Cheap Does Not Mean Affordable - Why The Royal Navy Sold the PEACOCK Class
The Royal Navy PEACOCK class patrol vessels were an unusual class
of ship, built for a unique role. Built in the 1980s and intended to serve in
Hong Kong to provide maritime security and support to the local government, they
have found themselves serving in a more varied range of waters, from the balmy waters
of the Philippines to the cold waters of the Irish Sea. Now entering their
fourth decade of service, these ships were only in Royal Navy for use for less than
15 years, but had events transpired differently, could potentially have served
for a lot longer under the White Ensign.
Files held in the National Archives have revealed that in the
early 1990s, the leadership of the Royal Navy was, at the very highest levels,
incredibly keen to keep the ships in use after the handover of Hong Kong, but politics
in the Naval Staff and financial challenges meant that this was not to be. This
short blog is about the forgotten 1990s battle between the Naval Staff to save
the PEACOCK class for the Royal Navy. It is a fascinating insight into the
costs of naval operations, and opens a window on the often forgotten and unglamorous
world of small ship operations during the 1990s, which in turn remains relevant
to this day.
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PEACOCK Class - Crown Copyright |
Hong Kong had long been a major base for the Royal Navy,
with the dockyard and support facilities at HMS TAMAR acting as the last major
outpost of the fleet ‘East of Suez’ after the withdrawal of the fleet from Singapore
in the early 1970s. During most of the Cold War the 6th Patrol Squadron
was based there, comprising five modified TON class MCMVs intended to provide a
local patrol capability. Their role was to assure sovereignty, support law
enforcement and customs operations and provide a limited level of defence to
this tiny outpost. They were not intended to mount a genuine defence against invasion,
but they could provide some littoral capability to support, train and mount a capable
maritime constabulary presence in the region. In many ways they were the RIVER
class OPV’s of their day – lightly armed and perfect for the role.
By the early 1980s though these ships were getting long in
the tooth and needed replacement, to provide future maritime protection to Hong
Kong. The decision was taken to build five replacement hulls from Hall Russell
in Aberdeen, builders of the ISLAND and CASTLE class OPVs, which would then sail
to Hong Kong and be permanently based there. Uniquely unlike other vessels built
for the Royal Navy, these ships were mostly funded by the Hong Kong Government,
with HMG only paying around 25% of the ship’s costs. This was to become an
issue in years to come.
A total of five ships were ordered to provide one-for one
replacements for the TON class. The design was unique in the Royal Navy for
several reasons. At some 62m long and displacing 750 tonnes, they were slightly
longer than, but barely half the displacement of the ISLAND class OPV used to
conduct fishery protection around UK waters. Fully air conditioned inside to
cope with the tropical climate, they were able to carry RIBS and boarding parties
drawn from the Royal Marines, as well as diving decompression chambers to support
diving and recovery operations. Most uniquely, they were tonne for tonne
probably the most heavily armed warships in the Royal Navy, carry a 76mm Otto Melara
gun mount, plus machine guns. This marked the only time that the RN has ever
used this design of 76mm gun, despite it being ubiquitous in global use throughout
the 1970s and 80s on a range of corvettes and OPVs. Traditionally the UK has tried
to maintain a clear split between lightly armed patrol vessels and bigger warships,
using a 30mm or 40mm gun, so the 76mm represented both a significant increase
in firepower, and introduced a range of complex logistical support challenges
too.
By 1984 the class had sailed and arrived in Hong Kong where they quickly settled into life in the colony, conducting a range of patrols, ‘flying the flag’ and providing a platform from where a generation of young officers would carry out fleet time training. The author has met many naval officers who look back very fondly to their time in Hong Kong as YO’s on the Squadron, which provided a unique way to begin their naval career. But it was a time that was rapidly ending…
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Northern Ireland Squadron hull Crown Copyright |
The decision taken to hand Hong Kong back to China in 1984 meant
that UK rule would end in 1997. By 1988 the decision was taken to pay off two
of them (SWALLOW and SWIFT), selling them to Ireland after barely 3 years’
service in the Royal Navy. The remaining
three hulls were to continue in RN service until 1997, when they would be
between 12-13 years old, but there was no plan to run them on past the handover
of the colony. The reason for this was that the Hong Kong government, which had
paid the lions share (75%) of the cost, and which to all intents ‘owned’ the
vessels for operational purposes, would make the decision on their disposal. Instead,
it was assumed that they would be decommissioned and disposed of as part of the
general run down of the garrison.
