The Ministry of Defence have published a report detailing regional expenditure with UK industry and the supported employment of that expenditure.
The report presents MoD expenditure with UK industry and commerce in 2019/20 by UK region and industry group.
“The number of direct and indirect jobs supported by this expenditure in the UK is also presented. The statistics include direct MOD expenditure with UK industry and commerce only, and exclude all other MOD spend types. It is estimated that MOD expenditure supported 202,000 FTE jobs in the UK in 2019/20 which is equivalent to 1 in every 130 jobs. This figure includes both direct and indirect jobs so accounts for employment through direct supplier payments as well as that arising through the supply chain.”
The report states that it is just over 6% higher than estimates for 2018/19 when 190,000 jobs were supported.
Parts of the UK with the highest spend, in order, are as follows.
- South West
- South East
- North West
- East of England
- East Midlands
- West Midlands
- Yorkshire and The Humber
- North East
- Northern Ireland
The report advises that The South West had the largest increase of MOD expenditure in absolute value, and despite already being the region receiving the largest proportion of MOD expenditure, this was still an increase of almost 7% from 2018/19.
“Scotland, the North West, the South East and the West Midlands also saw substantial increases in regional expenditure of over £200 million each in 2019/20 compared to the year before.
Scotland is the only UK region to have seen an increase in year-on-year spending in each year since 2013/14. Compared to the previous year, Scottish expenditure increased by almost 15% in 2019/20 and its regional total now accounts for a little over 10% of all MOD expenditure with UK industry. This was driven principally by increased in-year payments to BAE Systems Surface Ships Ltd relating to the manufacture and demonstration phase of the Type 26 frigate programme out of the company’s Glasgow shipyards.
London observed the largest reduction in total expenditure in absolute terms from 2018/19 to 2019/20 where it fell by £365 million. After holding steady around the £1.5 billion mark for the previous three years, this fall places the region’s expenditure at its lowest level over the period between 2013/14 and 2019/20. This was predominantly due to a reduction in payments for Aircraft and Spacecraft, and Technical, Financial and Other Business Services.”
MoD Expenditure by Region 2019/20
The above is a horizontal bar chart showing MOD’s regional expenditure in descending order for 2019/20. The South West and South East appear first and second respectively, accounting for over half of all UK spend.
“The South of England received 52% of MOD expenditure in 2019/20 and has consistently received over half of total spend in each year from 2013/14 onwards. It is perhaps not surprising that this collective area of the UK is the dominant recipient of MOD spending since a high proportion of the MOD’s biggest suppliers can be found in the South East and South West of England including Babcock, BAE, Rolls-Royce and Thales, among others.
The largest single in-year contract payment in 2019/20 was with Devonport Royal Dockyard Ltd at £734 million. Although for the most part operated out of the main Devonport site in Plymouth, this contract saw work further contracted to Scottish shipyards. The contract’s combined work on the Maritime Support Delivery Framework ensures the continuing support of the Royal Navy’s surface fleet, including the two Queen Elizabeth class aircraft carriers.”
The report advises that this single contract payment itself was greater than the amount spent in Yorkshire and The Humber, the North East and Northern Ireland combined.
“The disparity in spending between regions is such that for every £1 of MoD expenditure in 2019/20, 28 pence effectively went to the South West whilst less than 1 pence went to each of the North East and Northern Ireland.”
MoD Expenditure per Person with UK Industry by Region 2019/20
Below is a map of the UK split by region showing MOD expenditure per person in 2019/20. Even after adjusting for regional populations, the South of England still shows the highest expenditure levels.
According to the report, London falls to 9th place in Figure 4 from 5th in Figure 2 (which displays total expenditure) due to its high population density. Wales, in contrast, historically ranks higher when expenditure is adjusted by population.
“However, after increasing by 11% the year before, expenditure in Wales in 2019/20 fell by 18%. This wasn’t necessarily due to contracts beginning or ending but a combined effect of lower in-year payments to the region, showing the nature of the inherent variability of contract data. Coupled with an increasing population, this led to a decrease of almost £70 per person. With the exception of Wales, four of the top five ranked UK regions in 2019/20 for MOD expenditure per person all saw considerable increases to their regional expenditure. Outside of this grouping, only the West Midlands saw a substantial increase in spending between 2018/19 and 2019/20.”
The additional spend for the West Midlands was driven by increased payments to Babcock DSG Ltd for fleet management, repair and maintenance services of military vehicles and weapon systems.
Key Points from the report
|£20.3bn||Total MOD expenditure with UK industry and commerce.|
|This is a 3% increase on 2018/19’s reported expenditure after adjusting for inflation.|
|£300||MOD expenditure with UK industry for each person living in the UK.|
|With inflation accounted for, this figure has remained the same for the fourth year in a row.|
|202,000||Total number of direct and indirect jobs supported through MOD expenditure with UK industry.|
|This comprised of 125,000 direct jobs and 77,000 indirect jobs in 2019/20, up from a combined total of 190,000 the year before.|
|1 in 130||Proportion of all direct and indirect jobs in the UK which are supported as a result of MOD expenditure with UK industry.|
|This remains unchanged from 2018/19.|
|77,000||Total number of direct and indirect jobs supported in Technical, Financial and Other Business Services as a result of all MOD expenditure with UK industry.|
|Total MOD expenditure supports more jobs in this sector than in any other industry group.|
|22%||The rise in direct jobs supported from MOD expenditure in Scotland since 2018/19.|
|Increased expenditure on Construction and Shipbuilding in Scotland helped to boost total direct jobs supported in the region in 2019/20.|
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