The Treasury is poised to give the green light to a major defence contract worth £1 billion with Italian helicopter manufacturer Leonardo, securing the future of its crucial plant in Yeovil, Somerset. This decision comes after weeks of uncertainty that had placed thousands of skilled jobs at risk and threatened the UK's only end-to-end rotary wing manufacturing capability.
Yeovil Site in Limbo as Government Decision Awaited
The Italian company's Yeovil facility had been operating in a state of limbo while awaiting the Government's final verdict on whether to proceed with the substantial contract. Leonardo, which employs approximately 3,300 staff directly and works with nearly 12,000 suppliers across the UK, had warned that its future operations in Britain could be jeopardised without this critical deal.
Chancellor and Prime Minister Intervene to Save Project
Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer have personally intervened to rescue the project after the Ministry of Defence reportedly deprioritised it within the broader Defence Investment Plan. Their decisive action follows the cancellation of a planned visit by Defence Secretary John Healey to the Yeovil plant on Thursday, where he was expected to formally award the contract.
A Treasury source emphasised the Chancellor's commitment, stating: "Rachel cares about keeping the country safe and driving jobs in the UK because our security and economic growth are fundamentally connected. This project is key to those principles – she wasn't going to let this deal collapse under her watch."
Urgent Deadline and Strategic Importance
As the sole bidder for this Government contract, Leonardo faces a pressing deadline, with its bid formally expiring at the end of Sunday. The company's chief executive, Roberto Cingolani, had previously indicated that the UK firm's viability would be threatened without approval of this deal.
The contract involves purchasing a new fleet of defence helicopters, representing a significant investment in national security and domestic manufacturing. Leonardo's Yeovil plant stands as a cornerstone of Britain's defence industrial base, making this decision particularly consequential for both regional employment and strategic capabilities.
Both Leonardo and the Ministry of Defence have declined to comment on the ongoing negotiations, but sources indicate that approval is imminent, bringing relief to workers and suppliers who had faced an uncertain future.
