Scottish Defence Dividend £250m Investment Launched

The UK’s security and economic growth in Scotland are top of the agenda as the Scotland Office and Ministry of Defence met last week with naval base chiefs and local authority leaders to discuss maximising the benefits from future-proofing HMNB Clyde.

Home to the Royal Navy Submarine Service and the UK’s nuclear deterrent, the base is Scotland’s largest military establishment and second biggest employment site with over 6,500 military and civilian personnel. 

The Ministers met navy chiefs and toured key facilities and received a briefing on how the £250 million will support upgrades to infrastructure and the working environment, ensuring the site is ready to accommodate next-generation nuclear submarines including the Dreadnought-class (which will carry the nuclear deterrent) and SSN-AUKUS (the Royal Navy’s future attack class that will replace the Astute-class fleet). 

The Ministers, navy chiefs and base staff then met with council leaders and local MPs from areas surrounding the Clyde to discuss how Clyde 2070’s defence dividend can be maximised by local communities for years to come. Additionally, they explored opportunities for effective coordination between government, local authorities and the defence sector, focusing on infrastructure development, skills training, regional economic opportunities and local job creation.

Approximately 26,100 skilled jobs - including shipbuilding - across Scotland are already supported by the Ministry of Defence’s annual multi-billion pound spend and the UK Government’s Brand Scotland campaign is working to build on that success and help the sector export its world-class technology internationally.

Scottish Secretary Ian Murray said:

"This defence dividend for Scotland will help ensure Britain’s security, deter our adversaries and drive economic growth in the area for years to come as part of our Plan for Change.

"With Faslane home to the nation’s first and final line of defence – the UK’s nuclear deterrent, it’s only right that Clyde 2070 represents one of the most significant UK Government investments over the coming decades. It will ensure the Royal Navy can deliver the Continuous At Sea Deterrent from a modern, efficient base which will result in a better environment for our hero submariners to live, work and train in. 

"Crucially it will also create skilled jobs - including for small and medium size firms - boost the economy and help tackle the critical skills gaps facing the country in sectors such as nuclear, construction, maritime and project management, by bringing together government, Scottish communities, industry, supply chains and academia to address the challenges. The Defence Nuclear Enterprise already supports a supply chain of over 3,000 businesses across the UK, benefiting regions like the West of Scotland, and I urge the Scottish Government to work with us on maximising these clear benefits."

Defence Nuclear Enterprise (DNE) is a partnership of organisations that operate, maintain, renew and sustain the UK’s nuclear deterrent as part of a national endeavour which supports more than 48,000 jobs across the country - set to rise to 65,000 in the next decade.

Minister for Defence Procurement & Industry Maria Eagle said:

"Our nuclear deterrent is the bedrock of the UK’s defence and the cornerstone of our commitment to NATO and global security and Scotland plays a crucial role in that. We are today re-affirming that unshakeable commitment by launching this multi-billion-pound investment to His Majesty’s Naval Base Clyde, which is vital to our deterrence capability.

"The initial £250 million of funding over 3 years will support jobs, skills and growth across the West of Scotland. This Government will keep the UK safe for generations to come while delivering on the Plan for Change and making defence an engine for growth."

Leader of Argyll and Bute Council Jim Lynch said:

"Close coordination with local councils and particularly Argyll and Bute is vital to maximise the potential economic benefits and to manage local infrastructure and skills issues as HMNB Clyde develops. I welcome the opportunity to discuss these issues with the Secretary of State for Scotland and the Minister for Defence Procurement & Industry."

The vital role of HMNB Clyde in the UK’s national security strategy was underscored in the recent Strategic Defence Review - launched by the Prime Minister at BAE Systems Govan shipyard in Scotland - with a commitment to construct up to 12 new nuclear-powered attack subs, building on the £15 billion investment set out for the UK’s sovereign nuclear warhead programme.

It follows the UK Government’s historic uplift in defence spending to 2.5% of GDP by April 2027, and the ambition to hit 3% in the next parliament, when economic and fiscal conditions allow. The Chancellor’s Spring Statement pledged a new era of security and national renewal, including a £2.2 billion increase in the UK-wide defence budget for 2025-26, on top of £2.9 billion announced at Autumn Budget.

This investment reflects the government’s commitment to national defence while bringing economic, skills, and employment benefits to Scotland. 

For over 50 years the site has operated and maintained the deterrent fleet – first with the Resolution Class of submarines and then the current Vanguard Class boats. During that time there has always been at least one nuclear-armed deterrent submarine on patrol at sea, providing the ultimate guarantee of our safety and security and of our NATO Allies.  

As a multi-generational effort, the renewal of the nuclear deterrent requires long-term direction so that the MoD and industry can manage risk and improve performance and value for money over time and £250m has been allocated immediately for the next three years. This investment will be focussed on three main areas:

• Early site enabling activity and master planning
• Development and approval for the first major programmes
• Working with industry to design an organisation and structure capable of delivering transformation at scale and pace for decades to come

The programme includes the need to meet defence net-zero targets and long-term climate change mitigation.

Last week recommendations were unveiled by the Defence and Economic Growth Taskforce to build upon the 272,000 UK industry jobs (11,800 in Scotland) directly and indirectly supported by government investment in the defence sector. When combining jobs supported in industry with MoD civilians and UK Regular Armed Forces personnel based in the UK, the figure is 463,000 (26,100 in Scotland).

The UK Government has already begun work on three of the report’s recommendations:

• Establishing a defence SME Hub to provide support to new market entrants
• Commencing work on a Defence Exports Office in the MoD, as announced in the Strategic Defence Review
• Committing to developing Defence Growth Deals across the UK at the Spending Review