Chapter 1 - Finance

Industry & Employment

This section provides data on the impact of MOD's spending on equipment and services in the UK. Table 1.9 details the estimated amount of money that the MOD spent with UK industry broken down by industrial group from the cash accounts. Table 1.9a provides data for 2002/03 onwards against slightly different industry groupings due to the introduction of Resource Accounting and Budgeting. These numbers have been derived from administrative systems which use Resource Account Codes. The industrial groupings are based on the UK Standard Industrial Classification (SIC) 1992 and 2003 maintained by the Office for National Statistics (ONS). Table 1.10 provides estimates of UK employment dependent on MOD expenditure and defence exports. Tables 1.11, 1.11a & 1.11b provide estimates of the number of direct full time jobs in the Government Office Regions of England, Scotland, Wales, Northern Ireland and the UK as a whole, supported in industry and commerce by MOD direct expenditure. Table 1.12 details MOD payments on PFI projects during 2007/08 whilst Table 1.12a lists those PFI projects which have planned unitary charge payments of over £25 million in 2008/09.

Main Findings

Expenditure by Industry Group (Table 1.9a)

  • In 2006/07, the MOD spent some £16.5 billion with UK Industry. The 'manufacturing' industries (section D) attracted nearly 50% of MOD expenditure with UK Industry. The single industry group attracting most MOD expenditure was Aircraft and Spacecraft (around 12% of the total).

Defence Related Employment (Tables 1.10 & 1.11)

  • Estimated employment in UK industry and commerce dependent on MOD expenditure and defence exports has fallen slightly from last year to around 305,000.

  • Regional employment directly dependent on MOD expenditure is concentrated in the South East (38,000 jobs) and the South West (37,000 jobs). Scotland, Wales and Northern Ireland account for just 11,000 jobs (7%).

MOD PFI Projects (Table 1.12)

  • The PFI projects against which the highest payments were made in 2007/08 were Allenby/Connaught, Attack Helicopters Training Service - Apache, Colchester Garrison, Defence Fixed Telecommunications Service (DFTS), Main Building Redevelopment (MBR), Skynet 5 and the Tri-Service White Fleet.