- Leonardo has been left in the lurch as UK defence spending delay persists until March at the earliest
- The company, which boasts Britain’s only rotary wing manufacturing site in Yeovil, is the only tender left with its AW149 medium lift helicopter
- As the delay extends well beyond reason, industry concerns are growing as the UK tries to balance its programme ambitions in a budget-friendly Defence Investment Plan
Having launched the £1bn ($1.3bn) New Medium Helicopter (NMH) competition two years ago, and with Leonardo left as the only tender for more than a year now, the UK Ministry of Defence continues to kick the can down the round.
A cost breakdown for Britain’s defence programmes was scheduled to be released in the Defence Investment Plan (DIP) last year but this has yet to materialise. The lengthy delay has led to deep concern across the defence community as companies wait on government to make sense of their priorities after a year-and-a-half in office.
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The Armed Forces are also suffering as the government retired the Puma in March 2025, leaving a medium-lift helicopter capability gap.
NMH in 2026
In a Defence Committee session on 12 January the Chief of the Defence Staff (CDS), Air Chief Marshal Richard Knighton, stated there will be inevitable “trade-offs” as the government face the economic reality of funding their ambitious plans, welcomed by all in the Strategic Defence Review last year.
This is strange given the profound concern expressed by Members of Parliament (MP) on the same day.
The MP for Yeovil, where the UK’s only rotary wing manufacturing site is located, warned the Defence Readiness Minister Luke Pollard that “we would… lose our country’s ability to produce our own helicopters end to end… at a time of serious global tensions and insecurity”.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataDays later, in a sharp riposte to his Conservative predecessor in a parliamentary written statement, Pollard said that the Labour government is currently tackling 47 out of 89 major programmes that were “overbudget and delayed” under the previous government.
However, NMH should not be considered one of these since the Labour government entered office in July 2024, only five months after the contract was launched, meaning the enduring delay stems from the current government’s inertia.
Amid the fiscal trouble, the importance of delivering NMH was questioned in the Defence Committee session where the CDS admitted that he, as head of the Armed Forces, had not discussed NMH at all in 2026 while stipulating that it is “not at the bottom of the list [of priorities]”.
Yeovil survival depends on NMH
Meanwhile, Leonardo’s bid to produce its AW149 medium lift helicopter remains in limbo, threatening the closure of the UK’s only rotary wing manufacturing site in Yeovil, Somerset, which is more than a century old.
Until the NMH contract is confirmed, Leonardo are left with limited options. One promiment responsibility at the facility is the development and testing of the Royal Navy’s Proteus autonomous helicopter, which completed its maiden flight this week.
Other responsibilities include its logistics support services for Merlin and Wildcat helicopters, which are ageing rapidly after nearly 30 and 10 years of service respectively. To add value to this enterprise, as they wait for the government to green-light AW149 production, the supplier invested £30m ($40.4m) in a logistics hub in September 2024 to deliver replacement parts more efficiently and responsively to international customers.
It is said that if this contract is not awarded by March, the government risks losing over 3,000 manufacturing jobs in Yeovil, support for over 12,000 jobs in the regional supply chain and £320m that Leonardo contributes to local gross domestic product.
Recently, the UK’s multi sector trade union Unite reflected on the DIP’s delay, with General Secretary Sharon Graham described the delay as an “act of self-harm”.
Previously, Graham also noted that “Leonardo workers in Yeovil are looking over their shoulders wondering where the next order will come from while the government dithers and delays. This uncertainty must end by confirming the order for medium-lift helicopters.”
Looking elsewhere?
An MoD spokesperson told Army Technology this week that NHM is ongoing and no final procurement decisions have been made, stipulating that the “outcome will be confirmed in due course”.
But rumours are rife. Earlier this month, The Telegraph reported that the British Army is preparing to purchase Lockheed Martin Black Hawk helicopters instead. Such a move would come as a surprise as Lockheed Martin, once a tender for the contract, dropped out of the competition in August 2024.
At the time, a Lockheed Martin spokesperson confirmed that while they considered Black Hawk “the best solution” for the UK Armed Forces, they “could not meet [the UK’s] minimum requirements in today’s market conditions”.
The UK requires a manufacturing presence in the country and, more recently, the Defence Industrial Strategy reinforced this with another stipulation that any foreign investment in overseas suppliers will also “ensure that the British economy is strengthened in return through new jobs and novel technologies”.
