A NEW £2.4 billion contract equipping the UK Armed Forces with ammunition will sustain 4,000 jobs around the UK over 15 years – including 355 jobs in the North East.

The Next Generation Munitions Solution (NGMS) will see BAE Systems manufacture 39 different products for the Army, Royal Navy, RAF and Strategic Command to use on the frontline.

This will include small arms ammunition, mortars, medium-calibre gun rounds and large-calibre artillery and tank shells.

As part of the contract announced by the Ministry of Defence today, BAE Systems will invest £27 million into refurbishing and upgrading the manufacturing lines at the Washington site.

The Northern Echo:

The contract will see BAE produce approximately 100,000 large calibre rounds, 40,000 medium calibre rounds, 75,000 mortars and 70,000,000 small arms ammunition rounds a year.

The Ministry of Defence announcement follows the £16.5 billion settlement for defence over four years which the Government says will modernise the Armed Forces and bring jobs and prosperity to every part of the UK.

Defence Minister Jeremy Quin said: “This vital multi-billion-pound contract will provide our service men and women with fire power on the frontline for years to come whilst investing in British industry, British jobs and British infrastructure.

“Defence underpins hundreds of thousands of jobs across all four corners of the nation, including the North East.

"Ongoing investment is crucial as we work together to build back better and stronger from the Covid-19 pandemic.”

The Northern Echo:

An estimated 1,260 people will work on NGMS in engineering, operations and supporting roles across five BAE Systems UK sites.

Alongside the 340 jobs at its Washington site and 15 jobs at Ridsdale there are 555 jobs in Monmouthshire, 320 in Cheshire and 30 jobs near Glasgow.

A further 1,500 roles will be supported along the supply chain alongside 1,300 jobs as a result of consumer spending in local economies.

BAE Systems also aims to recruit over 200 apprentices and graduates over the contract.

Glynn Plant, managing director of BAE Systems, Land UK, said: "This contract secures the UK's future within the munitions industry and provides the opportunity for BAE Systems to invest in its people, processes and facilities.

"This represents a welcome boost to the local and national economy an demonstrates confidence in the UK and our world-class manufacturing abilities."

The Northern Echo:

Replacing the current MASS (Munitions Acquisition, the Supply Solution) single-source contract from January 2023, NGMS will deliver about 50 per cent, by value, of the MOD’s total general munitions (GM) portfolio which the MoD says will maximise military capability and reduce cost.

The MOD said the new contract will offer better value for taxpayers’ money as it includes incentives for BAE Systems to make savings over the life of the contract.

In its bid, BAE Systems identified about £400 million of savings and efficiency opportunities to be pursued up to 2038 to meet this challenge.

The contract also includes flexibility to vary the volume of orders and allow GM products to be added or removed, depending on frontline requirements.

Ed Cutts, DE&S (Defence Equipment & Support) Director Weapons, said: "This new, improved contract with BAE Systems secures the supply of cutting-edge key munitions for the front line while delivering even greater value for money for the taxpayer.

"We look forward to continuing our collaboration with BAE Systems to deliver on the opportunities this partnership and agreement present."

As it delivers the munitions, BAE Systems forecasts it will spend £350 million with UK-based companies on raw materials and machine components.

The contract will invest more than £70 million refurbishing and upgrading manufacturing lines, including £12 million at Radway Green and £32 million at Glascoed, South Wales.