BAE Systems says a study it commissioned from PwC found that the Tempest next-generation fighter project will support 20,000 jobs and generate over £23.5 billion in revenue for the UK economy, about what Tempest is estimated to cost. (BAE image)
The Tempest programme is being delivered by Team Tempest, a UK technology and defence partnership formed by BAE Systems, Leonardo UK, MBDA, Rolls-Royce and the RAF, and involving hundreds of high-tech companies, SMEs and academia across the UK. It is one of the UK’s most ambitious technological endeavours, designed to deliver a highly advanced, adaptable and affordable military combat air system which will play a key role in the nation’s defence and security.
Along with meeting a major military requirement, the programme is expected to deliver significant benefits to the UK over its full lifetime. It will preserve sovereign capability whilst investing in highly skilled jobs, with a specific focus on young people, developing technology and infrastructure, and will support the wider economy and long-term prosperity of the UK.
The data released today represents the preliminary findings of an independent analysis by PwC on the economic contribution at the initial stages of the multi-decade Tempest programme, covering the period up to 2050. A full report will be available by the end of the year.
The preliminary findings reveal:
-- The Tempest programme will contribute at least £25.3bn (2) to the UK economy in the first 30 years alone. This figure excludes the significant impact of R&D spillover (3) and the important role Tempest plays in securing the critical UK combat air industrial sector and its associated economic benefits.
-- For every £100 of direct value added generated by the Tempest programme partners, £220 of GVA (4) (direct, indirect and induced) is estimated to be created across the UK economy.
-- The programme is forecast to support an average of circa 20,000 jobs every year between 2026 and 2050. For every 100 workers employed directly by the Tempest programme partners, a further 270 are estimated to be employed across the UK economy (direct, indirect and induced).
This initial analysis looks at the period of programme development, production, entry into service and early support, but does not include the full potential of export opportunities, R&D investment or the value of the programme beyond 2050.
Michael Christie, Director, Combat Air Acquisition Programme, BAE Systems commented: “Tempest is an exciting and ambitious multi-decade programme that will help to preserve our national security whilst at the same time driving significant economic benefits for the UK. The initial analysis revealed today demonstrates that Tempest is critical to ensuring the UK can sustain its world-leading Combat Air Sector, preserving the sovereign capability that is essential to retaining military freedom of action for the UK.”
Tempest is a beacon to attract engineers and technicians and a place for young people to build their careers. There are currently 1,800 employed across UK industry and the MOD, a number that is set to increase to 2,500 next year.
ADS Chief Executive Paul Everitt said: “The Tempest programme is essential for our national security and future prosperity. The high value design and ground breaking engineering skills required for success will create a new generation of talent to drive UK industry.
“Defence programmes like Tempest offer an invaluable opportunity to secure a recovery from the current COVID-19 crisis. It will embed high-value design and manufacturing skills in the UK for decades to come, sustain thousands of high paying jobs and give apprentices the opportunity to build their career in an iconic programme with massive export potential.”
BAE Systems, on behalf of Team Tempest partners, commissioned PwC to carry out an independent analysis of the economic impact of the Tempest programme. The full report is due for publication before the end of the year.
Today’s announcements illustrate the wider economic, skills and technology benefit to the UK. In July seven further companies signed agreements to progress opportunities to work on future combat air concepts and underpinning technologies across Team Tempest – including Bombardier Belfast, Collins Aerospace in the UK, GE Aviation UK, GKN Aerospace, Martin-Baker, QinetiQ, and Thales UK.
Notes
1) The draft report referenced was prepared only for BAE Systems (Operations) Limited and solely for the purpose and on the terms agreed with BAE Systems (Operations) Limited. PricewaterhouseCoopers LLP accepts no liability (including for negligence) to anyone else in connection with the draft report. Any content that is referenced from the draft report is subject to change between now and the issue of the final version to BAE Systems (Operations) Limited.
2) Figures presented in NPV (net present value) terms in 2019 basis. The estimates have been discounted by the social time preference rate of 3.5% as recommended in HM Treasury’s Green Book.
3) R&D Spillover: A positive consequence of research and development applied to sectors beyond which it was developed for, which has benefits to the wider economy.
4) Figures presented in GVA (gross value added). GVA is a measure in economics of the value of goods and services produced in an area, industry or sector of an economy.
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