Despite pressures on defense spending Britain is committing billions of pounds to two important but disparate programs.
The first is for continued management of its Atomic Weapons Establishment plc facilities, which are central to the country's nuclear deterrent, the submarine-based Trident missile system.
Britain's Ministry of Defense announced it has reached agreement with a company that operates and manages the sites used in warhead development to continue to do so for another five years at a cost of $1.57 billion annually.
In the second, funding for the future Armored Fighting Vehicle pipeline, including the Specialist Vehicle program, has been guaranteed – at a cost about $8.6 billion over the next decade.
"We welcome the announcement by the Secretary of State for Defense confirming that the SV program is secure in the MoD's future AFV pipeline and core program of committed funding," said Sandy Wilson, president and managing director of General Dynamics UK, the prime contractor on the program.
"This is great news for the soldiers who will use SV; it is great news for the UK supply chain involved in designing and manufacturing SV; and it is great news for General Dynamics UK in South Wales and validates General Dynamics' continued investment in the United Kingdom."
The company benefiting from the decision for continued management of nuclear weapons facilities is AWE Management Limited, a joint venture of U.S. headquartered Jacobs Engineering Group Inc., Lockheed Martin and Serco, and which has an existing 25-year award for managing the sites.
Britain's Ministry of Defense said the agreement will allow additional investment in skills and facilities at the company's sites in Aldermaston and Burghfield in Berkshire.
About 40 percent of the $7.85 million is for essential capital projects, including production and research facilities.
"The Atomic Weapons Establishment is a center of scientific and technological excellence, with some of the most advanced research, design and production facilities in the world," said Defense Equipment, Support and Technology Minister Peter Luff. "This investment … will help maintain 4,500 jobs and a key capability, which is essential for our national security."
Jacobs Engineering President and Chief Executive Officer Craig Martin said, "Working in partnership with the Ministry of Defense, we have successfully overseen and managed the delivery of services by AWE plc in support of the U.K.'s nuclear weapons program for a number of years and look forward to continuing to make a key contribution to its mission, together with our partners Lockheed Martin and Serco."
Martin's satisfaction with the agreement was duplicated by General Dynamics over funding for the vehicle program, which it called the "core component of Force 2020," the British Army's future force vision. Production of medium-weight armored fighting vehicles will not only benefit the nation's soldiers but also Britain's economy.
A recent audit study by Ernst & Young indicates the SV program would generate total economic output of more than $15.4 billion, with a corresponding Gross Value Added of nearly $7.4 billion.
General Dynamics UK is establishing a Center of Excellence for Land Systems in Wales as a result of the program and has signed contracts and subcontracts with companies operating in England and Scotland for vehicle systems and components.