BAE Systems has been awarded a £5.9 billion UK Government contract covering the next phase of work on the Royal Navy’s four Dreadnought-class ballistic missile submarines.
Announced on 30 July, the contract will fund work intended to move the submarines towards operational service, including continued construction of the first two boats and work on the remaining vessels.
The contract forms part of an £8.4 billion government funding package for the next stage of the Dreadnought programme. The Ministry of Defence confirmed that £5.9 billion is allocated to BAE Systems, with the remaining funding supporting Rolls-Royce Submarines and the wider supply chain.
Four submarines progress
The first submarine, HMS Dreadnought, is under construction at BAE Systems’ Barrow-in-Furness shipyard and is planned to enter Royal Navy service in the early 2030s.
The latest contract also covers continued work on the second boat, Valiant, as well as fabrication and outfitting associated with Warspite and King George VI. The four submarines will replace the Royal Navy’s Vanguard class and assume responsibility for the UK’s Continuous At-Sea Deterrent.
BAE Systems reported that more than 7,000 of its employees were working on the Dreadnought programme at the time of the announcement. The company’s expenditure through its Dreadnought supply chain reached £1.3 billion during its previous financial year, taking cumulative supply-chain expenditure to £8.9 billion across more than 1,500 UK suppliers.
Supply chain enters next phase
For defence suppliers, the scale of the contract is significant because submarine construction requires a long-term industrial network spanning specialist engineering, nuclear technologies, advanced manufacturing and complex systems integration.
The wider Defence Nuclear Enterprise supports thousands of UK companies, while the government says approximately 47,000 jobs are associated with the enterprise as a whole.
The latest funding also comes as Barrow’s submarine manufacturing capacity continues to expand. BAE Systems says £1 billion has been invested in its local submarine facilities, while its workforce at the site has grown from approximately 11,000 to around 16,000 over four years.
For buyers and suppliers involved in naval programmes, the award demonstrates the unusually long procurement and industrial planning horizons associated with strategic submarine programmes. The UK’s latest Defence Nuclear Enterprise update says the Dreadnought programme remains within its existing overall cost envelope, while also acknowledging continuing programme pressures and risks arising from its scale and complexity.
