The Ministry of Defence (MOD) has awarded a contract worth approximately GBP250m to progress the design and development of Tempest, the UK's Future Combat Air System (FCAS). The contract, signed by BAE Systems, officially marks the start of the programme's concept and assessment phase.

Continued funding of Tempest underlines the UK Government's confidence in the progress and maturity of the programme, which is set to deliver the military, industrial and economic requirements of the national combat air strategy.

The programme is being delivered by Team Tempest - combining the expertise of the UK MOD, BAE Systems, Leonardo UK, MBDA UK and Rolls-Royce. Working with international partners, the team is leading progress towards a UK-led internationally collaborative Future Combat Air System which will ensure the Royal Air Force and its allies retain world-leading, independent military capability.

The concept and assessment phase contract will see the partners develop a range of digital concepts, embedding new tools and techniques to design, evaluate and shape the final design and capability requirements of Tempest.

Announcing the contract during a visit to BAE Systems' Warton site in Lancashire, Ben Wallace, UK Secretary of State for Defence, said: 'Today's news is a momentous step towards designing and building a new combat air system which will boost our already world-leading industry and ultimately keep us safe for the rest of the century. The contract I've announced today spearheads a GBP2bn investment over four years and will see thousands of jobs sustained right across the UK.

'We will now be getting to work with our partners to get the concept right and get this incredibly exciting and ambitious project off the ground. Make no mistake: we are remaining at the top table when it comes to combat air.'

Phil Townley, Director Future Programmes, Rolls-Royce Defence said:

'We continue to deliver an ambitious future combat air programme for the UK and the further funding announced today marks a critical step forward in that. Working together with our Team Tempest partners we will continue to develop the cutting edge technology to bring Tempest to life.

Across Rolls-Royce we are proud to be at the heart of this transformative endeavour. Tempest represents an exciting period of history across the Defence industry, particularly for our people and the next generation of talent who will be at the forefront of this programme for decades to come.'

Digital development

Tempest will pioneer cutting-edge technologies, including those assisted by Artificial Intelligence, machine learning and autonomous systems to meet the capability requirements of future conflicts and be operational in the mid-2030s.

The design and production of Tempest demands a radically different approach and the Team Tempest partners are working with companies in their supply chain to drive digital transformation, embedding a digital enterprise through the ecosystem; embracing an agile approach that will deliver a combination of advanced technologies, efficiency, speed of production and lower costs.

Economic Contribution

Recent research conducted by PwC underlines how the Tempest programme is expected to deliver significant and wide ranging benefits to all regions of the UK, stimulating vital investment, productivity, skills and innovation. The programme will make an estimated GBP26.2bn contribution to the UK economy, create high productivity employment - 78% higher than the UK national average - and will support an average of 21,000 jobs a year.

The programme is able to stimulate R&D in regions most in need and generate wider economic benefits for these areas, with 70% of the programme's value to be generated in the North West, South West and East of England. This means the Tempest programme is well placed to support the UK Government's levelling up priorities and contribute to the UK's economic recovery and prosperity in the decades ahead.

Notes to Editors:

BAE Systems, on behalf of Team Tempest partners, commissioned PwC to carry out an independent analysis of the economic impact of the Tempest programme. The full report is available here: https://baesys.resourcespace.com/?r=29557&k=c7f6341bca

The report was prepared for BAE Systems (Operations) Limited and solely for the purpose and on the terms agreed with BAE Systems (Operations) Limited. PricewaterhouseCoopers LLP accepts no liability (including for negligence) to anyone else in connection with the report.

The research by PwC looks at the period of programme development, production, entry into service and early support up to 2050, but does not include the full potential of export opportunities, R&D investment or the value of the programme after this.

Figures in text presented in NPV (net present value) terms in 2019 price basis. Gross Value Added (GVA): A measure of the value of goods and services produced in an area, industry or sector of an economy. Net present value (NPV): Used to compare estimates of costs and benefits occurring at different points in time, taking into account society's time preference for incurring costs and benefits. All figures exclude benefits beyond 2050, which means most of the value generated by exports is not captured within this 30-year period.

Effective international partnering will play a fundamental role in defining and meeting the goals set out in the UK's Combat Air Strategy and the delivery of an international future combat air programme. Progress continues in collaboration between the UK, Italy and Sweden and their respective leading industry players, underpinned by trilateral memorandum of understanding signed in 2020.

For more information on the Tempest programme go to www.baesystems.com/tempest

Link to imagery: https://baesys.resourcespace.com/?c=4993&k=c8c4e068cd

About Rolls-Royce Holdings plc

Rolls-Royce pioneers the power that matters to connect, power and protect society. We have pledged to achieve net zero greenhouse gas emissions in our operations by 2030. We joined the UN Race to Zero campaign in 2020, and have committed to ensuring our new products will be compatible with net zero operation by 2030, and all products will be compatible with net zero by 2050.

Rolls-Royce has customers in more than 150 countries, comprising more than 400 airlines and leasing customers, 160 armed forces and navies, and more than 5,000 power and nuclear customers.

Annual underlying revenue was GBP11.76 billion in 2020 and we invested GBP1.25 billion on research and development. We also support a global network of 28 University Technology Centres, which position Rolls-Royce engineers at the forefront of scientific research.

Rolls-Royce Holdings plc is a publicly traded company (LSE:RR., ADR: RYCEY, LEI: 213800EC7997ZBLZJH69).

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