Official Statistics

Finance and economics annual statistical bulletin: MOD regional expenditure with UK industry and commerce and supported employment 2017/18

Published 31 January 2019

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 MOD expenditure with UK industry and commerce in 2017/18 by UK region and industry group. The number of jobs[footnote 1] supported by this expenditure in the UK is also presented by region and industry group. The statistics include direct MOD expenditure with UK industry and commerce only, and exclude all other MOD spend types.

1. Key Points

£18.9bn Total MOD expenditure with UK industry and commerce.
  This remains unchanged from 2016/17 when adjusting for inflation.
115,000 Number of UK jobs supported from direct MOD expenditure with UK industry.
  This figure is 9% less than in 2016/17 when 126,000r jobs were supported.
11,000 The drop in jobs supported from direct MOD expenditure with UK industry since 2016/17.
  This was largely due to the restructuring of Dstl and lower ONS employment figures in industries where MOD expenditure was highest.
1 in 220 Proportion of all jobs in the UK which are supported through direct MOD expenditure with UK industry.
  This is down from 1 in every 210 jobs in 2016/17.
£60 per person East of England saw an increase in per person spend of £60, up to £190 per person in 2017/18.
  Investment in RAF Marham helped to boost MOD expenditure in the East of England from £130 per person in 2016/17.

Responsible Statistician: Defence Expenditure Analysis Head of Branch

Telephone: 030 679 84442

Further information/mailing list: DefStrat-Econ-ESES-PQFOI@mod.gov.uk

Background Quality Report: Background Quality Report

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 DefStrat-Stat-Enquiries-Mailbox@mod.gov.uk

Find out about call charges

2. Introduction

This publication provides statistics on direct 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, direct 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. Statistics for all five financial years are available in the supplementary data tables.

MOD expenditure will be presented in the following ways:

  • by NUTS 1 regions (for clarity these will be referred to as regions in text).
  • per person by UK region, to provide some context to the expenditure figures. By presenting expenditure per person the population differences between regions are accounted for.
  • by industry group.

This publication also presents estimates on the number of full-time equivalent (FTE) jobs supported by MOD expenditure. These will be presented:

  • by NUTS 1 regions.
  • as the number of FTE jobs supported for every 100,000 people in FTE employment in each region. This measure is similar to the per person expenditure figure as it considers the employment levels of each region and will make these figures more directly comparable.
  • by industry group.

These statistics do not cover indirect expenditure or supported jobs further down the supply chain.

Comparisons over time: overall

These statistics are based on MOD contract information and display natural variability. Because of 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 showed a similar amount of variation between years to the figures presented in the rest of this bulletin.

It should be noted also that prior to 2017/18, the total expenditure figure included direct MOD payments to Defence Science and Technology Laboratory (Dstl) of £590 million in 2015/16 and £560 million in 2016/17. Dstl ceased to be a Trading Fund in April 2017 and are therefore no longer paid through contracts processed by Defence Business Services (DBS) Finance Systems and are instead funded through the central MOD budget through which it continues to run its own financial activities. This means that substantial payments are excluded from expenditure totals from 2017/18 onwards in comparison to earlier years.

Comparisons over time: by region and industry group

Throughout the bulletin we will compare data across different financial years. With a short time series these conclusions could be due to the inherent variability of contract data and not indicative of a long-term trend. Therefore, these comparisons should be used with caution.

Comparisons over time: accounting for inflation

In simple terms, inflation measures how the cost of goods/services change over time. Inflation of 2% would mean that something that you could purchase for £1 last year would cost you £1.02 this year. Because of this, inflation can mask effects when comparing expenditure across different years. To account for inflation, expenditure is calculated in constant prices. This adjusts expenditure in one year so that it is in another year’s prices. Constant 2017/18 prices are used when comparing across different financial years.

Comparisons over time: to previously published statistics

Please note that these statistics are broadly similar to the Direct Expenditure with UK industry statistics published until 2009 in UK Defence Statistics, but should not be directly compared due to methodological differences.

Several assumptions have been made during analysis of this data. For further information on these, and for more detailed explanations of the applications and limitations of this data, please refer to the Background Quality Report.

