Defence cuts ‘could benefit’ engineering industries

The defence industry is bracing itself for tens of thousands of private-sector job losses following the government’s budget cuts, but some are hoping other industries will gain from the influx of engineers to the market.

Speaking exclusively to The Engineer, Ian Godden, chairman of defence industry body ADS, warned that private-sector job losses could match the 42,000 government redundancies expected as a result of the Strategic Defence and Security Review (SDSR).

‘How fast that takes place, how much mitigation could be done, how much skill transfer could be achieved we don’t know,’ he said.

“The beauty of being an engineer is the transferable skills”

Craig Slater, Roevin

‘But I’m guessing with reasonable back-up that it’s going to be of the same order – approximately that number of private-sector jobs that go as well.’

Martin Wright, chief executive of the North West Aerospace Alliance, agreed that a squeeze on capital defence budgets meant the prospect of ‘significant losses’ and not just for those involved in designing and building technology.

‘The reduction in mainline equipment will affect support and systems management, for example,’ he told The Engineer, highlighting the scrapping of the Nimrod aircraft programme in particular as a decision that would impact through-life support jobs.

‘The extent of the job losses will depend on any radical reshaping of future UK defence, particularly any shift of strategy with respect to equipment. The devil will be in the detail.’

The industry is particularly fearful of the impact on those working for small and medium enterprises (SMEs) caused by cuts in back-up and maintenance contracts.

‘The SME community has contracts worth six per cent of the total defence budget but the [employment] numbers are much higher,’ said Godden.

‘There isn’t a deliberate policy of making sure those contracts aren’t cut. You may find a lot of those disappear quite quickly to pay for the larger contracts.’

Smaller contracts could also be affected in less obvious ways. In the same way the Ministry of Defence has handed over the bill for the Farnborough air show to the industry in recent years, commitments to tattoos, airshows, museums and other short-term programmes could disappear, said Godden.

But for all the negativity of defence cuts, an influx of engineers into the employment market, combined with investment in infrastructure, raises the question of whether other industries might stand to benefit.

The government certainly seems to think the job losses can be absorbed and has set up a body to help redeploy workers made redundant as a result of SDSR to advanced manufacturing sectors such as civil aerospace, automotive, energy and marine.

Since the start of the recovery, the utilities and energy sectors have seen the biggest growth in job vacancies, according to engineering recruitment firm Roevin, and this trend is expected to continue as government infrastructure investment filters through.

‘There’s certainly enough in that space to absorb some of the losses,’ said Roevin’s director Craig Slater. ‘In areas such gas turbines, nuclear and manufacturing automation there are quite a lot of transferable skills. And the beauty of being an engineer is the transferable skills.

‘The government is investing heavily in infrastructure. There’s a lot of doom and gloom surrounding the [spending review] announcement but for engineering as a whole I think it’s good news.’