This assumption held true throughout both the 1991 ‘Options
for Change’ and ‘Front Line First’ defence cuts of the early 1990s as the Royal
Navy was gutted in size after the end of the Cold War. With a glut of former
vessels available, often very young, now surplus to requirements, there was simply
no need or requirement to retain the PEACOCK class in service. In early 1995
though that assumption was questioned by the MOD which led to work to assess
their value to the Service as a whole.
Following a visit to Hong Kong by 1st Sea Lord,
the Commander British Forces Hong Kong (Maj General Dutton) wrote to DCDS Commitments
(Lt Gen Harley) and noted:
“During his recent visit to Hong Kong, the First Sea Lord
mentioned that the MOD are reconsidering the future of the Hong Kong patrol
craft and that their retention in service with the Royal Navy is now being run
as an alternative assumption. As a result I closely examined the cost
implications such a decision would have. I believe I should now place on record
the apparent overall benefits for the MOD as a whole”.
The letter goes on note that there was significant complexity
around the disposal of the ships, due to the funding arrangements of the design.
Much as the Hong Kong government had paid 75% of the costs, it would be entitled
to 75% of the revenue of any disposal receipts should the ships be sold on to
another buyer. It was estimated that the ships had an agreed final value of
£9.52m and that after the disposal of the ships, whatever the amount raised, the
MOD would pay the Hong Kong Government £7.14m to reflect its agreed share of
the receipts. The letter noted: “If the craft are sold to a foreign buyer,
the MOD will gain a net receipt of £2.38m”.
It was noted that the PEACOCK class were excellent craft and
extremely useful for a range of defence tasks. The letter noted:
“As I am sure you are aware these vessels have proved
their worth on countless occasions in Hong Kong in both routine patrolling of Territory
waters and also in the interception of smugglers and illegal immigrants. A
similar role can readily be envisaged for them in enforcing fisheries policy in
UK waters and in relieving the pressure on the Fleet elsewhere where sophisticated
frigates are not required. They also provide excellent training platforms for
Young Officers who can be entrusted far greater training responsibilities onboard
than may be the case on larger vessels”.
The letter also warned that disposal was not an automatically
easy option. Were they only to be sold at the last minute, then the stores for
the ships would have been returned to the UK, with some 65 ISO container loads
of equipment required for them. The author noted that the cost of sending the supply
chain back out to the new buyer would likely cost more than the receipts of the
sale in the first place.
Finally, the key point was made – due to the nature of the funding
arrangement, there was an opportunity here to acquire ships for the Royal Navy long
term at an extremely cheap value. If the UK government chose to ‘buy’ the
ships, essentially by paying the Hong Kong Government the £7m it was entitled
to as a receipt, and forgoing the planned budget receipt of £2.3m, it would
effectively acquire three highly capable ships for very little money. On paper
this was the deal of the century, providing three ships at seemingly practically
no cost and bringing them on to the Royal Navy’s books, enabling it to use them
as it wished. Why wouldn’t you do this?
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OCEAN WAVE Handover - their last hurrah in RN Service. Crown Copyright |
With this idea now in circulation, in early 1995 the Naval
Staff began running the costs of the ships and trying to work out what to do with
them. In March 1995, the Director Naval Plans (Cdre Meyer RN) provided a loose
minute to the Assistant Chief of the Naval Staff (ACNS) setting out the opportunities,
and costs of bringing these ships into wider Royal Navy use. This memo was
supported by a deeper analytical paper that had done a ‘deep dive’ on the
military roles and operations that the craft could fill, and in turn their
potential utility.
