Royal Navy, Army and RAF investment paying off as BAE Systems spends millions with defence firms in Portsmouth
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Investment in Portsmouth defence firms is booming with millions being spent at various companies.
Research produced by Oxford Economics for BAE Systems revealed that £240m has been spent with 180 suppliers in the city and surrounding area. Scott Jamieson, managing director at BAE Systems Maritime and Land Defence Solutions, said the government’s defence dividend is already taking effect.
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He added: “We are proud to be at the heart of Portsmouth’s continued growth and vitality. With 4,000 people employed locally, combined with £240m we spend with our supply chain, it is estimated that our work supports 6,400 workers in the area.
“As the city evolves, we remain committed to driving innovation, creating local jobs, and contributing to a thriving economy. Portsmouth’s future is built on strong local enterprise and we are privileged to play a key role in shaping that success.”
The BAE Systems Contribution Report comes a month after the Strategic Defence Review, which recommended that the government should focus more of its military investment on UK companies. Prime minister Sir Keir Starmer previously outlined his ambition to create a defence dividend. He said this would be “felt in the pockets of working people and the prosperity of the country, securing growth for generations to come.”
The government’s Defence Industrial Strategy has committed to prioritising British small to medium sized enterprises for Ministry of Defence (MoD) contracts. Defence secretary John Healey outlined “ten years of rising investment” while speaking to the defence select committee yesterday (July 2) - committing to meeting Nato’s five per cent spending target by 2035.
He added that the sector is not only important for national security, but also growing the economy. Engineers at BAE Systems deliver warship support and maintenance to the majority of the Royal Navy’s surface ships at HMNB Portsmouth and across Hampshire.
Last year, the firm employed 4,000 full time roles in the Portsmouth area and on the Isle of Wight, including apprenticeships and graduate contracts. They invested £230m in education and training in 2024.