Official Statistics

Indirect jobs supported by MOD expenditure with UK industry 2018/19

Published 15 October 2020

The Finance & Economics Statistical Bulletin series provides figures on the composition and scope of the Department’s expenditure, information on the impact of defence spending on the wider economy, and compares Ministry of Defence (MOD) spending to that of other departments and countries.

This publication presents estimates of indirect employment supported as a result of MOD expenditure with UK industry and commerce in 2018/19. The number of indirect jobs^{[footnote 1]} supported in the UK is also presented by industry group.

1. Key Points

77,000	Number of UK indirect jobs supported as a result of MOD expenditure with UK industry.
	This figure is 4.3% higher than in 2017/18 when an estimated 74,000 indirect jobs were supported.
196,000	Total number of direct and indirect UK jobs supported through MOD expenditure with UK industry.
	This figure is 3.3% higher than in 2017/18 when 190,000 jobs were supported.
1 in 130	Proportion of all direct and indirect jobs in the UK which are supported as a result of MOD expenditure with UK industry.
	This is up from 1 in every 140 jobs in 2017/18.
17,800	Number of indirect jobs supported across all UK industry by MOD expenditure on Shipbuilding and Repairing.
	MOD expenditure on Shipbuilding and Repairing in 2018/19 supported more indirect jobs across all UK industry than spend in any other single sector.
31,500	Number of indirect jobs supported in Technical, Financial and Other Business Services as a result of all MOD expenditure with UK industry.
	Total MOD expenditure supports more indirect jobs in this sector than any other industry group.

Responsible Statistician: Defence Expenditure Analysis Head of Branch

Telephone: 030 679 84442

Further information/mailing list: Analysis-Expenditure-PQ-FOI@mod.gov.uk

Defence Statistics welcomes feedback on the contents of this report as this is the first time MOD has published estimates of indirect jobs since 2009. If you have any comments or questions on the methodology, the value or quality of these statistics please contact us at Analysis-Expenditure-PQ-FOI@mod.gov.uk.

Would you like to be added to our contact list, so that we can inform you about updates to these statistics and consult you if we are thinking of making changes? You can subscribe to updates by emailing Analysis-Publications@mod.gov.uk.

Find out about call charges

2. Introduction

This publication provides statistics on the number of direct and indirect full-time equivalent (FTE) jobs supported in the UK by MOD expenditure with UK industry and commerce. Industry is defined as an economic activity concerned with the procurement and processing of raw materials into finished products. Commerce is defined as a business activity where goods and services are exchanged for value. Hereafter, MOD expenditure with UK industry and commerce will be referred to as MOD expenditure. Tables and figures present statistics for the most recent financial year and comparisons will be made in the narrative to previous financial years where appropriate.

This publication is intended as an annex to the previously released MOD Regional Expenditure bulletin using data as at the 2018/19 release. The intention after this one-off release is to subsume figures on indirect jobs into the wider Regional Expenditure bulletin so that all estimates are contained within one report and published on an annual basis. A detailed overview of the methodology is included to provide transparency of the approach taken to derive these estimates. This technical detail is just for the purpose of this one-off release and will later form part of the Regional Expenditure Background Quality Report.

Context

An estimate of employment supported by MOD has been produced in recent years within the Regional Expenditure bulletin. As well as looking at the split of direct expenditure with UK industry across UK regions, the bulletin estimates the number of direct jobs supported. These are the jobs supported within companies receiving payments for goods and services directly from MOD.

Prior to this, estimated jobs figures were published as part of the UK Defence Statistics (UKDS) publication and included both direct and indirect jobs. Indirect jobs are those that occur further down the supply chain through sub-contracting or via suppliers to the direct contractor.

There has been increased demand to once again produce figures on indirect jobs and the information contained in this bulletin has potential for a wide range of users including the media, politicians, policy professionals and the general public.

Comparisons over time: overall

These statistics are based on expenditure data from MOD contract information and display natural variability. Due to this we would expect total expenditure to fluctuate year-on-year due to large value contracts starting and ending across different financial years or large one-off payments occurring. MOD Direct Expenditure figures published up until 2009 in UK Defence Statistics (UKDS) showed a similar amount of variation between years to the figures presented in the rest of this bulletin. This variability is likely carried over to the jobs estimates, which are furthermore particularly sensitive to changes in employment figures provided by the Office for National Statistics (ONS).

