Defence group Babcock in Scotland boosted economy by £370m and supported 6,000-plus jobs in year to March

Defence giant Babcock boosted the Scottish economy by £370 million and supported more than 6,000 jobs in the year to March, according to a new report.

The FTSE250 firm has revealed the independent research by Oxford Economics on its positive impact on the economy, saying the study shows that it is supporting levelling up across the UK “by investing and supporting employment in the most deprived areas” while also highlighting its “critical” role in the country’s defence sector. Babcock was found to have across the UK boosted gross domestic product (GDP) by more than £3.3 billion directly and indirectly, and supported 56,800 jobs, with more than 22,000 employed across 264 sites, and shoring up a further 34,800 across its nationwide supply chain.

In Scotland, it saw in excess of 3,500 people directly employed, including more than 3,100 at its naval dockyards at Rosyth and HMNB Clyde at Helensburgh (also known as Faslane) providing “critical” services to the Royal Navy, with a further 2,800 roles buoyed in supply-chain firms. Babcock was found to have in Scotland paid £150m to workers and at least £50m to suppliers, with more than 150 graduates and apprentices training to become high-skilled workers. Rosyth specifically helped to boost Scotland’s coffers by £370m while supporting 6,300 jobs.

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It was also calculated that across the UK the group spent £1bn with more than 5,700 suppliers, including £230m with 1,070 companies in deprived areas, and dipped into its pockets to the tune of £337m with 2,200 small and medium-sized enterprises. Babcock added that overall, for every £100 it spends, and every 100 workers it employs directly, it supports a further £198 contribution to GDP, and about 160 additional jobs.

The firm was found to have supported 6,300 jobs in Scotland, including more than 3,500 directly employed, in the year. Picture: Peter Devlin.

Babcock chief executive David Lockwood said: “The extent of our positive impact on the UK is evident in the amount we directly contribute to Britain’s defence capability, and the value this adds throughout our extended supply chain. We are proud to be supporting the [UK] government’s levelling-up agenda, helping to spread prosperity across areas of the UK that have been worst affected by unemployment and the cost-of-living crisis”.

Reminder

UK Defence Secretary Ben Wallace said: “This report serves as a timely reminder of the contribution defence industry makes to UK prosperity. Our national security depends on our ability to produce and support critical elements and capabilities onshore, but we also have a responsibility to ensure this investment unleashes the immense social value potential of the sector. I am pleased Babcock are taking a thorough approach to understanding their wider economic value.”

Separately, fellow London-listed defence giant BAE Systems has enjoyed stronger sales as countries increase military spending amid the war in Ukraine. The FTSE100 company, which builds ships, submarines and fighter jets, reported £18bn in orders secured in the first half, and a further £10bn since.

Babcock says 48 per cent of its UK workforce comprises highly skilled engineers and technicians. Picture: contributed.

It said many of the countries where it operates have announced increases in defence spending, or plan to increase this "to address the elevated threat environment", with the firm adding that it is on track to have a "very strong" 12 months of orders and expects margins to grow into the new year. Boss Charles Woodburn said: "Looking forward, our large order backlog, diverse portfolio position and focus on programme performance position us well for another year of top-line growth and margin expansion in 2023.”

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