Tax payer’s eyebrows may have been raised at news of a £16.5bn increase in defence spending, against the backdrop of the financial constraints of COVID-19.

Leonardo employs 7,500 people in the UK from Edinburgh to Basildon and is the second biggest supplier of defence equipment to the UK Ministry of Defence. It said the government’s decision for greater investment into defence reflects new research from the Oxford Economics Group, demonstrating that with every one pound invested in Leonardo, the company puts more than double back into the local economy.

Clive Higgins Leonardo’s Director of Government Affairs, said the review took a detailed look at the financial contribution of Leonardo in the UK, specifically looking at the company’s overall contribution in terms of supply chain activity and investment in skills and young people.

“So a very detailed piece of work looking at a number of factors, but based on the value that we bring to the UK where we generate intellectual property, and the investment we put through our various facilities,” he said. “It starts to tell a story around how we grow the business through export. We are one of only a few organisations in the UK that exports its intellectual property overseas, and that brings value back into the UK. And through all of those various mechanisms you can see the aggregating factor of how one pound with Leonardo will actually bring £2.40 back into the UK economy.”

Defence organisations must ensure they demonstrate value

Leonardo supports key combat air programmes and has recently won contracts for radar systems for the Typhoon aircraft and, looking to the future, Tempest. Higgins explained that now was the time for the industry to demonstrate its value to the UK economy.

Clive Higgins said: “Clearly any increase in defence spending is potentially to be good for organisations such as ours, we have to ensure we’re providing value back to the UK taxpayer back to the economy. And that’s why, as we said at the start, we are investing significant amounts not only in the R&D, but also in our young people, apprenticeship programmes in the schools of the UK. But we do have platforms and capabilities from our helicopter sector, which can certainly fulfill the requirements that we see for the replacement of the Puma in the future medium lift category. And the heritage of the platform that we’d offer in the 149 is military but also takes the benefit from dual use capability because it actually operates, or the sister aircraft operates, for the UK maritime agency and the Coast Guard guys.”

Reducing carbon emissions

With sustainability a key driver within the MOD, Leonardo is reducing its carbon footprint and ensuring that the products and services it offers are sustainable. The company is also investigating the possibility of becoming carbon neutral by 2030.

Higgins explains: “We’ve mobilised something like four and a half thousand employees across the UK to work remotely. We’re embedding that in moving forward through a customer working arrangement. And we’re really trying to ensure that we we take the value that we’ve learned over the last period of time to ensure that we can drive better outcomes, so sustainable environment, sustainable products, and doing our best for society as well. And that also links back to the supply chain, ensuring that we work hand in glove with our suppliers to deliver the best outcomes through the products and services we need for them as well.”

Subscribe to the FINN weekly newsletter