26 March 2025 Major £1.6bn equipment contract to support British Defence jobs and boost Army readiness..
British Army equipment, including tanks and armoured vehicles, will receive world-class maintenance and spare parts under a contract which supports 1,600 UK jobs.
- Significant contract update to provide kit maintenance and increased vehicle availability.
- Directly supports 1,600 defence jobs across the country, supporting a 6,000-strong business supply chain.
- Investment in British firm Babcock boosts defence as an engine for UK economic growth.
British Army equipment, including tanks and armoured vehicles, will receive world-class maintenance and spare parts under a contract which supports 1,600 UK jobs.
The five-year £1.6bn contract extension with British defence firm Babcock will cover vital military assets including Challenger 2 tanks, 105mm artillery guns and Trojan armoured vehicles, ensuring they remain combat-ready to meet emerging threats.
As a strategic partner to the UK MOD, this contract award further underpins Babcock’s commitment and long-term relationship with the British Army. Specialising in building new vehicles, supporting its fleet, and training its soldiers, Babcock plays a crucial role in ensuring operational readiness for the British Army. The transformation of the original contract (DSG) over the first 10 years will be further accelerated over the extension period directly supporting the delivery of the Defence Industrial Strategy, delivering significant value to the MOD and growth to the UK economy.
The extension to the existing DSG Service Provision and Transformation Contract (SPTC) will deliver a comprehensive range of support capabilities for the Army in the UK with global reach. Through the course of the extension Babcock will deliver improved readiness, regeneration and asset management services underpinned by extensive engineering and supply chain expertise. This will maximise the availability of critical army equipment whilst delivering increased value for money and better outcomes for both partners.
A comprehensive transformation programme will deliver a step change in support outputs, thereby setting the foundation for the army modernisation programme in the coming decades. In collaboration with the MOD, who have committed to investment in facilities and equipment, Babcock will continue to invest in its workforce of 1,600 highly skilled people across more than 20 sites throughout the UK, including skills development and a robust apprentice scheme dedicated to nurturing talent and building expertise.
The Service Provision and Transformation Contract will sustain 1,600 highly skilled jobs in locations across the UK, including over 400 in Telford and over 250 in Dorset. The investment follows the Prime Minister’s historic commitment to increase defence spending to 2.5% of GDP, recognising the critical importance of military readiness in an era of heightened global uncertainty.
Maintenance services will cover preventative maintenance, emergency repairs and spare parts management. It will also include digital transformation to improve fleet management efficiency, keeping more vehicles and equipment primed for soldiers to use – boosting national security and renewing Britain’s economy as we deliver on our Plan for Change.
The move to boost the readiness of British Army combat vehicles comes as the UK continues to lead planning efforts for a Coalition of Willing nations to help secure a just and lasting peace in Ukraine. Following the planning meeting attended by approximately 30 nations last week, further operational planning meetings will be led by UK Commander Joint Operations, General Nick Perry.
Defence Secretary John Healey MP said: “Tanks, armoured vehicles and kit are the backbone of the British Army. We are taking action to ensure the outstanding service men and women of our Armed Forces are properly equipped and ready to respond to ever-changing global threats. Supported by largest sustained increase in defence spending since the Cold War, this substantial investment with Babcock demonstrates how defence is an engine for growth: supporting businesses of all sizes and sustaining more than 1,600 good, well-paid jobs across Britain.National security is the bedrock of a successful economy and our Government’s Plan for Change.”
Babcock’s Chief Executive Officer, David Lockwood said: “In a period of increased global instability, more is being expected of our armed forces. This contract extension ensures that Babcock continues to provide the British Army with the tools to do its job, when and wherever they are needed. Our know-how, application of technology and extensive experience in the land domain help ensure that the British Army is ready to fight and win wars. While the Land Integrated Operating Services programme places future contracts, this deal will also support approximately 6,000 UK businesses throughout the wider supply chain, as well as 200 apprentices. These apprenticeships will offer valuable training and development opportunities in fields such as HGV maintenance and automotive refinishing, providing career paths in the defence sector for the next generation of skilled workers.”
MOD Director Land Environment, Major General Lizzie Faithfull-Davies CBE said: “It has taken a lot of hard work to collaboratively deliver this SPTC Reframe contract amendment. I am delighted to renew our relationship with Babcock. With this amended contract, DE&S, the Army, and Babcock will now provide even better support to the in-Service platforms of our Armed forces; ensuring that the vehicles the Army will fight from are repaired, maintained, and ready whenever the Army need them.
The work comes ahead of the Defence Industrial Strategy, which will bolster UK industry and provide more opportunities for defence to be an engine for economic growth. It follows a recent commitment to launch a new hub to provide small and medium enterprises (SMEs) with better access to the defence supply chain, and a commitment to set direct SME spending targets for the Ministry of Defence by June this year.”