A new £2.4 billion munitions deal will sustain 4,000 jobs around the UK over 15 years, defence minister Jeremy Quin has announced.
About 1,260 people will work on the Next Generation Munitions Solution (NGMS) in engineering, operations and supporting roles across five BAE Systems UK sites.
A further 1,500 roles will be supported along the supply chain, as well as another 1,300 jobs due to consumer spending in local economies, said the Ministry of Defence (MOD).
The new contract will replace the current MASS (Munitions Acquisition, the Supply Solution) agreement from January 2023.
The Ministry of Defence claims the new contract will deliver about 50%, by value, of the MOD’s total general munitions portfolio, maximise military capability and reduce cost.
The announcement comes after Prime Minister Boris Johnson promised an extra £16.5bn to be given to the Ministry of Defence over the next four years in a bid to modernise the Armed Forces.
The contract to equip UK Armed Forces with essential fire power will see BAE Systems manufacture 39 different munitions for the Royal Navy, Army, Royal Air Force and Strategic Command to use on the frontline.
BAE will produce approximately 70,000,000 small arms ammunition rounds, 100,000 large calibre rounds, 75,000 mortars and 40,000 medium calibre rounds per annum.
Jeremy Quin said: "This vital multibillion-pound contract will provide our servicemen and women with fire power on the frontline for years to come whilst investing in British industry, British jobs and British infrastructure.
"Defence underpins hundreds of thousands of jobs across all four corners of the nation, and ongoing investment is crucial as we work together to build back better and stronger from the COVID-19 pandemic."
In its bid, BAE Systems identified around £400m of savings and efficiency opportunities to be pursued up to 2038, according to the MOD.
BAE Systems chief executive Charles Woodburn said: "This contract secures the future of a highly technical and critical industry which supports thousands of manufacturing jobs in several areas throughout the UK.
"By investing in new technology and skills to further develop our expertise, we can continue to deliver essential sovereign capability to the Armed Forces at competitive prices."
BAE Systems forecasts it will spend £350m with UK-based companies on raw materials and machine components.
The company will also recruit more than 200 apprentices and graduates during the course of the contract.
The degree apprenticeship in ordnance, munitions and explosives will be delivered in partnership with Swansea University.
Cover image: Munitions at BAE Systems site Radway Green, Cheshire (Picture: MOD).