General Dynamics inks £500m Scout contract

The Government has signed off the £500m Scout reconnaissance vehicle deal agreed with General Dynamics before the election. The Ascod contract, for the design and manufacture of seven prototype armoured vehicles, was one of more than £10bn-worth of military deals pencilled in by the Labour government and now facing review.

Although the planned Strategic Defence Review could affect the size of the full Ascod programme, the demonstrator phase will definitely go ahead. Once the prototypes are delivered in 2013, the Army will decide whether to go into full production. The programme could run to 1,200 vehicles worth up to £4bn.

GD beat off competition from BAE Systems, which blames the loss of the Scout deal for the closure of its Leicestershire tank factory at the end of 2011, with the loss of 260 jobs.