UK Defence and Scottish Industry

UK defence spends £1.64bn with Scottish industry each year, supporting 10,000 private sectors jobs with major defence suppliers like Babcock, BAE Systems, Boeing, Leonardo, QinetiQ, Raytheon, Rolls-Royce and Thales UK.

The largest expenditure is invested in shipbuilding and repair.  Defence’s total industrial spend equates to £300 for every person in Scotland.

Scottish industry is renowned for building the world’s finest warships – including the UK’s new aircraft carriers and providing 20 years of orders for the shipyards on the Clyde.

The UK Government has placed a £3.7bn contract to build the first three state-of-the-art Type 26 Frigates, and the Clyde yards will build the remaining five too.  The order for the second batch will be placed in the early 2020s.  The Type 26 programme sustains 1,700 jobs in Scotland and another 2,300 jobs across the wider UK supply chain until 2035.

The UK defence sector is a key driver of innovation and boasts a highly skilled workforce utilising the best technology and engineering know-how on programmes such as the Typhoon and Queen Elizabeth Class Aircraft Carrier.

The Scottish defence sector also underpins the UK’s wider marine, aerospace, nuclear and security capabilities.

Working with the Strathclyde and Heriot Watt Universities and businesses, the Defence sector generates good growth prospects. Scottish industry’s specialisms include important areas like manufacturing radar systems for search and rescue helicopters flown around the world, while Glasgow is becoming a key centre for small satellite technology, part of a space sector that industry association ADS Scotland estimates as being worth £2.5bn a year. The UK Government has provided £2.5m of funding for a spaceport at Sutherland on the north coast of Scotland.

The UK Government has also identified Air Capabilities and Intelligent Systems as key technology capabilities for the UK which it will support Scottish and UK firms to compete in increasingly competitive international defence markets.

Case study: RAF Lossiemouth

The Ministry of Defence and Boeing has jointly funded a new strategic facility at RAF Lossiemouth in Moray, the home of the RAF’s new submarine hunting Poseidon Maritime Reconnaissance and Attack (MRA) aircraft, nine of which will arrive there from 2020.

This £400m investment includes training simulators, accommodation, an operations centre and engineering support.  NATO ally Norway will also be able to maintain its aircraft at Lossiemouth, and the US is investing in the site as well in order to be able to operate its Poseidon’s from Scotland.

The construction phase will support 200 local jobs, with an additional 470 military and civilian posts at Lossiemouth when the RAF Poseidon’s enter service.

Key Defence sector organisations in Scotland

ADS Scotland

ADS Scotland represents both its SME and multinational company members across the Aerospace, Defence, Naval and Security Sector, where they make a significant contribution to both the Scottish and UK economies. ADS’s purpose is to deliver business opportunities to members, improving manufacturing productivity and efficiency, raising individual company profile and marketing members and sector capabilities internationally.

Aircraft Carrier Alliance

The ACA, formed in 2003, is made up of Thales UK, BAE Systems, Babcock and the Ministry of Defence. A UK‐wide endeavour, at its peak the programme directly employed 8,000 people across six build yards with final assembly of both ships at Babcock’s Rosyth facilities, with a further 3,000 people employed across the supply chain.  HMS Queen Elizabeth was successfully handed over to the Royal Navy in December 2017, whilst HMS Prince of Wales is in the final stages of fit-out and testing at Rosyth, ahead of her planned sea trials.

Babcock Marine (Clyde)

As the Ministry of Defence’s commercial partner at HMNB Clyde, Babcock International provides highly specialist engineering support services, including the management of critical infrastructure and nuclear facilities. Babcock delivers operational maintenance, upgrades and repairs to support Royal Navy vessels, including the Vanguard and Astute-Class nuclear submarines based in Scotland. Its waterfront activities at Clyde include supporting naval surface ships, managing engineering work on base-ported Mine Countermeasure Vessels and carrying out emergency and scheduled maintenance on other visiting Royal Navy and foreign naval vessels.

Babcock Rosyth Dockyard

Babcock International’s facilities in Rosyth play a critical role supporting the UK Defence sector, from the Queen Elizabeth aircraft carrier programme, delivered through a successful Industry and Ministry of Defence Alliance (ACA), to advanced manufacturing in support of the UK and USA future submarine programmes.  Rosyth is a key centre of Defence support conducting ship refits, repairs and maintenance work on ocean survey vessels and mine countermeasures vessels.  The site is home to the demonstrator for the UK’s Submarine Dismantling Project which aiming to prove a safe, environmentally responsible and cost-effective solution for dismantling the UK’s de-fuelled nuclear powered submarines.

