The Government is poised to finalize a £1 billion contract with helicopter manufacturer Leonardo, ending months of uncertainty for the company’s Yeovil plant in Somerset. The deal involves the purchase of a new fleet of defence helicopters and marks a significant investment in the UK’s aerospace sector.
The Treasury, led by Chancellor Rachel Reeves, is understood to be preparing for formal approval of the contract. A Treasury spokesperson emphasized that Reeves is committed to safeguarding national security while bolstering domestic job growth, stating, “This project is key to those principles – she wasn’t going to let this deal collapse under her watch.”
The intervention by Chancellor Reeves, alongside Labour leader Sir Keir Starmer, came amid reports that the Ministry of Defence had deprioritized the project within the Defence Investment Plan. Notably, Defence Secretary John Healey’s planned visit to officially award the contract at the Yeovil facility was canceled last Thursday, adding to the uncertainty.
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Leonardo, an Italian aerospace company with a major plant in Yeovil, employs approximately 3,300 staff and collaborates with nearly 12,000 UK suppliers. As the UK’s sole end-to-end rotary wing manufacturer, the company’s future in the region was reportedly at risk without this deal. CEO Roberto Cingolani had previously warned that failing to secure the contract would jeopardize the firm’s long-term viability in the UK market.
With Leonardo as the sole bidder, the offer is set to expire by the end of Sunday unless formally accepted.
Trade union Unite, representing thousands of aerospace and defence workers, hailed the decision as a “tremendous victory” for the industry and local employees. General Secretary Sharon Graham said, “Unite has campaigned for this Government to buy British defence for over a year because it is vital for jobs and skills as well as national security.” While welcoming the approval, she criticized the prolonged uncertainty that left workers uninformed until the last moment.
Both Leonardo and the Ministry of Defence have declined to comment at this time.