The memo began by making clear that there was no such thing
as a ‘free lunch’. Previously the ships had been heavily funded by the Hong
Kong Government, but once in RN use, the Service would be on the hook to pay
for them. It noted that several different
options had been considered for the ships use out during the 10 year ‘Long Term
Costings’ period when the MOD was doing financial planning. This began in 1995
and ended in 2005, and was done on the assumption that the ships would come onto
MOD budgets from 1997 onwards.
The specific options considered for employment, in both the
detailed paper and the memo sent were as follows:
Replace HUNT class on fishery protection duties: This
option was considered to enable removing the HUNT class from this role,
increasing the operational capability of the MCMV force. But it was noted that
there were no specific needs for this, and that compensating savings would need
to be found to fund the cost of bringing the ships onto the books.
BRNC Navigation: BRNC used to have a navigation
training platform, and at the time this was being done by HMS ORWELL. The
challenge was that this role had only recently been handed over to ORWELL by
HMS WILTON and there would be no real operational advantages of a further
change by putting a singleton hull in on the role instead.
In addition, the papers noted that ORWELL had a better
bridge and was more suited to conducting navigation training than a Peacock
would be. When added to the fact that ORWELL could be used as a stand in for
the Northern Ireland Squadron, it became clear that using a PEACOCK in this
role would not represent value for money.
NI Squadron: All three ships were looked at with a
view to becoming part of the Northern Ireland squadron, replacing three of the
four RIVER class on this duty. It was rejected though as it would put mixed
classes on duty, causing an increase in costs and losing a key benefit of
consolidating the Squadron into the RIVER class in the first place.
The Royal Navy role in Northern Ireland is a fascinating and
little understood part of the history of OP BANNER, and to this day remains little
known. The deeper analysis paper provided a helpful summary of the Squadron and
its role, noting that it:
“comprises Operations GRENADA and INTERKNIT, the former
being an offshore interception and search task and the latter being an in-shore
operation in Carlingford loch. GRENADA essentially needs a vessel with good
seakeeping qualities with a turn of speed when required. INTERKNIT needs a
shallower draught vessel to operate within the Lough and launch/recover RIBS
and reasonable sea keeping qualities for the transit back to Belfast. Speed is
less important but the ability to carry an RM detachment is essential. Both
these tasks are carried out by 4 RIVER class patrol craft which have recently
been modified to the same standard and replaced the BIRD class. Replacement of
the RIVERS by the PEACOCK class in 97/98 would produce a faster craft with
better seakeeping, a slightly larger complement and mounting a 76mm rather than
a 40mm gun; the 76mm may need replacing as it is too large for the INTERKNIT
task… The RIVER class is perfectly adequate for the task, if a little slow. In
the current security situation, it is more likely that forces will be reduced rather
than increased. There is also the aspect of having to pay off another class
having just converted them (cf SIRIUS and ANDROMEDA).”
Falklands / WIGS: Deployment on these tasks was
considered, but it was noted that “PEACOCKS have good seakeeping qualities
for their size, but they are unsuitable for sustained operations in areas prone
to extreme weather conditions. They cannot operate helicopters and lack
military capability for anti-drugs tasks’.
The deeper analysis was equally damning on their suitability
for this role as well. It noted that the work in the Falklands required vessels
with long rang, good seakeeping and good accommodation, all of which the PEACKOCKs
lacked. At half the displacement of a CASTLE, they would have found working in
the region very difficult.
In the West Indies it was noted that although the ships were
very effective in calm conditions, they lacked the ability to operate with helicopters,
long range radars and most importantly the ability to operate away from a
support base. It was also recognised that they would probably need two on
station to avoid long transits across the Atlantic regularly, and also shore
basing too, making any deployment costly. When added to the reduced capability during
hurricane season, it becomes clear that these ships would not be of much value
in these tasks and would cost a great deal to operate.
