Chancellor Rachel Reeves is set to approve a £1 billion contract with Italian defence firm Leonardo to build military helicopters at its Yeovil factory in Somerset, according to reports. The deal is expected to secure around 3,000 manufacturing jobs at the site, which had faced the threat of closure.
Workers had feared Leonardo would shut the facility by the end of March if the government did not place an order for new helicopters. Leonardo was the sole bidder for the UK’s “new medium helicopter” contract, launched in February 2024, after Lockheed Martin and Airbus withdrew.
The new aircraft will replace the Royal Air Force’s ageing fleet of Puma helicopters, which have been in service since the 1970s. The contract decision came just before Leonardo’s offer was due to expire on Sunday, following a last-minute reversal from the Treasury.
Defence Secretary John Healey had been forced to cancel a visit to the Yeovil factory on Thursday amid uncertainty over Treasury approval. However, by Friday afternoon, Treasury officials confirmed the chancellor would give the green light, stating that “security and economic growth are fundamentally connected”.
Sharon Graham, general secretary of the Unite union, called the contract “a tremendous victory” for members but criticised the delays, saying workers were “left in the dark until the 11th hour”. The Ministry of Defence declined to confirm the decision, stating that “no final procurement decisions have yet been made”.
