Government Set to Approve £1bn Military Helicopter Deal
The UK government is poised to authorize a £1 billion contract for the procurement of military helicopters from the nation's sole specialist manufacturer.
Leonardo, an Italian company operating a manufacturing plant in Yeovil, Somerset, had faced uncertainty after a scheduled visit by Defence Secretary John Healey to formally award the contract was cancelled on Thursday.
However, sources within the Treasury have informed the BBC that the agreement to produce a new fleet of defence helicopters will ultimately be finalized on Friday.
Leonardo owns the UK's last military helicopter manufacturing facility, which employs approximately 3,000 workers, and was the only contender for the contract.
It is understood that both the Chancellor and the Prime Minister intervened to ensure the continuation of the project, partly to safeguard UK employment.
The Chancellor, Rachel Reeves, did not want the deal to collapse on her watch, because security and growth "were fundamentally connected," a Treasury source said.
Roberto Cingolani, Leonardo's chief executive, has previously warned that the company's future would be jeopardized if the contract was not approved.
The government had earlier postponed making a decision regarding the contract.
This development comes amid reports that Prime Minister Sir Keir Starmer is contemplating a significant increase in defence expenditure.
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