LONDON/ROME, Feb 27 (Reuters) - Britain's finance minister Rachel Reeves is set to award a contract to Italian defence company Leonardo to build a new fleet of military helicopters, a Treasury source
UK Nears Approval for Leonardo Helicopter Contract Worth £1 Billion
LONDON/ROME, Feb 27 (Reuters) - Britain's finance minister Rachel Reeves is set to award a contract to Italian defence company Leonardo to build a new fleet of military helicopters, a Treasury source said on Friday.
Without a new contract, Leonardo had said it could shut Britain's last military helicopter manufacturing site, in Yeovil, southwest England, threatening the jobs of the 3,000 people who work there.
Implications of the Helicopter Contract
The deal, worth as much as 1 billion pounds ($1.35 billion), had appeared to be up in the air with just days to go until a March 1 deadline.
The source from Reeves' office said the finance minister had felt compelled to intervene to ensure that UK defence spending protects and drives British business and jobs, and that "she wasn't going to let this deal collapse under her watch," the source said.
REEVES TO APPROVE PURCHASE OF 23 HELICOPTERS
Details of the Helicopter Purchase
Reeves is set to approve a deal to buy 23 medium-lift support helicopters, which would be fewer than the requirement for up to 44 helicopters originally stated in a 2022 government notice.
A spokesperson for Leonardo declined to comment.
A separate source told Reuters Leonardo's tender offer expires on March 1, adding that further talks between the government and Leonardo were likely in the coming days.
Government's Decision-Making Process
Sky News had reported earlier that defence minister John Healey had been due to visit the factory in Yeovil on Thursday to announce the deal but pulled out because the finance ministry had yet to sign it off.
The government has previously said it needed to finalise its defence investment plan before it could award the helicopter contract.
That plan has been delayed from the autumn amid media speculation about a 28 billion pound ($38 billion) hole in the military budget, despite Prime Minister Keir Starmer's pledges to boost defence spending.
The Yeovil facility dates back to 1915, when it was known as Westland and made planes used in World War One. It pivoted to helicopters in the 1950s and has recently produced the Merlin and Apache helicopters.
As well as the 3,000 jobs on site, a further 9,000 jobs in the supply chain are supported by the factory.
($1 = 0.7422 pounds)
(Reporting by Sarah Young and Sam Tabahriti in London and Giulia Segreti in Rome; Editing by Kevin Liffey)
