BAE Systems awarded £1.3bn submarine contract

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The UK Ministry of Defence has awarded BAE Systems a contract for the delivery of the fifth Astute Class submarine, taking the total value for work on the vessel to £1.3 billion.

The contract covers the design and remaining build, test and commissioning activities on Anson, the fifth of seven technologically-advanced submarines in the class. Manufacturing commenced in 2010. Anson is now at an advanced stage of construction at BAE Systems’ site in Barrow-in-Furness, Cumbria and on schedule to leave for sea trials in 2020.

The contract was announced by Philip Dunne, Minister of State for Defence Procurement, during a visit to BAE Systems. He said: “[The contract] is a key part of our £166 billion plan to ensure that our armed forces have the equipment they need to defend the UK’s interests across the seas, in the skies and on land, both at home and abroad.

“This new contract for Anson not only provides significant financial savings of £50 million to the taxpayer but also secures thousands of jobs in Barrow and across the UK supply chain, demonstrating the Government’s commitment to increase defence spending each year for the rest of the decade.”

BAE Systems employs more than 7,600 people in its submarines business, including those working on the Astute programme. Boat six Agamemnon and the yet-to-be named seventh are also under construction in Barrow.

Astute class submarines mark a step change in defence capability. Powered by a nuclear-reactor, each of the submarines will provide land strike, strategic intelligence-gathering, anti-submarine and surface ship warfare capabilities.

BAE Systems is also leading the design phase on the programme to replace the current fleet of Vanguard submarines, which carry the UK’s strategic national deterrent.

In readiness for the start of construction on this programme, its site is undergoing significant redevelopment with new facilities to be built alongside the refurbishment of others.

BAE Systems’ submarines business spent £2,589m with its supply chain between 2008 and 2014, 90% of which was in the UK. The submarines business currently has a workforce of 7,600 and has this year recruited more than 300 apprentices.