Comparisons to previously published statistics

Please note that whilst the methodology used to produce these estimates is broadly similar to the employment estimates published until 2009 in UKDS , they should not be directly compared due to changes in the composition of MOD contract data and differences in MOD output per FTE. Since estimates of indirect employment were previously produced, output per FTE has increased across most industries. Output per FTE is calculated as an industry’s total output divided by its number of FTE employees and can be used as an indicator of how much output is generated for each FTE employee in the industry. If MOD expenditure in an industry remains the same and output per FTE employee increases, then we see greater productivity per FTE employee and witness a reduction in the number of jobs estimated. This is of particular relevance in industries where MOD expenditure is high such as Shipbuilding and Aircraft manufacturing and repair. In addition, earlier estimates also included expenditure and jobs supported as a result of exports.

ADS (a trade organisation for Aerospace, Defence and Security) have published more recent estimates of indirect jobs, which were included within their 2017 Defence Outlook Report. They estimated the Defence Sector supported approximately 260,000 jobs (140,000 direct and 120,000 indirect); this figure has subsequently been referenced in the Dunne Review, Ministerial speeches and internal briefings. MOD do not have enough oversight to fully quality assure these figures, though it is important to note that the ADS estimates are based on a specific definition of what constitutes the defence sector and also include estimated employment as a result of defence exports. In contrast, the estimates produced in this publication are based on all MOD expenditure with industry and include elements of spending that wouldn’t necessarily be considered as ‘defence’, such as financial services, so the two estimates are not directly comparable.

Relevance

Statistics on MOD supported employment with UK industry were published annually up until 2009 in the UK Defence Statistics publication. ADS haven’t provided any updates to their 2017 estimates of indirect jobs in the defence sector. This publication therefore reintroduces estimates produced by MOD on indirect employment to fulfil the ongoing requests for this data.

These statistics aid the measurement and monitoring of various employment targets throughout the MOD, including those set out in the SDSR 2015. The scope of the publication to meet user needs will continue to be reviewed based on feedback from users.

Accuracy

These estimates on indirect employment provide a broad indication of the number of jobs that occur further down the MOD supply chain through sub-contracting or via suppliers to the direct contractor. When combined with the estimates of direct jobs from MOD’s Regional Expenditure bulletin, they provide a more complete picture of the impact of MOD expenditure on UK employment. Due to the method used to calculate the estimates we are unable to provide measures of uncertainty. To reduce the potential for error in the estimates, a regional breakdown on the number of indirect jobs supported by MOD expenditure is not provided. This is due to there being no regional Input-Output Analytical Tables (IOAT) produced by the ONS which, in part, form the basis of these statistics.

3. Indirect Jobs Supported by MOD Expenditure with UK Industry

Indirect jobs supported by MOD expenditure increases by 4% in 2018/19 to 77,000.

Full-Time Equivalent (FTE) employment FTE employment is a figure that allows part-time workers’ hours to be put into the same units as full-time workers. This publication often uses the term jobs to mean full-time equivalent employment.

UK output per Full-Time Equivalent employment This shows how much money an industry outputs for each person in FTE employment. It therefore allows us to estimate the number of jobs supported by indirect MOD expenditure by dividing expenditure with UK industry by output per FTE employment for that industry.

MOD expenditure indirectly supported an estimated 77,000 full-time equivalent jobs in the UK in 2018/19. This figure reflects the employment supported by indirect expenditure occurring within the supply chain and represents an increase of just over 4% from the previous year.

The number of indirect jobs supported by MOD expenditure has remained relatively consistent apart from a slight fall in 2017/18. A similar drop was also seen for this same year in the estimate for direct jobs in MOD’s Regional Expenditure bulletin. This was a result of lower ONS employment figures in three key sectors where MOD expenditure is historically high, namely Shipbuilding, Aircraft Manufacture and Financial Services. Here, this had particular relevance to indirect employment in the Technical, Financial Services and Other Business Services sector since this accounts for the largest proportion of indirect jobs supported through MOD expenditure. It increased the average output at basic prices per FTE employment which, when used to divide intermediate MOD demand (that which occurs through the supply chain), led to a decrease in jobs supported.

