Ministers have been accused of ignoring their own rules when awarding bumper defence deals.
The Prospect union says the Government is failing to properly apply the “social value test”, which assesses benefits to communities when handing out lucrative contracts.
The union believes the Tories have been too focused on the costs of projects and not taken enough account of the potential impact on workers and wider society.
Prospect pointed to the 2020 Ministry of Defence announcement that the UK would equip its new Apache helicopters with missiles made by US firm Lockheed Martin - despite a bid from Stevenage-based MBDA, which employs 4,000 staff.
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Prospect has produced a 12-page report, ‘Social value and the prosperity agenda in defence’, seen exclusively by the Mirror, calling for the social value test to be bolstered to give more weight to non-price considerations and measuring tenders against “key performance indicators” such as jobs, skills and local investment.
Senior deputy general secretary Sue Ferns said: “A more rounded approach would enable the Government to use defence spending strategically to help drive its levelling-up agenda while supporting skills, and reinforcing the UK’s sovereign defence capabilities from design to build.”
The union fears a £1.5billion deal for three naval supply ships could go to a foreign-led bid.
The Government has “made clear that a substantial part of the build” for the Fleet Solid Support vessels for the Royal Fleet Auxiliary will “be conducted in the UK” and “there is a requirement to integrate all ships in a UK shipyard”.
But that has sparked fears a UK-led consortium could miss out, with much of the work taking place overseas.
Ms Ferns added: “The MoD is responsible for around £11bn of annual contract expenditure which, if directed properly, can have the dual effect of supporting British business and driving the levelling-up agenda.
“To date this potential benefit has not been delivered as well as it ought to be and the Government is failing in its mission to increase the contribution to UK prosperity from defence.
"The main reason is that headline price is still the primary driver of procurement decisions rather than a holistic assessment that considers the impact on local communities, the economy and climate change alongside headline price.”
Shadow Defence Minister Chris Evans said: “The MoD’s procurement system is failing British businesses.
“From wasting billions of pounds in cancelled contracts to the social value test not being applied properly, ministers are repeatedly missing opportunities to provide and support local jobs across the country.
“Our defence and aerospace industries are national assets and Labour is committed to a ‘British-built by default’ approach to defence procurement which would support the growth of the British defence sector and build resilience in our supply chains.”
A Ministry of Defence spokeswoman said: “Social value tests are undertaken as required in our procurement and any suggestion otherwise is completely incorrect.
“These tests are one of many important factors in our procurement as we seek to ensure value for taxpayers’ money, benefit to the UK and securing the best equipment for our Armed Forces.“Defence proudly supports hundreds of thousands of jobs across every corner of the country and in the last year spent over £20 billion with UK industry.”
