Ministry of Defence invests £3.2bn in the Royal Navy
Ministry of Defence has awarded £3.2bn of contracts to Babcock and BAE systems, securing about 7,500 jobs at the UK’s naval bases in Devonport, Faslane and Portsmouth.
The engineering support services firm, Babcock, which manages naval bases in Faslane and Devonport, secured a £2.6bn contract. Whilst engineering firm, BAE systems was awarded a £600m contract.
Babcock said: "This new contract enables us to continue to do what we do best - that is to provide continuity, reliability and increased value across the range of activities and services we deliver."
The contracts will ensure both firms undertake the maintenance and repairs required to upkeep the Royal Navy’s 56 warships and submarines.
First Sea Lord Admiral Sir George Zambellas made a statement in which he referred to the contracts as a “significant” representation of “a strategic investment in the Royal Navy’s essential infrastructure.”
"Without the stalwart and tireless support provided by each of the three naval bases ashore, the ships and submarines of the Royal Navy would not be able to deploy as a credible, strategic and global presence at sea."
The announcement has been made shortly after 1,700 shipbuilding jobs were lost last year at Portsmouth’s naval base.
The investment is estimated to secure around 4,000 jobs in Devonport, 2,000 jobs in Portsmouth and around 1,500 jobs in Faslane.
The MoD said that the deal "represents excellent value for money for the MoD and the UK taxpayer with over £350m of savings secured".
However, not everyone has responded positively to the news. Labour has criticised the conservative government for tactfully announcing "existing and previously proposed contracts" during the Tory party conference.
At 11:27 on Wednesday, Babcock’s share price edged down 0.46% to 1,087.00p per share. BAE systems’ share price also recorded a slight drop in price, showing a decrease of 0.36% to 469.81p per share as of the same time.