London, United Kingdom. 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. The decision follows concerns that without a new contract Leonardo could shut Britain’s last military helicopter manufacturing site in Yeovil, southwest England.
Contract and site concerns
Leonardo previously said it could close the Yeovil site without a new contract, threatening the jobs of the 3,000 people who work there. The deal is worth as much as 1 billion pounds ($1.35 billion) and had appeared uncertain with days remaining until a March 1 deadline.
Treasury intervention
A source from Reeves’ office said the finance minister felt compelled to intervene to ensure UK defence spending protects and drives British business and jobs, adding that she was not going to let the deal collapse under her watch.
Purchase details and timeline
Reeves is set to approve a deal to buy 23 medium-lift support helicopters, fewer than the requirement for up to 44 helicopters originally stated in a 2022 government notice. A separate source told Reuters that Leonardo’s tender offer expires on March 1 and said further talks between the government and Leonardo were likely in the coming days.
Previous reporting and government position
Sky News reported that defence minister John Healey had been due to visit the Yeovil factory 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. A Leonardo spokesperson declined to comment.
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