Figure 1: Total Indirect Jobs Supported by MOD Expenditure by Financial Year

4. Total Jobs Supported by MOD Expenditure with UK Industry

Total jobs supported by MOD expenditure rises by 6,000 in 2018/19 to 196,000 jobs.

It is estimated that MOD expenditure supported 196,000 FTE jobs in the UK in 2018/19 which is equivalent to 1 in every 130 jobs. This figure includes both direct and indirect jobs so accounts for employment through the supply chain as well as that arising from direct supplier payments. It is just over 3% higher than estimates for 2017/18 when 190,000 jobs were supported.

The increase from 2017/18 to 2018/19 was equally shared in terms of absolute value between direct and indirect jobs where they both rose by 3,000. Over the past six financial years the number of indirect jobs has been roughly two thirds that of the direct jobs estimate in any year.

Total jobs figures experience inherent variability due to the fluctuations of year-on-year total contract expenditure from which they are derived. They are also particularly sensitive to changes in employment figures provided by the ONS. For this reason, year-on-year comparisons should be used with caution.

Figure 2: Direct and Indirect Jobs Supported Through MOD Expenditure with UK Industry

The figure of 196,000 jobs only includes jobs supported through MOD expenditure with UK industry and does not include civilian personnel employed by the MOD nor those serving in the Armed Forces. Figures published by Defence Statistics show that in April 2018 the MOD employed 57,000 civilian personnel and 147,000 UK Regular Forces. This shows that through direct expenditure, indirect expenditure and direct public sector employment, the MOD supported just over 399,000 jobs in 2018/19, almost 383,000 of which were based in the UK.

5. Indirect Jobs Supported by MOD Expenditure with UK Industry by Industry Group

MOD expenditure on Shipbuilding supports the most indirect jobs across UK wide industry.

Standard Industrial Classification (SIC) codes These codes are collected on the MOD contract system and classify which specific industry a contract relates to. These SIC codes are grouped together into industry groups.

Please note that generally only one SIC code is assigned to each contract, even though many contracts will involve multiple different industries. On some of the higher value contracts we have sought more detailed industry information, however for many contracts only a single code is available

When viewed in terms of the number of indirect jobs that MOD expenditure in each industry group alone supports, it is expenditure on Shipbuilding and Repairing that comes out on top for indirect employment. In 2018/19, £3.3 billion was spent in the Shipbuilding industry which supported 22,000 direct jobs in the same industry group and a further 17,800 indirect jobs across all industry sectors. It should be clearly noted that these indirect jobs are not necessarily further jobs in the Shipbuilding industry but rather made up of all industry components that are required to deliver end products and services in this sector.

Services and manufacturing dominate indirect jobs supported.

The highest number of jobs indirectly supported through MOD expenditure in 2018/19 was in the Technical, Financial Services and Other Business Services sector with 31,500 jobs. Since 2013/14 it has supported over double the number of jobs than the next ranked industry group, Other Manufacturing. Combined, these two industry groups accounted for 59% of all indirect MOD supported employment in 2018/19.

It is perhaps not surprising that there are more jobs supported in services or general manufacturing within the extended supply chain than in any other industry groups. These are likely to form part of the output from some of the more specialised industries where MOD expenditure is high such as in Shipbuilding, or Aircraft and Spacecraft manufacture.

Figure 3: The Number of Indirect Jobs Supported Through MOD Expenditure by Industry Group 2018/19

Note:

‘Technical, Financial Services & Other Business Services’ includes Financial Services, Business Services, Education, Health and other Service Activities.

‘Other Manufacturing’ excludes Weapons and Ammunition, Electronics, Precision Instruments, Shipbuilding and Repairing, and Aircraft and Spacecraft.

6. Methodology

This section sets out the data requirements and processes used to create the tables and charts in this bulletin. It also discusses the assumptions made as well as a number of limitations.

