£1bn contract extension aims to ensure Army is equipped for new global threats

Defence giant Babcock International, which directly employs more than 10,400 people in the South West, has secured a five-year contract extension worth around £1bn with the Ministry of Defence.

Babcock said the move would play a key role in modernising the Army and would further support the Government’s the Defence Industrial Strategy, which aims to improve value for money in the MoD while increasing military spending and growing the economy.

It was announced shortly before Chancellor Rachel Reeves delivered her Spring Statement, which seeks to use the £2.2bn leap in defence spending in 2025-26 as an effective way of triggering economic growth.

Babcock, which operates from more than 60 sites across the South West – including Devonport, the largest naval base in Western Europe, and a major base at Filton, Bristol – already builds new vehicles for the MoD, supports the Royal Navy fleet and trains the Army’s soldiers.

The extension builds on and extends Babcock’s 10-year contract with the MoD’s Defence Support Group (DSG), which is responsible for the storage, maintenance, repair and overhaul of military vehicles and equipment, including a fleet of more than 30,000 vehicles ranging from quad bikes to main battle tanks, plus equipment ranging from generators to weapons.

Over the five-year extension, Babcock will “deliver a comprehensive range of support capabilities for the Army in the UK with global reach”.

This will include “improved readiness, regeneration and asset management services”, Babcock said, and will maximise the availability of critical Army equipment while delivering increased value for money.

Under the contract extension, Babcock will continue to invest in its 1,600-strong workforce in more than 20 sites across the UK, including skills development and an apprentice scheme.

Defence Secretary John Healey MP said: “Tanks, armoured vehicles and kit are the backbone of the British Army.

“We are taking action to ensure the outstanding service men and women of our armed forces are properly equipped and ready to respond to ever-changing global threats.

“Supported by largest sustained increase in defence spending since the Cold War, this substantial investment with Babcock demonstrates how defence is an engine for growth: supporting businesses of all sizes and sustaining more than 1,600 good, well-paid jobs across Britain.”

Babcock chief executive officer David Lockwood added: “In a period of increased global instability, more is being expected of our armed forces.

“This contract extension ensures that Babcock continues to provide the Army with the tools to do its job, when and wherever they are needed.

“Our know-how, application of technology and extensive experience in the land domain help ensure that the Army is ready to fight and win wars.”