MoD inspectors to assess economic impact of any BAE shipyard closure

The Ministry of Defence is sending a delegation of inspectors to assess the future of BAE Systems' historic shipyards in Portsmouth and Scotland.

The Independent on Sunday revealed in January that BAE has hired LEK Consulting to examine options for the three shipyards, including the possibility of shutting one, at a cost of thousands of jobs.

BAE bosses are concerned that there will not be enough work to sustain all three yards once the £5bn contract for two 65,000 tonne super-carrier warships comes to a close in the next few years.

LEK is not expected to conclude its work until next month, but the MoD is bound by a contract with BAE to fund the cost of any closure. This could result in the taxpayer shelling out hundreds of millions of pounds, as well as hurting the local economies in either Portsmouth or the Clyde, where the other two shipyards are located.

It is understood that the MoD team, which is composed of around eight senior figures from British business and industry, will visit Portsmouth tomorrow and the Clyde at the end of the month. They have been asked to submit a report to the MoD on the likely impact and costs of closing the dockyards and other options that BAE might explore, such as looking for more international contracts.

Gary Cook, the GMB trade union representative for the south coast, said: "I am somewhat surprised that there has been no consultation over all of this with the GMB, as we represent our members' interests. Our working agreement with BAE is based on mutual trust and no surprises, and the fact that people are looking at the financial, economic and human impact of a closure is a surprise."

Mr Cook is also a member of a lobby group that has been created since The IoS broke the news that there may no longer be enough work to keep all three dockyards operational.

Should Portsmouth close, that would end 500 years of naval shipbuilding in the city.