Sources

As well using the expenditure output produced as part of MOD’s Regional Expenditure bulletin, considerable data input for the estimation of indirect jobs relies upon releases from the Office for National Statistics (ONS).

• Supply-Use Tables (SUT) are produced annually to show estimates of industry inputs and outputs, product supply and demand, and gross value added for the UK. SUTs for 1997 to 2017 are consistent with the UK National Accounts in Blue Book 2019.

• Input-Output Analytical Tables (IOAT) are produced semi-regularly and are derived from the SUTs. They highlight how products are used to produce further products and satisfy final demand across ONS industry codes.

• Data on UK employment and turnover by MOD SIC group is produced by the ONS as a subset of the Business Register and Employment Survey (BRES) and Annual Business Survey (ABS).

Assumptions and Limitations

Various assumptions have had to be made throughout the process when concrete or reliable information was not available. These assumptions are listed below:

• MOD’s financial year data can be matched to ONS calendar year data.

• Detailed Input-Output Analytical Tables do not come out every year due to the time it takes to produce them. For absent years it must be assumed that changes in product use and demand has not altered significantly since the last iteration of the tables.

• SUTs have a year’s lag on them so MOD’s latest expenditure data will be matched up to the previous year’s SUTs and it must be assumed that total domestic output of products does not significantly change year on year.

• Defence output from a particular SIC product group will have similar characteristics as total output for the sector as a whole.

• The MOD vector of final demand is in current prices whereas the ONS analytical tables are in basic prices so it must be assessed whether they are compatible. Basic prices are the amounts received by the goods or services produced minus any taxes and subsidies on products. The expenditure in the MOD vector of final demand does exclude VAT but in order to match to basic prices it is assumed that other taxes paid by MOD are relatively small.

• Not every ONS SIC group falls into a single MOD SIC group, some overlap across multiple groups. For example, ONS SIC 26 for ‘Computer, electronic and optical products’ lies in MOD SIC groups 22 for ‘Office machinery and computers’, 24 for ‘Electronics’ and 25 for ‘Instrument engineering’. Decision rules must be applied to determine how these overlaps should be grouped. Currently these splits are apportioned equally.

• Input-Output Tables are prepared as product by product while SIC groups used are, by definition, industry based. There is therefore a mismatch between the data on a product basis then being used by industry to calculate employment.

• No reliable regional split can currently be given as there are no regional Input-Output Analytical Tables. It takes considerable time and effort for the ONS to produce UK tables so producing regional ones as well is not feasible. So, as is stands, indirect jobs are reported for the whole of the UK rather than by region as this would require the large assumption that each region has the exact same make up for product supply, use and demand.

Method

To estimate the number of indirect jobs supported in the UK by MOD expenditure, we use direct MOD expenditure with UK industry as a measure of MOD’s demand for products. The ONS Domestic Use Table can be used to show total UK wide demand and output (including intermediate products) arising from this MOD demand. Subtracting MOD final demand from this leaves just the intermediate demand (i.e. that which occurs throughout the supply chain). An estimate of UK output per FTE employment can be calculated using the ONS Supply of Products Table and BRES employment data. The amount of UK output generated from MOD intermediate demand can then be divided by output per FTE employment to determine the number of indirect jobs supported by MOD expenditure.

Figure 4: Overview of Methodological Process

This approach has been applied over that of employment multipliers since it is consistent with the method of estimating direct jobs in MOD’s Regional Expenditure bulletin whereby jobs are estimated as a ratio of industry output to employment. As such, the data required for MOD expenditure and UK employment is readily available to Defence Statistics. The applied method also allows for the exclusion of employment within the public administration and defence sector. The approach is broadly consistent with the way estimates were previously produced by MOD in UKDS.

In-year MOD expenditure is captured on MOD’s contract payment system. Using this and improved location and work type information, MOD expenditure is distributed across Location of Work (LOW) codes and SIC groups and reported on in the Regional Expenditure bulletin. Further detail on the method of expenditure distribution can be found in the Regional Expenditure background quality report. The output from this process is a matrix of expenditure across SIC groups and UK regions.