Gibraltar / URNU / Coastal Patrol. It was looked at
whether these ships could replace the existing craft doing this local work, but
it was assessed that “in comparison to the craft they could replace for this
work, the Peacocks are over-elaborate and costly”.
The deeper dive paper examined the value of the ships in
maritime counter terrorism support, although it was clear that this role was of
decreasing importance: “Recent indications from the Security Services have cast
some doubt on the efficacy of this operation and the DoE has discontinued payment
for this policing operation, although it is likely to remain a dormant task which
could change with the international terrorist situation. OPVs derive valuable
experience from familiarisation with the offshore tapestry of energy platforms
which in turn improves their readiness to act as FOBs for Counter Terrorist forces.
The PEACOCK class would be marginally less suitable by virtue of size and seakeeping
than an ISLAND vessel, and much less suitable than a CASTLE with its flight
deck.”
Another task looked at was OP MUSKETRY, which was a task for
vessels on the Clyde to conduct patrols against intelligence gathering vessels
from hostile states. The paper noted that:
“This is a dormant Directed Task to conduct surveillance
of intelligence gathering platforms in the Clyde Approaches… Although there has
been no evidence of intelligence gathering for some time, the appearance of the
Trident SSBNs could attract renewed attention from the Former Soviet Union as
well as Peace Groups and environmentalists. RMAS ROYSTERER replaced HMS
SENTINEL as Clyde Support Vessel from Apr 1992… There may be a requirement for
a military vessel to resume responsibility for the role as part of a plan for
military and civilian surveillance coordinated with the GOLIGHTLY shore surveillance
facility and the MOD police. This would, however, be expensive in terms of
Service Manpower and it would not be a full time task.”
In addition to these roles, analysis was undertaken of assigning
the craft to the URNU task, recognising that with the closure of RNEC Manadon,
there would be an increased need to take students to sea. It was recognised
though that the ships were far too large for the needs of the URNU; “One
could buy 7 new URNU patrol craft merely for the pay/back loss of receipts of 3
Hong Kong Patrol Craft”. Having been
in the URNU at the time this would have
been proposed though, the author would attest that going to sea in a PEACOCK
class would have been a lot more fun, and stable than a very wobbly P2000!
Wider training was also considered too, with suggestions
being made that the ships be used to form a training squadron. Again though, the
lack of funds, sheer cost and existence of other vessels made this a nonstarter
of an idea.
RNR: There was an analysis that looked at whether the
ships could take on an RNR training role, but there was no operational need or
requirement for it, particularly as this came at a time when the RNR was being
rapidly downsized and moved away from seagoing roles. It was also briefly
looked at using the ships for an MCM Tasking Authority platform, which would
have seen RNR staff embark, but again it was realised that this role was
already done using spare capacity on the Hydrographic squadron, and no military
need existed for it.
Wartime Roles & Extended Readiness: Putting the
ships into extended readiness (e.g. Reserve) for use in wartime was looked at as an option,
but it was noted that: “In the event of a direct threat to the UK, the peacocks could undertake a range of
activity including MCMTA, NCS (Naval Control of Shipping) and Coastal Policing
/ Defence tasks (Comment – essentially what the RNR did in Cold War). Current
plans in this eventuality are to take craft up from trade and redeploy existing
units. This is a cost-effective approach which avoids incurring Extended Readiness
costs.”
Considerable deeper analysis was paid to trying to work out
what the contingency war role of the ships would be in the UK. In the early
1990s the RN was in a state of flux, having abandoned its Cold War era roles
and quickly shed its wider infrastructure to protect ports and anchorages and
control shipping. The paper identified that in the mid-1990s there were four
specific tasks for the Royal Navy in home waters to be filled.
