsterdam and given to King Charles II, on the restoration of the monarchy, as part of the Dutch Gift.

  6. We hear from the Health Secretary (who has obviously had time to study the matter in depth while performing his other duties) that this yacht ‘will pay for itself many, many times over.’ Not just many times, but many, many times. There’s your business case.

    1. this yacht ‘will pay for itself many, many times over.’ Not just many times, but many, many times. There’s your business case.

      Ah – recycling the case for Brexit.

      That’s very green of them…

  7. This may be deemed a somewhat parochial argument, but I am outraged, as a citizen of southwest London who is one of 100s of 1,000s whose lives have been turned topsy turvy by the closure of Hammersmith Bridge, that Johnson is seeking to spend £200M for a permanent floating honeymoon pad rather than fix a bridge which is a critical part of London’s transport infrastructure.

    1. Another SW London resident here and it may sound parochial but it is just symptomatic of this Governments approach to infrastructure and investment.

      Hammersmith Bridge is a battle between Government, the Mayor and Hammersmith and Fulham council. Local residents elected Lib Dem and Remain. Putney and Hounslow voted for Labour MPs and suffer increased traffic and congestion.

      If the government were serious about green issues they would be taking advantage and setting a standard for urban living, sustainable public transport walking and cycling but of course they aren’t so the story will run on like so much else that DAG highlights in his excellent blog.

  8. Ah! Business cases – why they are not eligible for the Booker Prize, I don’t know. And as for ‘robust’ business cases, they should be set to music. Or on fire.

    Business cases tend to be justifications, designed to prove something rather than decision-making tools. You start with the cost and then come up with ‘assumptions’ that make the project look feasible. A local government – not my authority, I’m glad to say – once showed me a business case based on the assumption that the community building could be hired out 07:00 – 23:00, seven days a week. In reality, it was hired out for about nine hours a day, Monday to Friday. The result: shortfall that had to be plugged.

    The other element of the business case that I would like to see is the revenue costs – those are what should make or (in this case) break the project.

    The sad thing about this is that it is about mediocre politicians (pardon the flattery) wanting something to make them look important – but which is of no practical use. The Royal Family appears to have distanced itself from the proposal – they don’t need a yacht to look important, they can do it without assistance. And I say that as somebody who would gladly retire the Royal family.

    1. A recent Antiques Road Trip included a visit to the docked HMY Britannia at Leith.

      The museum’s representative had a figure handy for how much trade the royal yacht had helped to create over its active life and an opinion about how much use a replacement vessel would be for UK commerce.

      Bare bones of a business case?

      1. Possibly. It would depend on whether you trusted the figures. (I rarely do – I check supermarket receipts!)

        As ever, it will be difficult to prove that the Royal Yacht actually ‘created’ the trade. There could be other factors at play that are far better value.

        And is it the ‘yacht’ that makes the difference or the ‘royal’?

  9. Whenever anyone in my family was struggling with a concept and failing to grasp it, the cry would go up ‘My brain is in a bucket!’
    Now one could use this phrase with this government – the only problem being that it requires a brain to be present in the first place…….

  10. A nationalist government bribing its loyal supporters to stay loyal with their own money, and mine. That’s the business case.

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