Engineering giant Rolls-Royce has agreed a deal with the Ministry of Defence that will create 1,000 jobs and safeguard 4,000 other roles.

The £9bn contract will see the firm make nuclear submarine reactors for the Royal Navy under an arrangement that, according to the government, will “generate more efficiency and allow for effective risk and opportunity management, providing incentives to produce more for no increase in cost.”

Under the contract, Rolls-Royce Submarines will provide manufacturing and providing support services for nuclear reactors for the UK’s fleet.

The new deal streamlines previous contracts and incentivises more efficient delivery, which will result in savings of £400m over the eight-year term of the contract, according to the MoD.

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The company opened a nuclear skills academy in Derby in 2022, designed to provide 200 apprenticeships each year for at least a decade.

Rolls-Royce Submarines is doubling the size of its Raynesway site in Derby and has started moving into specially built warehouses in Pride Park.

Defence secretary John Healey said: “This investment in Britain’s defence will deliver a long-term boost to British business, jobs and national security. National security is a foundation of our government’s plan for change, and this is a clear demonstration of our commitment to the UK’s nuclear deterrent, which is our ultimate insurance policy in a more dangerous world.”

Chris Gardner, the chief executive of the Submarine Delivery Agency, added that the deal was “a clear signal of our commitment to deliver greater effectiveness, efficiency and agility to meet the needs of the defence nuclear enterprise and support the Royal Navy’s submarines now and in the future.”

At least one nuclear warhead-armed Royal Navy submarine is constantly on patrol, constituting the main part of the UK’s nuclear deterrent.

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Healey will announce the deal during a visit to Rolls-Royce’s nuclear reactor production facility in Derby.

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