To access all of the data in both current and constant prices please see the supplementary data tables.

3. MOD Expenditure with UK Industry

MOD Expenditure remained unchanged from 2016/17.

Total MOD expenditure in 2017/18 was £18.9 billion. Although this is an increase of 1.7% against last year’s reported expenditure, when adjusting for inflation it remains relatively unchanged. Total expenditure would likely have increased were it not for the restructuring of Dstl, as detailed below, which now only accounts for £2 million of MOD expenditure in 2017/18 in contrast to £560 million in 2016/17.

Figure 1: Total MOD Expenditure by Financial Year

Line graph showing the change in total MOD expenditure over the past five years. Expenditure in terms of current prices has remained fairly consistent whereas after adjusting for inflation it shows a decrease year on year from 2014/15 to 2017/18.

South West and South East continue to account for more than half of MOD expenditure.

Due to a high proportion of the MOD’s biggest suppliers being based in the South West and South East of England, these regions accounted for 51% of total expenditure in 2017/18. This proportion has remained consistent over the past five years. In the South West, MOD spent £520 million on a through life enabling contract for complex weapons with MBDA in 2017/18, which is more than was spent in each of the Yorkshire & The Humber, Northern Ireland, and North East regions.

Expenditure in the South East has decreased by £633 million since 2016/17. This is largely due to Dstl changing from a Trading Fund to an On-Vote Defence Agency in April 2017, meaning Dstl is no longer paid through contracts processed by DBS Finance Systems and are instead funded through central MOD budget. This impacted the way Dstl expenditure has been apportioned by region. This also influenced the South West, but the effect was offset by expenditure of £130 million on new contracts let in 2017/18 in the region, resulting in no change against last year’s figures.

Figure 2: MOD Expenditure by Region 2017/18

Bar chart showing MOD expenditure split by region in descending order for 2017/18. The South West and South East appear first and second respectively, accounting for over half of all UK spend.

Scotland has shown steady growth for the fourth year running, averaging a yearly increase in total expenditure of 4.2% since 2013/14. This is not due to one particularly high value contract in the region but rather a continued growth in contract payments across the board.

Yorkshire and The Humber saw a 38.4% increase in expenditure from 2016/17 to 2017/18 which included a £15 million payment towards an ongoing construction development project at Catterick Garrison. Despite this it remains in 10th place, out of 12, with little over half the total expenditure of the West Midlands in 9th place.

4. MOD Expenditure per Person with UK Industry

MOD expenditure per person continues to reduce in the North East.

Expenditure per Person Calculated by dividing the total MOD expenditure by the population of an area. This shows how much money is spent for each person living in that area.

Over the past five years, expenditure per person in the North East has fallen from £110 in 2013/14 to £40 in 2017/18, a 64% decrease. Total expenditure in the region has also decreased at a similar rate. This is largely due to the decrease in payments between 2013/14 and 2017/18 to BAE Global Combat Systems and Hewlett Packard Enterprise, as large contracts with these companies draw to an end.

MOD average expenditure per person for the UK was £290 in 2017/18. This is unchanged from 2016/17 but is a 6.5% decrease since 2013/14. Total expenditure follows a similar pattern with a decrease of 5.9% in the same period.

Figure 3: MOD Expenditure per Person with UK Industry by Region 2017/18

Map of the UK split by region showing MOD expenditure per person in 2017/18. Even after adjusting for regional populations the South of England still shows the highest expenditure levels.

London has fallen to 8th place in Figure 4, from 5th in Figure 2 which displays total expenditure, due to its high population density. In contrast, Wales rises to 3rd from 7th when expenditure is adjusted by population, with only the North East and Northern Ireland having a smaller population than Wales.

Figure 4: MOD Expenditure per Person with UK Industry by Region 2017/18

Bar chart showing MOD expenditure per person split by region for 2017/18, in descending order. It shows that that the £40 per person in the North East is vastly lower than the £940 per person spend in the South West.

Investment in RAF Marham boosts East of England to sixth in regional rankings.

