Home » Australia’s $4.6bn Aukus funding to help create more than 1,000 jobs in UK, Rolls-Royce says

Australia’s $4.6bn Aukus funding to help create more than 1,000 jobs in UK, Rolls-Royce says

Australia’s Aukus funding will help create more than 1,000 new jobs in Derby in the United Kingdom, according to the beneficiary, Rolls-Royce.

The project – which is jointly funded by the UK’s Ministry of Defence – is also expected to see the construction of new office space in addition to manufacturing facilities.

The Australian government revealed late last week that it would send A$4.6bn (£2.4bn) to the UK over the next 10 years to ensure the Rolls-Royce nuclear reactor production line in Derby was able to supply reactors for use in Adelaide-built submarines.

The government has not provided detailed information about what the funding will cover, except to say it will “enable the Rolls-Royce factory in Derby to operate at an increased rate of production”.

Rolls-Royce, however, has been more forthcoming. It has welcomed the Australian government funding and said work was already under way “to double the size of the Rolls-Royce Submarines site in Raynesway, Derby”.

“Now jointly funded by UK MOD and the Australian Department of Defence, the expansion work announced last summer will create over 1,000 new jobs in Derby across a range of disciplines, including manufacturing and engineering,” the company said in a statement published on its website.

“It will also see new manufacturing and office facilities being built on recently acquired land surrounding the existing Raynesway site.”

The year-by-year breakdown of the Australian funding over the next 10 years has not yet been disclosed.

But the Australian government sees the investment as crucial to ensuring nuclear reactors are able to be built on time for both Australian and UK needs.

It insists that despite the plans to spend billions of dollars on boosting the industrial base in both the UK and the US, a much bigger sum will be spent on infrastructure and skills development in Australia.

On Friday the Coalition’s defence spokesperson, Andrew Hastie, said he was pleased to see the government take “these next steps in concert with the UK and the US”.

But Hastie called on the government to “be honest with the Australian people and provide further details around costs, workforce and preparedness”.

“In October last year, Defence revealed there was no provision in the Defence budget for the $5bn payment to the UK,” Hastie said.

“Labor must be upfront and clarify if the funding announced today has come from further reprioritisation within Defence – and therefore at the cost of existing capabilities.”

That was based on a Senate estimates exchange in October when an official said that the government had a provision of US$3bn to boost the US industrial base but “on the UK side we’re still working through what that provision might be”.

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A spokesperson for the deputy prime minister, Richard Marles, said it was increasingly clear that the Liberal party did not understand the budget process.

“As was made clear at Senate Estimates by officials when asked about this, they confirmed that funding had been set aside in the provisions for the Nuclear-Powered Submarine program for UK and US uplift,” the spokesperson said.

The Australian investment in the UK industrial base falls within the previously announced overall funding envelope for the Aukus submarine project, which was $50bn to $58bn in the first 10 years of the plan.

Guardian Australia understands funding was set aside in the provision for UK and US industrial costs, but it sat as “unapproved” because the government had to sign off on detailed individual proposals after international negotiations.

In parliamentary question time on Monday, Marles said Aukus would be “one of the biggest undertakings in our country’s history”.

He said thousands of people would be employed at the Osborne shipyard in South Australia where the new class of submarine SSN-Aukus would be built.

He said the latest announcements – including the UK funding and establishing a joint venture with the British defence contractor BAE Systems – demonstrated that Aukus was “happening and progressing well”.

The Greens’ defence spokesperson, David Shoebridge, said it was “an extraordinarily bad deal” for Australian taxpayers.