Dunne Review: Defence spending drives UK economy

Land July 10, 2018

A new independent report commissioned by Defence Secretary Gavin Williamson has been released revealing the crucial role of defence to the British economy.

Former government defence minister, Philip Dunne, was commissioned by the Defence Secretary after the launch of the Modernising Defence Programme (MDP) to strengthen the Armed Forces in the face of intensifying threats, alongside the Prime Minister and the Chancellor.

The review of defence’s contribution to national economic and social value examined the breadth of the Armed Forces and industry to provide an in-depth picture to inform proposals for reform into the MDP.

The defence industry makes a huge contribution across all regions of the UK whether as a major employer, a large investor or as a hub for local communities. The Ministry of Defence is the third largest landowner in the country with 220,000 hectares often benefiting remote and rural communities.

The report reveals that around 500,000 people support defence across the UK. It outlines that the UK’s defence industry is one of the world’s strongest with an annual turnover of £22 billion supporting 260,000 jobs and is one of the largest employer of apprentices with over 25,500 currently enrolled.

The report also includes a number of recommendations for review, including further research into the impact of significant procurements on national prosperity; building on the strong relationships with industry suppliers; and considering how the UK’s world-leading institutions could be given greater entrepreneurial freedoms.

Mr Dunne also acknowledges that, in addition to the MOD budget of almost £37 billion, defence’s direct contribution to GDP features over an average of £7 billion of exports generated each year. Last month saw a shipbuilding contract worth up to £20 billion signed between BAE Systems and the Australian government for British-designed Type 26 frigates – the biggest Naval defence contract for a decade.

Defence is also driving investment in British industry through the National Shipbuilding Strategy, which was launched last year to transform the UK maritime industry and boost the prosperity of regions, shipyards and maritime supply chains across the country. The MOD is also set to launch a Combat Air Strategy to ensure Britain maintains a world-leading combat air capability.

Mr Williamson said: “Philip Dunne’s review shows how vital defence is, not only protecting us from global dangers and safeguarding our national prosperity, but also to our economy by creating thousands of specialist and highly-skilled jobs and creating billions in exports.

“He paints a clear picture of how defence and defence industry reaches every corner of the UK and is central to employment in so many cities and towns.

“He lays down some key challenges to consider as our Modernising Defence Programme continues to ensure defence is the best it can be in a post-Brexit Britain.”