Since there are no regional SUT tables, the regional split is ignored for the estimation of indirect jobs and so the output expenditure is consolidated to become a single vector of MOD final demand split by MOD SIC groups 1 to 52.

The ONS Domestic Use Table frequently appears in later releases of the UK Input-Output Analytical Tables as the IOT table, it being the main Input-Output Table. It shows which products (rows) go to produce other products (columns) as intermediate production.

Table 1: Format of IOT Table (Domestic Use, Basic Prices, Product by Product)

At the base of the table can be found the total output for each product after allowing for taxes, subsidies, etc. Owing to the nature of the tables and their initial construction, they are balanced and the total output equals total demand.

Consider a reduced example from the 2013 Input-Output Analytical Tables. Table 2 shows that the product of ‘Air and spacecraft, and related machinery’ that goes into the product of ‘Weapons and ammunition’ is £1.6 million. The final product will then have some element of value added through taxes, compensation of employees, etc. as shown at the bottom of Table 1 before its total output is found.

Table 2: Reduced Section of 2013 Input-Output Domestic Use Table at Basic Prices, Product by Product

		ONS Product Group
ONS Product SIC Code	ONS Product Description	25.4: Weapons and ammunition (£ millions)
27	Electrical equipment	30.2
28	Machinery and equipment n.e.c.	24.5
29	Motor vehicles, trailers and semi-trailers	11.8
30.1	Ships and boats	0.0
30.3	Air and spacecraft, and related machinery	1.6

Currently there is a mismatch between the ONS SIC codes and MOD SIC groups. Starting with the relevant IOT showing domestic use in basic prices, product by product we can aggregate the groupings by simply summing rows to go from the 100+ ONS SIC codes to MOD’s 52 SIC groups. Where SIC codes fall into multiple SIC groups a decision rule is applied to accommodate the overlaps whereby amounts are apportioned equally. This aggregation keeps all row and column totals intact but allows us to view demand according to MOD’s own SIC groupings.

As it stands, Government expenditure is included within the intermediate demand section of the Domestic Use Table (Table 1). Since we are not interested in subsequent jobs in the public administration and defence sector, any intermediate demand against SIC group 48 is nilled out in both row and column. This is considered consistent with the estimation of direct jobs where expenditure identified as being with other government departments is removed.

Dividing each cell of the aggregated use table by the column total produces a matrix of coefficients (also known as the A matrix). This new matrix shows that when producing one final unit of a certain product, how much of each product is required across all SIC groups. For example, in producing weapons and ammunition you are going to need elements of metal work and electrical components among others, as well as further work in the weapons and ammunition sector itself.

Table 3: Reduced Example of the A Matrix (Matrix of Coefficients)

	SIC Group 1	SIC Group 2	SIC Group 3
SIC Group 1	0.09	0.38	0.04
SIC Group 2	0.10	0.21	0.22
SIC Group 3	0.79	0.00	0.01

Table 3 shows a reduced example of a constructed A matrix and the interactions between three products. It shows that to produce one unit of product from SIC group 1 it would require 0.09 units of SIC group 1, 0.10 of SIC group 2 and 0.79 of SIC group 3. However, since SIC group 2 also has interactions with SIC groups 1, 2 and 3, these requirements would also need to be calculated and factored in. These interactions would go on infinitely.

Instead of doing this manually for each individual interaction we turn to matrix calculations to multiply the A matrix by our demand for each step.

Let f be the initial vector of final demand, where for example,

Then A x f gives the secondary product requirements, A x A x f gives the tertiary product requirements, and so on. These interactions are repeated infinitely which can be written as,

f + Af + A²f + A³f + … .                                                                                 (†)

Let I be the identity matrix. The above is then equivalent to

(I + A + A² + A³ + …)f.

We want to reduce this infinite series into a finite form which we can calculate explicitly. For brevity, let R = I + A + A² + A³ + … . Then, since

I + A + A² + A³ + … = I + A(I + A + A² + … ),

we have R = I + AR.

We can now rearrange this as follows:

Therefore, we may reduce the infinite series I + A + A² + … to the Leontief Inverse Matrix, (I - A)^-1, which shows how much of each industry’s output is needed to produce one unit of a given industry’s output. For any vector of final demand, total demand for the product is found by multiplying it by the Leontief Inverse.