Firstly, there was the need for Defence of Ports & Anchorages
during transition to war. It was seen as likely that there would be risks to
the homeland, which could include “intelligence gathering, insertion of
Special Forces, civil unrest, covert mining and scuttling”. The RN planned
to meet the need to defend ports by using the Archer Class, patrol vessels,
RMAS platforms and ships taken up from trade. It was seen that the PEACOCK
class would be ideal platforms for this work.
Coastal operations would also be conducted with two Archer
class conducting coastal patrols and the ISLANDS being used to carry out offshore
work, including oil rig protection. The PEACOCKs were seen as being ideal for
this sort of work.
Naval Control of Shipping was also crucial, and is an often-forgotten
part of the Royal Navy’s Cold War planning. Carried out by the RNR for the most
part, it was the process of during wartime forming shipping into convoys,
coordinating its safe transit across the Atlantic and then into ports to
discharge troops and cargo. After a nuclear strike, it would have been
invaluable in finding safe ports for shipping to use. According to the analysis
the ISLAND class would have been used as coastal convoy escorts in this role
(although one does wonder the efficiency of these slow armed trawler designs in
that role), and reckoned that the PEACOCKS would have been excellent too.
MCM Support was a final driver, with the ships being looked
at to take on the work done by the CASTLE class to act as platforms to support
MCMV operations in their war stations. It was noted that plans existed for the
CASTLEs to “conduct very limited defensive and protective minelaying provided
the capability is made available in war”. While noting that the PEACOCKS
could not carry out this task, they could potentially be used as an MCMV command
platform, although they lacked the spaces to embark a staff, making their credibility
limited.
The result of this analysis then was to conclude that the
PEACOCK class would have been brilliant in wartime roles to defend the UK. The
problem though was that the enemy had gone away, there was no threat to defend
against and putting them in extended readiness at a cost of some £18m would be
a waste of money for ships that would potentially never be used in that role. Far
easier in crisis times to take more ships up from trade than try to bring ships
that had been languishing in reserve back into service. This was part of the
problem – the PEACOCKS were ideal wartime platforms at a time when there were
no wars to be fought.
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RIVER class MCMV |
This summed up the reality of this case. The cost of
spending money on ships that didn’t have a place in the constrained RN of the
1990s operational plans. Even though they would only have cost £9m to bring
onto the MOD’s books, the annual running costs would have been considerable. The
Plans team worked with CINCFLEET to assess the annual running costs of each
hull as being £1.7m per year, based on £700k personnel costs, £150k stores, £450k
maintenance, £90k fuel and £400k refitting. For all three ships this would have
provided a £5.3m in year pressure, or over the course of the LTC, around £46m
in running costs that had not been budgeted for.
This highlights the challenge with looking at trying to
extend or run on ships (or other military equipment). The headline cost may indeed
have been easy and a small cost to absorb or write off. But the long term costs
are always a lot higher. In the context of 1995, when the RN was in a budgetary
challenge, short of cash and under headcount pressure too, finding an
unexpected nearly £50m in your planning budget across multiple lines, to run on
ships for which there was no credible military role identified did not seem
effective or sensible.
The memo ended with a salutary note:
“The Peacock class are capable and popular and at first
sight the craft appear to have considerable. However as the list of possible
options shows, there are no peacetime tasks for which the vessels have an inherent
advantage over other types in current service. Use of the craft for Fishery
Protection duties would enhance MCM OC but at significant additional cost to
the Programme.
Against the background of continued pressures on the Programme
and noting that there are higher priorities in the Navy Grouping than MCMV
enhancement, purchase and use of the Peacock class does not represent good
value for money and is not recommended. Consequently, unless an affordable case
can be made in LTC96, which, at the moment, seems unlikely, the current
Programme assumption, disposal, should stand”.
There was some pushback within the Naval Staff against this
proposal. There also followed a series of memos using evidence and experience
to try to undermine the case of the Plans paper. It included suggestions that: “There
are two points of fact that I would take issue with – firstly the statement that
their seakeeping qualities are marginal for GRENADA (Clyde tasking). These
vessels have proven very adequate in the often hostile environment around Hong
Kong, and we would certainly not be considering the case for their introduction
to the Fishery Protection environment, which is far more demanding than
GRENADA, if their seakeeping was a concern. Secondly, we cannot claim that they
are too large for OP MUSKETRY (small boat ops in NI), in the past we have used
RFAs.”
