The Ministry of Defence and the Treasury gave conflicting public signals over the £1 billion New Medium Helicopter contract with Leonardo earlier this year, a select committee member has said, in an exchange that exposed friction between the two departments over one of the government’s most prominent helicopter programmes.
Putting the question to Minister for Defence Readiness and Industry Luke Pollard, a committee member said the contract had been announced by the Treasury in February as agreed with the full support of the Ministry of Defence, only for the MOD to be reported separately as having deprioritised the capability.
“Perhaps it speaks to a less than fully functional relationship between the MOD and the Treasury,” the MP said, asking whether both departments had in fact been content with the deal and why the Treasury had announced something the MOD did not appear wholly enthusiastic about.
Pollard confirmed the department had procured 23 new medium helicopters from Leonardo under the billion-pound contract, and that timing had been a factor in the decision. “The validity of the bid that Leonardo had placed was coming to an end, and that would mean that if we delayed beyond that point we’d have to either restart the procurement, or we would be carrying significant risk,” he said, adding that the government had renegotiated substantial elements of the deal rather than simply accepting the terms it inherited.
Those changes included a commitment from Leonardo to base its defence helicopter exports out of Yeovil, which Pollard called “a significant move,” and to make the Somerset site the company’s centre for autonomous helicopter production, building on the government’s earlier investment in the Proteus autonomous helicopter programme. UK content in the helicopters for export has also risen substantially, from around 8 per cent under the previous government’s procurement to a figure Pollard said now sits close to Typhoon standards, in the 40s per cent.
“I think ideally big decisions like that would be taken as part of the defense investment plan, but as the timetable for the new medium helicopter decision and the defense investment plan were not aligned, it was necessary to take them out with that decision,” Pollard said, adding that since the contract was announced the government has awarded a Defence Technical Excellence College to Yeovil and increased places at Yeovil College.
Chief Secretary to the Treasury Lucy Rigby, who was not in post when the contract was agreed, said she understood the decision was about investing in a key industrial site and maintaining an area of strategic UK advantage.
“The difficulties with it stem from the fact that it didn’t align with the dip timing, and therefore an earlier decision was necessary,” she said, “but I think the decision that was arrived at was the right one for the reasons that I’ve set out.”
I know they are not the same but with wildcat being cut early surely we should be looking at more of these, I mean £1billion for 23 and built in the UK is a bargain.
Sensible suggestion if there’s going to be a very real reduction of utility capacity with the cuts of the Army Wildcats.
Surely Wildcat could fill some even if not all of the requirements? Or would that be too sensible an option?
Wildcat presumably cut to pay for it, so yet again, Defence budget used to subsidise Dept of Trade.
Given the age and recent losses of helicopters in non combat instances, shouldn’t we be looking to renewing the fleet anyway?
And before the comments about Helicopters and Ukraine appear, even back line and peace time movements with Helicopters is worth their price, as well as the maritime bases they’d be utilised from.
It’s a side benefit that jobs would be supported, but most of all, it would up resilience if things ever hit the fan.
Not big enough. This was supposed to be an interim replacement for the Puma, with a view to buying the Bell MV-75 Cheyenne II when that’s available in the early 2030s.
It was supposed to be an interim helicopter but now we are stuck with a new helicopter design with limted export potential and high unit costs. Licence build the UH60 if you wanted to keep the work at Yeovil. Instead there’s the development cost and risk of new helicopter is sitting on the balance sheet. Entirely avoidable expenditure which the money could have spent on something that added capability to armed forces
The way I read it is that the Treasury was keen to get the economic benefits of Leonardo in Yeovil: jobs and tax revenue- but the MOD didn’t see Puma replacement as a high enough defence priority to jump up the DIP funding.
Seems a sensible suggestion for a useful sized helicopter. Aren’t real helos still needed behind all the drones? Even to transport drone teams and supplies up to or into and around a battlefield?
Replying to Fostersman. Seems a sensible suggestion for a useful sized helicopter. Aren’t real helos still needed behind all the drones? Even to transport drone teams and supplies up to or into and around a battlefield?
My first post delayed. Sorry for double up.