Friday, 20 August 2010

BAE Systems plays vital role in North West economy by Graham Jones

PRESS RELEASE -
NEWLY ELECTED MP GRAHAM JONES REQUESTS RESEARCH INTO VALUE OF BAe SYSTEMS IN THE NORTH WEST


New Rearch shows the valua of BAe Systems to the North West economy
Research released this morning by Lancashire Economic Partnership has reignited the debate on the importance of BAE Systems to the UK economy and specifically the manufacturing Industry in the North West of England.

The research which was undertaken following a request by Graham Jones MP reveals that BAE Systems plays a vital role in the North West of England’s economy making a considerable contribution to employment and also investing heavily in Research and Development. The research clearly indicates the extent to which other businesses in the region depend indirectly on BAE Systems’ presence in the North West.

BAe systems are currently building the Eurofighter, a project LibDems said before the election would be scrapped and which is currently under review by the Coalition.

In light of the Government Spending review in October there are concerns that cuts to Government investment in the region might impact heavily on BAE Systems and this poses a considerable threat to the local economy to which the report today shows that BAE Systems is a major contributor.

A previous report in 2008 by Oxford Economic Forecasting showed that BAE Systems employed more than 35 000 people in the UK in 2006 with a particular concentration of this employment located in the North West of England.

The key findings of today’s research by Lancashire Economic Partnership are:
1) Lancashire has the highest concentration of BAE Systems workforce employing around one third of UK employees.

2) BAE Systems MAS employs c11,500 people in Lancashire, (7,000 at Warton, 4,100 at Samlesbury with the remainder at a number of facilities in Preston). At least the same number of jobs again are supported indirectly through BAE.

3) BAE Systems invests significant amounts on education locally, including a £1million partnership with the University of Central Lancashire for research into energy management.

4) In 2009, MAS recruited c50 graduates, the vast majority of which are based at Samlesbury or Warton.
Graham Jones MP quote: “This is yet another strong reminder of the importance of BAE Systems to the North West. The research clearly demonstrates the extent to which the North West economy depends on BAE System’s and the Government needs to be aware of this when it publishes its Spending Review in the coming months. BAE Systems employs from every constituency in the North West and there is a real possibility that the livelihoods of a vast number of families in the North West will be put at risk if investment in the region is cut. We cannot underestimate the importance of BAE Systems to the North West.”
Notes:
• Graham Jones MP contacted Lancashire Economic Partnership back in July 2010 to request that the value of BAE Systems to the North West be examined in detail.

• The research was conducted by Lancashire Economic Partnership in conjunction with the Public Affairs Department at BAE Systems.

• BAE Systems plays a key role in Lancashire’s manufacturing sector which directly and indirectly affects all aspects of the £22 billion sub regional economy and makes an important contribution to the balance sheet of UK PLC. In terms of jobs, manufacturing is 50% more important to Lancashire than the national average.

• The January 2008 report by Oxford Economic Forecasting entitled ‘The Economic Contribution of BAE Systems to the UK in 2006’ can be viewed in full at: http://www.oxfordeconomics.com/Free/pdfs/geobae0308.pdf

• The main points in the 2006 report were:

1) In 2006, BAE Systems directly employed 35,000 people, with a value added (GDP contribution) of £2.4 billion, exports of £4.1 billion, a contribution to taxes of nearly £500 million and R&D spending of nearly £900 million.

2) BAE Systems’ directly employed 35,096 46 people in 2006 however a total of 105,286 employees jobs were either directly or indirectly reliant on BAE Systems.

3) BAE Systems were responsible for £158 m worth of direct investment in the UK with a total of £378 m worth of investment in the UK being indirectly attributable to BAE Systems.

4) BAE Systems had the third largest R&D spend of the top 850 UK firms in 2006. BAE Systems spent £101,000 on R&D for every £1 million in sales – over five times the national average.

The contribution that BAE Systems makes to the Lancashire economy should not be understated. It is by far the largest single industrial employer and is at the apex of the aerospace supply chain in the county.

For some six decades BAE Systems (and its predecessors) in Lancashire has been the centre of the most intensive development of military jet aircraft in the UK and has built up an unrivalled level of continuity and experience in aircraft design, manufacture and support. Today, BAE Systems' Military Air Solutions (MAS) Business Group is one of Europe's and one of the world's leading military aircraft businesses and the bulk of this activity is based in Lancashire at Warton and Samlesbury.

The company results in a range of direct, indirect and ‘induced’ benefits for Lancashire, including:-

Employment and Skills:-

Lancashire has the highest concentration of BAE Systems workforce employing around one third of UK employees

BAE Systems MAS employs c11,500 people in Lancashire, (7,000 at Warton, 4,100 at Samlesbury with the

remainder at a number of facilities in Preston) these are drawn from every constituency in Lancashire
At least the same number of jobs again are supported indirectly through partnerships, joint ventures and its supply chain


An estimated 19,500 employee jobs in Lancashire area are classified to the aerospace industry, making it by far the largest manufacturing sector in the sub-region, Annual Business Inquiry (ABI) 2008
The company makes a major contribution to the skills base in Lancashire and has recently announced a 10 year strategy to improve the skills of current workers and attracting future engineers into aerospace
BAE Systems invests significant amounts on education locally, including a £1million partnership with the University of Central Lancashire for research into energy management.
BAE Systems MAS’s Apprentice Training School in Preston has 200 apprentices going through its training scheme
In 2009, MAS recruited c50 graduates, the vast majority of which are based at Samlesbury or Warton

Value added contribution and investment:-

BAE Systems is much more than simply a ‘large employer’ in Lancashire and are a major source of high value-added and high wage jobs

GVA figures according to North West Aerospace Alliance Aerospace Cluster Mapping Study 2007
BAE Systems NW GVA/employee - £116k
Average UK aerospace GVA/employee - £104.3k
NW regional average GVA/employee - £15.5k
The company is a major contributor to UK fixed capital investment in Lancashire

· BAE Systems’ Samlesbury site is currently undergoing significant development which over the duration of the planned expansion (2007 – 2015) will potentially see hundreds of millions of pounds invested in the site helping sustain aerospace skills in Lancashire and the North West.

· The company estimates that in 2006 it spent £329m with its North West suppliers alone, had net capital expenditure across its sites averaging some £100m per annum and paid over £4m in taxes to local councils

Exports:-

BAE Systems operations in Lancashire are highly export-orientated (the company contributed £4.1 billion to UK exports in 2006, around 1.7% of total exported goods)

The added economic value of the company’s contribution is highly significant to Lancashire, especially in a period when public sector employment is likely to fall and high value private sector employment and new large-scale inward investment is much harder to develop.

Source: Aerospace Cluster Mapping Study, North West Aerospace Alliance, 2007 available online at http://www.nwda.co.uk/pdf/The%20Aerospace%20Cluster%20Strategy%202007%20Issue%201%20Oct%2007.pdf