The Naval Operations Directorate also pushed the case for
the PEACOCKS, with a memo noting that they had seen the suggestion that the ships
would be unsuitable for use in the Fishery Protection role due to the strong sea
conditions. They in turn spoke to the Irish Navy who had noted that:
“The Staff Operations Officer (previous CO) of the Irish
Navy reports that ORLA and CIARA ex-SWIFT and SWALLOW are employed in fishery
protection and drug interdiction operations from 0-50 miles off the Irish coast.
The ships operate in sea state 6-7 and launch RIBS in wind force 6, sea state 4-5…
The Irish Navy have found the ships to be very suitable and capable of fishery
protection and drug interdiction tasks and of operating in the Atlantic including
on their West coast. The high speed of the vessels has also been very useful.
They already knew of the sale of the vessels and the Defence Attache reported
much interest in purchasing another one”.
A strong intervention was led by Cdre McNally, Director
Naval Staff Duties writing back in response that “I regret I cannot support
your recommendation to ACNS and 1SL that disposal is the best option for these
vessels. I would need to see considerably more evidence that loss of small
craft flexibility involved by the planned sale is worth any putative marginal financial
benefit.”
But despite this valiant rearguard, the numbers spoke for
themselves. The PEACOCKS found themselves in the position of being highly
regarded platforms which did not have a role to go to. In a time of budget cuts
and pressures, the Royal Navy felt that it could not afford the roughly £50m required
to run the ships on for a further 10 years, as there was no specific role that
they could go to that wasn’t already covered. The result was that the three
ships were sold to the Philippines in 1997, and they remain in service to this day.
Rearmed with a 40mm cannon in place of the 76mm and classed as light corvettes,
the three remaining ships, now 40 years old are continuing to serve in a
challenging operational environment.
If you look at the journey that the Royal Navy has taken since 1995 many of the tasks considered for the PEACOCKS then have either fallen by the wayside, with the Northern Ireland Squadron being disbanded, and BRNC navigation training ship scrapped. The RN now has permanent ships on station in the West Indies and Falklands far larger (roughly 4 times the displacement) of the PEACOCKS, and they contain flight decks which were seen as utterly vital. Ironically, the key role for which the ships could have been valuable, but was seen as not being necessary due to the lack of threat, namely providing a wartime contingency for coastal operations, is now back in vogue. That said, it is impossible to see any scenario where the RN would have paid millions every year to leave the ships quietly floating in reserve against this contingency, and in reality they’d have been scrapped years ago had they been retained.
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Ex SWALLOW/SWIFT under tow for scrap 2024 |
The saga of the PEACOCK class matters to this day because it
highlights the pressures and decisions that the Royal Navy has to make which to
outsiders may appear strange or illogical. There are plenty of ‘armchair admirals’
who love making fantasy fleet lists, or typing online arguments and roles for retaining
ships and ship classes for all manner of roles. But these arguments do not consider
finance and the reality of overstretched budgets and solving problems across
many costing periods.
The RN today is facing similarly huge budgetary challenges,
with reports indicating that due to a combination of reasons accrued over recent
years, it now faces a massive in year financial challenge to balance the books,
while it prepares too for another SDSR. The sorts of memos sent by different
parts of the Naval Staff in 1995 are doubtless being written again, with the challenges
of balancing off the need to deliver on operations being balanced off against
the need to make the plan affordable and not bankrupt the Navy, or the nation
in the process. It means that when you see decisions made to pay ships off
early, or not run them on for different purposes, a similar type of analysis
will have been conducted trying to work out what ships do, what their value is
to the Royal Navy and what the best outcome is – and why cheap does not always mean
affordable.
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