In 2017/18 the MOD spent £103 million with Lockheed Martin at RAF Marham in Norfolk. This helped to build a brand-new maintenance hangar with a state-of-the-art training centre along with resurfaced runways and new landing pads to accommodate vertical landings. RAF Marham will play home to the UK’s nine F-35 Lightning jets which will form the backbone of the UK’s combat air fleet alongside the Typhoon jets, that have now been fitted with a state-of-the-art complex weapons suite to vastly increase their capability.

This has contributed to the East of England jumping two places from 8th to 6th in the expenditure per person rankings. This translates to an increase in per person spend of £60 from £130 per person in 2016/17 to £190 per person in 2017/18 in the region. Despite this increase, there is still an expenditure gap of £100 per person between the East of England and the North West, which currently sits in 5th place.

Figure 5: MOD Expenditure per Person, Ranked from Highest (1) to Lowest (12) by Region

Line graph showing MOD expenditure per person, ranked from highest to lowest by region from 2013/14 to 2017/18. The graph shows the South West and South East have remained first and second respectively since 2013/14.

While the North East, Northern Ireland, and Yorkshire and the Humber regions have fluctuated between 10th, 11th and 12th ranking, due to smaller levels of expenditure than the highest-ranking regions, this variation was most likely caused by the inherent variability of contract payments over time. Yorkshire and the Humber had per person spend of £60 in 2017/18 and the next ranked region, the West Midlands, had per person spend of £110 showing there is a considerable gap between the bottom three and the remaining regions.

5. MOD Expenditure with UK Industry by Industry Group

Expenditure gap between Shipbuilding and Aircraft manufacture continues to grow.

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 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.

In 2014/15 Shipbuilding & Repairing expenditure overtook Aircraft & Spacecraft expenditure. Since this time, the gap in total expenditure has increased to £1.49 billion. Shipbuilding expenditure has increased at an average yearly rate of 9.3% since 2014/15 while Aircraft expenditure has decreased at 9.8% per year in the same time frame. Contracts for the Dreadnought-class Submarine and Type 26 Frigate have contributed to the continued increase in Shipbuilding expenditure.

Weapons and Ammunition has jumped to 4th highest industry group by expenditure. That’s up from 7th in 2016/17 with an increase in total expenditure of 19.7% in the last year. This is largely due to a £520 million payment in 2017/18 for the through life enabling contract for complex weapons with MBDA, mentioned earlier.

Figure 6: MOD Expenditure by Industry Group 2017/18

Bar chart showing MOD expenditure by industry group in 2017/18, in descending order. The industry group of Technical, Financial Services and Other Business Services is top representing 23% of all in year spend.

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. Jobs Supported by MOD Expenditure with UK Industry

Jobs supported by MOD Expenditure falls by 9%.

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

It is estimated that MOD expenditure supported 115,000 full-time equivalent jobs in the UK in 2017/18 (this is equivalent to 1 in every 220 jobs). This figure is derived from direct MOD expenditure and therefore does not reflect employment supported by indirect expenditure further down the supply chain. This figure is 9% less than in 2016/17 when 126,000r jobs were supported. Total MOD expenditure in 2017/18 with UK industry remained relatively unchanged which may make the decrease in jobs supported surprising.

Why have jobs supported by MOD expenditure fallen?

It stems from a decrease in ONS employment figures in three key sectors where MOD expenditure is high; Shipbuilding, Aircraft Manufacture, and Financial Services. This resulted in an increased average turnover by FTE employment which, when used to divide total MOD expenditure, leads to a decrease in jobs supported.

The figure of 115,000 jobs only includes jobs supported through MOD expenditure and does not include civilian personnel employed by the MOD or those serving in the armed forces. Figures published by Defence Statistics show that in October 2017 the MOD employed 57,000 civilian personnel and 148,000 UK regular forces. Therefore, through both expenditure with UK industry and direct employment, the MOD supported just over 319,000 jobs in 2017/18, almost 302,000 of which were based in the UK.

In much the same way as we expect fluctuations in the year-on-year total contract expenditure, the total jobs figures also experience inherent variability and are particularly sensitive to changes in the turnover and employment figures provided by the ONS. For this reason, year-on-year comparisons should be used with caution.

Figure 7: Total Jobs Supported by MOD Expenditure by Financial Year

Line graph showing the change in total jobs supported by MOD expenditure from 2013/14 to 2017/18. It shows a decrease of 11000 jobs supported between 2016/17 and 2017/18.