BAE Systems Surface Ships (Scotstoun and Govan)

These are the UK’s biggest military shipyards, with long track record in warship design and construction born out of the yarrow heritage (c 3700 employees). The £3.7bn contract to start building the first three of eight state-of-the-art Type 26 frigates is sustaining 1,700 jobs in Scotland for the next two decades, and a total of 4,000 jobs across the wider UK supply chain until 2035.    

Boeing Defence UK (Lossiemouth, Moray)

The MOD and Boeing have jointly funded a new strategic facility at RAF Lossiemouth, home of the RAF’s new submarine hunting P-8A Poseidon maritime patrol aircraft.  This £400m investment includes training simulators, accommodation, and operations centre and engineering support. A new three bay hangar has been made large enough both for the RAF’s needs and for collaborating with other NATO air forces. This will allow Norway to maintain its P-8A aircraft at Lossiemouth and for work to be carried out there on US aircraft also. Construction at Lossiemouth will support around 200 local jobs. An additional 470 RAF and Boeing personnel will be based there when the P-9A enters service, increasing the stations local economic benefits by 25%.  

Leonardo UK (Edinburgh)

Leonardo is a global high-tech company and one of the key players in Aerospace, Defence and Security. The company’s Edinburgh facility, with 2,000 people on site, a high technology research programme in Scottish universities, and an advanced manufacturing Scottish supply chain, makes a key contribution to the Defence presence in Scotland.  Leonardo’s Edinburgh investment provides critical and world-leading elements of the surveillance and protection capabilities of the Royal Air Force, the Royal Navy and the British Army.  Equally, the company’s commitment creates a valuable export portfolio to customers as diverse as the US Air Force, US Marine Corps, US Coastguard, and to a wide variety of civil agency clients through its laser, radar, lidar and electro optic technologies for detection, tracking and countermeasure applications, which are used in the most demanding conditions.  Alongside these established capabilities, Leonardo’s investment in innovation is now taking it into emerging markets looking to adopt space, cyber and public safety technologies. Since its Edinburgh site was first built in 1943, the company (then Ferranti) has placed a particular emphasis on skills and developing its young workforce.  Today, with a large intake for its award winning apprenticeship scheme, a quadruple accredited graduate scheme and as one of the few companies to have gained the Investors in Young People Gold Accreditation, Leonardo is proud of its sustained commitment to jobs, skills and prosperity in Scotland.

MacTaggart Scott (Loanhead, Midlothian) 

MacTaggart Scott is a privately owned Scottish Engineering company established in 1898 employing 320 people. The business primarily supports the Naval Defence industry, with approximately 70% of all production exported to navies around the world.  The equipment provided to the UK Royal Navy provides a vital ‘shop window’ for these export sales. Submarine equipment includes: sonar towed array handling, mast raising gear, emergency propulsions systems, capstans and windlasses, vent valves and buoyant wire aerial handling systems. Surface ship equipment includes: helicopter handling, aircraft / stores / weapons lifts, arrestor gear and hydraulic power packs.

Thales UK (Glasgow)

Thales is a leading developer and manufacturer of sensors, range-finders, target designators and optoelectronic periscope systems.  As an employer with around 700 staff (inc. subcontractors) in Glasgow, Thales is a key player in the Defence sector in Scotland.  Thales is critical to the capabilities of the Royal Navy, UK Army, Royal Air Force, NATO Allies and other civilian clients through its laser and electro optic technologies for detection, targeting and countermeasure applications for military and civilian markets. Thales is also engaging in the pursuit of emerging markets such as Cyber Security and Dual Use Technologies.   

Raytheon UK (Glenrothes)

Raytheon UK is a leading technological innovation company specialising in defence, civil government and cyber solutions. The Company’s site at Glenrothes, Fife, was founded more than 50 years ago. The site is a manufacturing hub – including for air traffic radar systems and power products for armoured vehicles – and is one of the largest private sector employees in Fife with over 700 highly skilled employees. In 2017, Raytheon generated £115 million for Scottish GDP and supported over 1,000 jobs in Scotland. As a prime contractor and major supplier to the U.K. Ministry of Defence, Raytheon has invested more than £200m in research & development over the last ten years, supporting innovation and technological advances across the UK. 


QinetiQ provides extensive research capabilities in Test and Evaluation (T&E) for the Ministry of Defence (MOD), UK defence companies and international customers, including the US and European nations. It is collaborating with industry partners and the MOD to develop a long-term vision for T&E providing for greater visibility of our capability around the world.

Vector Aerospace (A StandardAero Company), (Perth)

A highly‐skilled, one stop shop, component repair facility for a range of civil and military aerospace applications including Chinook, AS350 / Ecureuil, C130 Propellers and T56 engine fuel accessories.  Vector are actively chasing business from overseas defence and civil markets.  They are based at a Former Defence Repair Agency site established during WW2.  This work creates around 150 jobs.

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