We can therefore write (†) as (I - A)^-1f and calculate the total demand for the above example:

So, to produce one full unit of product from SIC group 1 we would require 1.34 units of total product of SIC group 1, 0.47 of SIC group 2 and 1.07 of SIC group 3.

To create a MOD version of the Leontief matrix we take the aggregated domestic use table and then perform these matrix transformations. This therefore produces a Leontief matrix of 52 by 52 SIC groups which then directly matches up to MOD’s breakdown of SIC groups used to report on estimated job numbers.

MOD total demand across SIC groups is then calculated by multiplying the Leontief matrix by the vector of final demand, as per the example above. Importantly, to account for the jobs supported by the direct expenditure across SIC groups, we only calculate indirect jobs on the difference between MOD total demand and the final demand vector. This is known as the intermediate demand, that which occurs throughout the supply chain.

Total Demand – Final Demand Vector = Intermediate Demand

In order to determine employment numbers, we start by calculating output at basic prices per FTE employment. The SUTs include a Supply of Products table which features data on total domestic output of products at basic prices. Being in basic prices ensures it is consistent with that of the IOT table.

A MOD version of the SUT’s Supply of Products table based on MOD’s 52 SIC groups can be created by aggregating SIC groupings by the same method applied in compiling the MOD’s IOT. This returns total domestic output of products at basic prices broken down according to MOD SIC groups. Using the employment data gathered in the BRES, dividing output by employment here provides the output at basic prices per FTE employment. The number of indirect jobs can then be estimated by dividing the intermediate demand (MOD total demand minus the MOD vector of final demand) by these output at basic prices per FTE employment figures.

Table 4: Reduced Example of Indirect Jobs Estimation

	Total Domestic Output of Products at Basic Prices (£)	Total FTE Employment	Output at Basic Prices per FTE Employment (£ per FTE)	Intermediate Demand	Indirect Jobs Estimate
SIC Group 1	2000	40	50	0.34	0.0068
SIC Group 2	900	15	60	0.47	0.0078
SIC Group 3	12000	160	75	1.07	0.0143

So, with our given final demand vector plus the example output and employment data in Table 4, for each £1 increase in final demand of SIC group 1, intermediate demand would support an estimated 0.0068 indirect FTE jobs in SIC group 1, 0.0078 in SIC group 2 and 0.0143 in SIC group 3.

For further detail on this methodology, a full worked example can be found in Annex A.

7. Glossary

Annual Business Survey (ABS) is the main business survey carried out by the ONS. It is used to collect financial information on a large proportion of the UK economy and includes figures such as turnover, employment costs and capital expenditure.

Basic Prices indicate values excluding taxes and subsidies on products.

Business Register and Employment Survey (BRES) is a survey carried out by the ONS that provides information on employee and employment estimates by location and industry.

Constant Prices indicate a value from which the effects of inflation have been removed. A constant price refers to a year as the basis for the calculation, e.g. “constant 2018/19 prices”. This would mean that historic expenditure figures have been adjusted so that they are in 2018/19 prices and take account of the effects of inflation.

Current Prices are when expenditure is presented without removing the effects of inflation. This can cause difficulties when comparing expenditure across different years as inflation affects the value of a currency.

DEFFORM 57 Completion of this form is mandatory for all contracts where the Defence Business Services (DBS) is the payment authority. It is used to set up a contract with DBS for payment purposes and is an important source of capturing data on contract activity within the Ministry of Defence. This form is now primarily completed electronically.

Full-Time Equivalent (FTE) employment is a figure that allows part-time workers’ hours to be put into the same units as full-time workers.

HQ Contracts are formal contracts set up by MOD Core Department which require a DEFFORM 57 to be raised.

Industry Groups are 22 groups based on the Standard Industrial Classification (SIC) 2007 guidelines maintained by the Office for National Statistics (ONS). Industry groups combine SIC codes that are related to similar types of activity. A breakdown of which SIC codes belong in each industry group can be found in the accompanying data tables to this publication.