Jobs supported in the South East falls as expenditure decreases.

The total number of jobs supported by MOD expenditure has decreased by 11,000. This decrease was mostly spread across four regions; South East, South West, Scotland, and the North West. Expenditure in the South East has decreased by 12.7% (£633 million) since 2016/17, largely because of the change to Dstl as discussed earlier, and this was responsible for a decrease of 6,700 jobs supported. Scotland and the North West saw their combined jobs supported decrease by 3,100. These two regions account for just under two-thirds of total MOD expenditure in the shipbuilding sector, which due to a decrease in total national employment in the sector, has contributed to the fall in jobs supported in Scotland and the North West. The decrease in total national employment in shipbuilding was due to the restructuring of a business, which was under a single reporting unit in 2016 but now reports as three separate units, one of which is grouped in a different sector.

Figure 8: Jobs Supported Through MOD Expenditure by Region 2017/18

Bar chart showing jobs supported through MOD expenditure by region in 2017/18, in descending order. The graph shows that the number of jobs supported were dominated by the South West and South East.

Despite the South West showing a decrease in jobs supported from 33,900 to 31,700, it continues to support more jobs than any other region, and MOD expenditure supported 1 in every 60 jobs there which is unchanged from 2016/17. Jobs supported by MOD expenditure in the North East has decreased from 700 in 2016/17 to 600 in 2017/18 and now equates to 1 in every 1,380 in the region.

7. Jobs Supported by MOD Expenditure with UK Industry per 100,000 FTE Employment

Change in total employment in the Aircraft sector affects jobs supported.

Jobs per 100,000 FTE Employment To compare the number of jobs supported by MOD expenditure across regions we have calculated jobs supported per 100,000 people in full-time equivalent (FTE) employment in each region. This adjusts the figures for the population and employment levels of the regions.

The South West, South East, and North West account for threequarters of MOD expenditure in the Aircraft and Spacecraft sector. This sector recently saw a drop in total employment, which contributed to the number of jobs supported in the regions decreasing. The reduction in total employment was influenced by a combination of a lower returned employment in 2017 from a large business operating in this sector and the confirmed closure of a business in 2017.

Figure 9: The Number of Jobs Supported Through MOD Expenditure for Every 100,000 People in FTE Employment by Region 2017/18

Map of the UK split by region showing the number of jobs supported by MOD expenditure per 100000 people in full-time equivalent employment in 2017/18. Lower job numbers are observed in Northern Ireland and down the East coast of England

MOD expenditure supported 450 jobs per 100,000 in FTE employment which is down from 480 jobs per 100,000 in 2016/17. In Figure 8 we saw that MOD expenditure supported a similar number of jobs in the South East and South West of England. However, when adjusted for the overall levels of employment in the region, we see that MOD supported employment per 100,000 jobs is dominated by the South West.

Figure 10: The Number of Jobs Supported Through MOD Expenditure for Every 100,000 People in FTE Employment by Region 2017/18

Bar chart showing the number of jobs supported by MOD expenditure for every 100000 people in full-time equivalent employment by region in 2017/18. It shows that supported employment per 100000 jobs is dominated by the South West.

Jobs supported in the North East continues to drop.

The total number of jobs supported by MOD expenditure in the North East has continued its decrease over the last five years and now stands at 70 per 100,000 in FTE employment. This is largely due to expenditure in the region falling from £279 million in 2013/14 to £105 million in 2017/18, for the reasons mentioned earlier. MOD expenditure in Northern Ireland, the next lowest ranked region, supports 90 jobs per 100,000 in FTE employment. The remaining regions have experienced little variation in ranking since 2013/14.

Figure 11: The Number of Jobs Supported Through MOD Expenditure for Every 100,000 People in FTE Employment, Ranked from Highest (1) to Lowest (12) by Region

Line graph showing supported employment by region per 100000 people in full-time equivalent employment ranked from highest to lowest from 2013/14 to 2017/18. The top six regions with the most supported jobs have remained unchanged from 2016/17.

