Babcock takes additional charge against Type 31 frigate programme

HMS Active was floated off at Rosyth in March 2026. Babcock is taking a GBP140 million charge against the Type 31 programme owing to design changes and re-work affecting the first two ships of the class. (MoD/Crown Copyright)

Babcock has taken a further financial hit on the Royal Navy's (RN) Type 31 Inspiration-class frigate programme as a result of design changes and re-work impacting the first two ships of the class.

The GBP140 million (USD187 million) charge, disclosed in a 13 May 2026 trading update, is the latest in a series of cost escalations to impact the five-ship Type 31 delivery programme, and takes the company's cumulative losses on the order to over GBP300 million.

Babcock - leading the Team 31 industry consortium with partners Thales, OMT and BMT - was in November 2019 awarded a GBP1.25 billion fixed-price contract by the Ministry of Defence (MoD) to deliver five frigates based on the Arrowhead 140 design. The class is being built at a new shipbuilding facility established at the company's Rosyth site in Fife, Scotland.

Reporting the GBP140 million non-recurring charge against the contract in a post close trading update for the financial year ending 31 March 2026, Babcock said the cost increases reflected higher than expected levels of re-work to first-of-class HMS Venturer resulting from changes to the design, and the long-term impacts of out-of-sequence build activity at earlier stages of the programme. “Whilst the number of such rework events is not entirely unexpected, the work is being performed in the later stages of completion and therefore is more complex and more costly,” the company said. “The ability to enable the work to be performed to support increasing levels of programme productivity has also been impacted.”