In December 2024 the UK Government published its statement of intent for boosting the UK defence industry (available here) (the Defence Industrial Strategy). The outcomes of the Ukraine Summit in Paris during February 2025 once again bring this strategy into sharp focus.
The key takeaways from the Defence Industrial Strategy are:
- Strategic Aim and Economic Growth: aligning national security with economic growth, enhancing the defence sector's resilience and fostering partnerships between government and industry to drive innovation and productivity.
- Key Priorities: (1) prioritising UK businesses, (2) creating partnerships, (3) ensuring certainty and stability, (4) seizing future opportunities, (5) spreading prosperity across regions, and (6) enhancing deterrence. These priorities aim to reform procurement, leverage inward investment, promote UK leadership in related sectors, and boost sovereign defence industrial capacity.
- Challenges and Problems: acknowledging several problems in the defence sector, including strategic incoherence, inefficient spending, falling behind on exports, skills shortages, slow pace of innovation, and lack of long-term partnerships and institutions.
- Partnerships and Institutions: emphasising the importance of building long-term, trusting partnerships between business and Government. It proposes replacing the Defence Suppliers Forum with a new Defence Industrial Joint Council to involve a wider range of stakeholders, including the tech sector, SMEs, universities, and trade unions, to improve decision-making and productivity.
- Implementation and Consultation: developing at pace, informed by the Strategic Defence Review, and published in late Spring 2025 with a remit extending to 2035. The Ministry of Defence invites input from a wide range of stakeholders to shape the policies under each of the six priorities, with responses due by 28th February 2025. Extensive consultation with the sector will follow to design a strategy that can deliver the outlined objectives.
Current events in conjunction with the Defence Industrial Strategy make it highly likely that defence investment will grow significantly in the short to medium term in the UK. We expect this to be led by private investment as well as increased Government investment.
At CMS we have teams of experts in the defence and space sectors with deep experience in corporate as well as technology and intellectual property who can assist investors and defence companies across Europe.
If you would like to get in touch, please reach out to Elliot Cowan, Michael Cattell or Adam Legge.
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