The East of England saw a 41% increase in total expenditure between 2016/17 and 2017/18 but only a 26% increase in jobs supported per 100,000 in FTE employment in the same period. This shows that an increase in total expenditure doesn’t always translate to the same increase in jobs supported per 100,000. It can depend on the composition of expenditure in the region, as some industries support more jobs for the same turnover than other industries. The East of England rose two places in the expenditure rankings since 2016/17 but only one place in the equivalent jobs rankings.

8. Jobs Supported by MOD Expenditure with UK Industry by Industry Group

Technical and Financial Services continue to dominate jobs supported.

Using SIC codes we can estimate how many jobs are supported in each industry group by dividing MOD expenditure in each group by turnover per FTE employment.

The highest number of jobs supported through MOD expenditure is in the Technical, Financial Services & Other Business Services1 sector. While the number of jobs supported has fallen by 6.1% between 2016/17 and 2017/18, it still supports more than twice the amount of jobs than the next ranked sector, Shipbuilding & Repairing.

Hotels, Catering & Restaurants was ranked 13th when summarised by total expenditure in Figure 6. However, when viewed by jobs supported it climbs to 7th, this is due to a much lower turnover per FTE employment than other industries. Contrary to this, Aircraft and Spacecraft is ranked 3rd in order of expenditure but only reaches 10th place in number of jobs supported. This is influenced by a high turnover per FTE employment due to the specialist nature of work in the sector.

Figure 12: The Number of Jobs Supported Through MOD Expenditure by Industry Group 2017/18

Bar chart showing supported employment by MOD expenditure industry group in 2017/18. Jobs in Technical, Financial Services and Other Business Services and Shipbuilding and Repairing greatly outnumbered the other sectors.

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.

9. Methodology

This short section on methodology sets out the processes and methods used to create the tables and charts in this bulletin. More detailed explanations of data sources and methodologies used in this publication can be found in the supplementary data tables and Background Quality Report. Any specialist terminology or acronyms used below (and throughout the publication) are defined in the Glossary.

Regional Expenditure Figures

Location of Work (LOW) codes associated with HQ contracts were used to allocate expenditure to specific regions and calculate expenditure with UK industry. This expenditure was added to the Miscellaneous contracts that had a UK postcode as the billing address. Expenditure with Other Government Departments (OGDs) and Trading Funds (TFs) was removed from the HQ and Miscellaneous contracts and added back in with improved location and SIC information. This included expenditure with AWE, DIO, DSG/DECA, HRMS, JPA, NETMA, OCCAR and UKHO. Any electronic Procurement Card (ePC) expenditure has been distributed based on the location of MOD Personnel. Once these were combined we had a total figure for MOD Expenditure by region. This information is also presented as expenditure per person which was calculated using ONS mid-year population data. This is presented on choropleth maps to show expenditure in each region of the UK.

Industry Group Expenditure Figures

HQ contracts have SIC code information associated with them, this was used to calculate expenditure by industry group for these contracts. Miscellaneous contracts have no SIC code assigned so the distribution of SIC codes from the HQ contracts was applied here. Expenditure against OGD or TF contracts that did not have a SIC code was distributed following discussion with project teams. Once this expenditure was combined we had a total figure for MOD Expenditure by SIC group. These SIC groups were aggregated into industry groups.

Calculating Jobs Supported by MOD Expenditure

Turnover per full-time equivalent (FTE) employment for the UK was calculated by dividing turnover figures obtained from the ABS, by employment figures obtained from the BRES. We were then able to divide MOD expenditure, for each region and industry group, by the turnover per FTE employment figure. This gave us an estimate of how many jobs are supported by MOD expenditure in each region and each industry group. This information is also presented as the number of jobs supported for every 100,000 people in FTE employment in the area, which was calculated using employment figures from the BRES.

Assumptions Made During Analyses

Various assumptions have had to be made throughout the process when concrete or reliable information was not available. These assumptions are listed in the Background Quality Report.

10. 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.

Atomic Weapons Establishment (AWE) works under contract to the MOD and is responsible for national nuclear security and supporting the Continuous At Sea Deterrence (CASD) programme.

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 2017/18 prices”. This would mean that historic expenditure figures have been adjusted so that they are in 2017/18 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.

