The UK Ministry of Defence (MOD) has awarded a contract worth approximately £250m to progress the design and development of Tempest, the UK's Future Combat Air System (FCAS). The contract, signed by BAE Systems, officially marks the start of the programme's concept and assessment phase.

The programme is being delivered by Team Tempest – combining the expertise of the UK MOD, BAE Systems, Leonardo UK, MBDA UK and Rolls-Royce. Working with international partners, the team is leading progress towards a UK-led internationally collaborative FCAS which will ensure the Royal Air Force and its allies retain independent military capability.

The concept and assessment phase contract will see the partners develop a range of digital concepts, embedding new tools and techniques to design, evaluate and shape the final design and capability requirements of Tempest.

Announcing the contract during a visit to BAE Systems' Warton site in Lancashire, Ben Wallace, UK Secretary of State for Defence, said: "Today's news is a momentous step towards designing and building a new combat air system which will boost our already world-leading industry and ultimately keep us safe for the rest of the century. The contract I've announced today spearheads a £2bn investment over four years and will see thousands of jobs sustained right across the UK.

"We will now be getting to work with our partners to get the concept right and get this incredibly exciting and ambitious project off the ground. Make no mistake: we are remaining at the top table when it comes to combat air."

Phil Townley, Director Future Programmes, Rolls-Royce Defence said, "We continue to deliver an ambitious future combat air programme for the UK and the further funding announced today marks a critical step forward in that. Working together with our Team Tempest partners we will continue to develop the cutting edge technology to bring Tempest to life.

Across Rolls-Royce we are proud to be at the heart of this transformative endeavour. Tempest represents an exciting period of history across the Defence industry, particularly for our people and the next generation of talent who will be at the forefront of this programme for decades to come."

Tempest will pioneer cutting-edge technologies, including those assisted by Artificial Intelligence, machine learning and autonomous systems to meet the capability requirements of future conflicts and be operational in the mid-2030s.

The design and production of Tempest demands a radically different approach and the Team Tempest partners are working with companies in their supply chain to drive digital transformation, embedding a digital enterprise through the ecosystem; embracing an agile approach that will deliver a combination of advanced technologies, efficiency, speed of production and lower costs.

Recent research conducted by PwC underlines how the Tempest programme is expected to deliver significant and wide ranging benefits to all regions of the UK, stimulating vital investment, productivity, skills and innovation. The programme will make an estimated £26.2bn contribution to the UK economy, create high productivity employment - 78% higher than the UK national average – and will support an average of 21,000 jobs a year.

The programme is able to stimulate R&D in regions most in need and generate wider economic benefits for these areas, with 70% of the programme's value to be generated in the North West, South West and East of England.