Input-Output Analytical Tables (IOAT) are produced semi-regularly by the ONS and are derived from the Supply-Use Tables. They highlight how products are used to produce further products and satisfy final demand across ONS industry codes. These tables were historically produced once every five years due to the time it takes to compile additional data requirements yet due to the increased demand for their use this has been reviewed to become more timely. At point of release, the latest detailed tables are still those from 2015.

Input-Output Table (IOT) is one of the main tables from the Input-Output Analytical Tables. It shows which products go to produce other products as intermediate production.

Intermediate Demand is demand that occurs throughout the supply chain.

Leontief Inverse Matrix shows how much of each industry’s output is needed to produce a unit of a given industry’s output. It is calculated from the ONS Input-Output Analytical Tables (IOATs).

Location of Work (LOW) Codes are entered into the DEFFORM 57 and indicate where work for a contract is being carried out. There are many codes for different areas of the UK and these have been amalgamated to identify the regions being reported on.

Ministry of Defence (MOD) is the United Kingdom Government Department responsible for implementation of Government defence policy. It is the headquarters of the British Armed Forces. The principal objective of the MOD is to defend the United Kingdom and its interests. The MOD manages day to day running of the armed forces, contingency planning and defence procurement.

Miscellaneous Contracts are the payment method employed by DBS Finance (the MOD’s primary bill paying authority) for running service items such as the provision of utilities. These items are covered by “miscellaneous” transactions, where no MOD HQ Contract exists. These agreements for goods or services will have been set up locally between the MOD Branch and the supplier and are legally binding.

MOD Vector of Final Demand is in-year MOD expenditure for a given financial year broken down by SIC groups.

Office for National Statistics (ONS) is responsible for the production of a wide range of independent economic and social statistics. The statistics are there to improve understanding of the United Kingdom’s economy and society, and for planning the proper allocation of resources, policy-making and decision-making. It is the executive office of the UK Statistics Authority, a non-ministerial department which reports directly to Parliament. ONS is the UK Government’s single largest statistical producer.

Other Government Departments (OGDs) refers to government departments outside the MOD that the MOD spends money with.

Standard Industrial Classification (SIC) codes classify business establishments and other statistical units by the type of economic activity in which they are engaged. The classification is maintained by the ONS. When a HQ contract is recorded on MOD’s Contracting, Purchasing and Finance (CP&F) system, contract owners are asked to enter SIC code information. From 2019/20, an upgrade to the Contracting, Purchasing and Finance (CP&F) system allows contract owners the option to add in multiple SIC codes.

Supply-Use Tables (SUT) are produced annually by the ONS and show estimates of industry inputs and outputs, product supply and demand, and gross value added for the UK.

8. Further Information

8.1 Rounding

Where rounding has been used, totals and sub-totals have been rounded separately and so may not equal the sums of their rounded parts. Figures on total jobs supported by MOD expenditure have been rounded to the nearest 1,000.

8.2 Revisions

Corrections to the published statistics will be made if errors are found, or if figures change as a result of improvements to methodology or changes to definitions. When making corrections, we will follow the Ministry of Defence Statistics Revisions and Corrections Policy. All corrected figures will be identified by the symbol “r”, and an explanation will be given of the reason for and size of the revision. Corrections which would have a significant impact on the utility of the statistics will be corrected as soon as possible, by reissuing the publication.

8.3 Contact Us

Defence Statistics welcomes feedback on our statistical products. If you have any comments or questions about this publication or about our statistics in general, you can contact us as follows:

Defence Statistics (Defence Expenditure Analysis)

Telephone: 030 679 84442

Email: Analysis-Expenditure-PQ-FOI@mod.gov.uk

If you require information which is not available within this or other available publications, you may wish to submit a Request for Information to the Ministry of Defence under the Freedom of Information Act 2000.

If you wish to correspond by mail, our postal address is:

Defence Statistics (Defence Expenditure Analysis)
Ministry of Defence
Oak 0 West, #6028
MOD Abbey Wood North
Bristol
BS34 8QW

For general MOD enquiries, please call: 020 7218 9000

1. This publication often uses the term jobs to mean full-time equivalent employment. ↩