Defence Electronics and Components Agency (DECA) is a government organisation dedicated to maintenance, repair, overhaul, upgrade and procurement in defence avionics, electronics and components.

Defence Infrastructure Organisation (DIO) is responsible for the day-to-day estates activity at the MOD including maintenance, construction and sustainability of rural and built MOD estates.

Defence Science and Technology Laboratory (Dstl) was a former Trading Fund of MOD, created in July 2001. It supplies impartial scientific and technical research and advice to MOD and other government departments. In April 2017 it ceased to be a Trading Fund and became an OnVote Defence Agency of MOD.

Defence Support Group (DSG) was a former Trading Fund of the MOD created following the merger of Army Base Repair Organisation (ABRO) and Defence Aviation Repair Agency (DARA) on 1 April 2008. On 1 April 2015 the land repair and maintenance business was sold to Babcock. The remaining part of the business, the Air division and Electronics and Components division, stayed under MOD ownership as DECA.

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.

electronic Procurement Card (ePC) is the first choice purchasing tool for Goods and Services, which are not covered by contractual arrangements and allows individual units to process mainly small value purchases. The cards are issued and monitored by the responsible Finance team.

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

Human Resources Management System (HRMS) is a personnel administration system for civilians working at the MOD.

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.

Joint Personnel Administration (JPA) is a personnel administration system used by the British Armed Forces.

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.

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.

NATO Eurofighter and Tornado Management Agency (NETMA) is the prime contractor for the Eurofighter Weapon System. The arrangements for the management of the Eurofighter programme were set out in the NATO Charter dated 18 December 1995, in which the international management agencies of the Tornado and Eurofighter programmes were integrated into a single agency, NETMA. This NATO agency is essentially a multi-nation HQ project office for these two collaborative projects, involving the UK, Germany, Italy and Spain. In the UK, Eurofighter is now called ‘Typhoon’.

Nomenclature of Territorial Units for Statistics (NUTS) Level 1 Regions are 12 UK regions used in the production of statistics.

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.

Organisation Conjointe de Coopération en Matière d’Armement – the Organisation for Joint Armaments Co-operation (OCCAR) was originally set up in November 1996 by France, Italy, Germany and the UK with the aim of improving the efficiency and lowering the cost of managing co-operative defence equipment programmes involving European nations (e.g. A400M). Belgium and Spain are now also members.

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.

Trading Funds (TFs) were introduced by the Government under the Trading Funds Act 1973 as a “means of financing trading operations of a government department which, hitherto, have been carried out on Vote”. They are self-accounting units that have greater freedom, than other government departments, in managing their own financial and management activities. They are free to negotiate their own terms and conditions with their staff. For this reason, their grading structures do not always match that of the rest of the Ministry. From 2017/18 there is now only one MOD Trading Fund - UK Hydrographic Office.

UK Hydrographic Office (UKHO) was formed as a Trading Fund of the MOD in 1996 and is responsible for the provision of global hydrographic products and services to UK Defence and commercial mariners. In addition, UKHO discharges the UK’s obligation to provide hydrographic products and services needed for safe navigation in UK waters.

11. Further Information

11.1 Symbols

Figures marked with a superscript “r” are revised from the last edition.

11.2 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. Total expenditure figures have been rounded to three significant figures, per person expenditure figures have been rounded to the nearest £10. The total numbers of jobs supported by MOD expenditure has been rounded to the nearest 1,000, the number of jobs supported by MOD expenditure by region has been rounded to the nearest 100 and the number of jobs supported per 100,000 in FTE employment has been rounded to the nearest 10.

11.3 Revisions

Corrections to the published statistics will be made if errors are found, or if figures change because 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. Total jobs for 2016/17 have been revised due to updated employment estimates in ABS and BRES figures for 2016 from the ONS.

11.4 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:

11.5 Defence Statistics (Defence Expenditure Analysis)

Telephone: 030 679 84442

Email: DefStrat-Econ-ESES-PQFOI@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 under the Freedom of Information Act 2000 to the Ministry of Defence via the following link:

https://www.gov.uk/make-a-freedom-of-information-request/the-freedom-of-information-act

11.6 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.