MPs welcome defence spending boost with Scottish SMEs

In its response to the Scottish Affairs Committee’s report, Defence in Scotland: Military shipbuilding, the UK Government confirms that spending with Scottish defence small and medium-sized enterprises (SMEs) has increased from 2.5% in 2020/21 to 7% in 2021/22.

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Spending with Scottish defence SMEs has been a theme in the Scottish Affairs Committee’s work on ‘Defence in Scotland’, with concerns that Scottish companies were being overlooked by the Ministry of Defence (MOD) and prime contractors. The Government’s confirmation that the share of spending with SMEs has increased is welcomed by the Committee.

In its report, the Committee raised concern that the building of warships is gradually being ‘offshored’, with competition opening up to international companies which could be to the detriment of Scottish shipyards and supply chains. In particular, the Committee considered the decision to award the Fleet Solid Support (FSS) ships to an international consortium, Team Resolute, rather than a Team UK bid which would have supported more UK – and in particular Scottish – jobs.

The Committee would like further clarification as to why the Team UK bid was non-compliant with the terms of the competition and to better understand how the decision was consistent to the objectives outlined in the National Shipbuilding Strategy. As such, the Chair of the Committee, Pete Wishart, has today written to the Defence Secretary asking for clarity. 

Chair's comment

Scottish Affairs Committee Chair, Pete Wishart MP, said:

“It is brilliant news that UK Government spending with Scottish defence SMEs has jumped in recent years. I hope supply chains across Scotland start to feel this investment, with will support many jobs and local economies. It is a vote of confidence in the Scottish defence sector.

“While the Government’s response to our report was largely welcome, we were disappointed with the lack of information on the decision to award the FSS contract to an international consortium over a Team UK bid that would have supported Scottish shipbuilding. If the UK Government is insistent that it is not offshoring the building of warships, we need to better understand the reasons for its decision. I hope the Defence Secretary is able to shed some light on this issue in response to my letter today.”