MOD unveils £850m spending plans to keep warships and submarines at sea

The MOD has announced plans to award £850m of new contracts to defence suppliers supporting the readiness of the Royal Navy.

Defence Procurement Minister Maria Eagle announced the plans which will allow 39 companies the opportunity to bid for contracts over the next seven years.

Speaking to BFBS Forces News at a factory in the West Midlands, the minister said the announcement is designed to "allow smaller companies the chance to engage more directly with the MOD" and for the MOD to have "a better chance of competition" from the awarding of contracts.

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The scheme is aimed at keeping the Royal Navy's warships and submarines operational and at sea.

Across the framework, between a third and a half of the suppliers are based outside the south of England with the majority being Midlands or north of England-based, with additional suppliers in Scotland and Wales.

But the announcement comes ahead of the outcome of the Government's ongoing strategic defence review.

Defence spending

The question being asked is should businesses like the family-run Somers Forge – where the minister was visiting and which has been making propulsion shafts for the Royal Navy since 1912 – be worried they may suddenly be asked to cut costs or have their contracts scrapped altogether?

Ms Eagle dismissed this idea, saying: "The strategic defence review is about an overall strategic look at what we do and how we do it for the next period given the threats that we face as a nation."

She added: "This is about contracting for things like spares, things like repairs, post-design and tech support in kit that we have already got.

"I don't think that those who are on the framework should worry too much about the strategic defence review."

When asked about the National Audit Office (NAO)'s warning from last year that the MOD's equipment budget is underfunded by £16bn, Ms Eagle says those plans were designed by the previous government.

She added that there is also an ongoing spending review and that the Government is committed to "a path to 2.5% which means more money for defence over time".

The MOD said this latest announcement will enhance economic growth across the UK and that more than a third of the companies benefiting are based outside the south of England.

It added that the Royal Navy benefits by having improved access to spare parts and specialist technical advice, as well as reducing costs without compromising safety.