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The UK government is set to unveil plans for a new military industry council with business, in a bid to deepen Whitehall’s engagement with technology companies and smaller start-ups as well as the sector’s giants.
On Monday, John Healey, Britain’s defense secretary, will set out proposals for SMEs, investors, academics and trade unions to join the body, along with majors such as BAE Systems and Babcock International.
The council will include a wider range of voices than the existing defense supplier forum, which focuses more on the sector’s biggest companies.
Healey told the Financial Times that he wanted to “hear from others outside of those established defense companies”.
He added: “We want more involvement from technology companies whose innovations can benefit defence. We want to work with entrepreneurs and start-ups, with exporters who are looking for more government support behind their efforts, and with investors who want to play a bigger role.”
Its cast list is likely to be finalized alongside a new defense industrial strategy, promised in Labour’s manifesto, which officials say will be published in the first half of 2025.
The result of the government’s strategic defense review, which will examine which capabilities the UK should invest in, is also expected early next year.
Speaking at a London Defense Conference event on Monday, Healey will argue that “national security is the foundation for growth” as he releases a statement of intent on the strategy.
It will specifically favor UK-based companies for military-related government investment to boost domestic growth and jobs, aligning the government’s economic and security agendas.
The plans are the latest attempt to review the way the Ministry of Defense procures equipment from industry. Successive governments have tried to fix a system that has come under fire for wasting billions of pounds of taxpayers’ money on equipment that is late and over budget.
UK last published a defense industry strategy 2021 before the Russian invasion of Ukraine in February 2022. The war highlighted how modern warfare is moving away from using traditional hardware such as tanks, weapons and ammunition to more software-defined technologies to allow troops to outsmart the enemy.
Investors, innovators, industry and unions will be invited to get involved in the framework, which aims to boost defense jobs in “every nation and region of the UK”, Healey said.
The industry is already seen as an important source of high-skilled and well-paid jobs in less prosperous parts of the country. The defense sector supports one in every 60 jobs in the UK, more than two-thirds of which are outside London and the US, according to government statistics.
It follows concerns in Whitehall that over the past decade, MoD procurement has too often been conducted on a contract-by-contract basis, with an agnostic attitude to the end economic user of the work and the destination of the work.
However, ministers are often faced with a choice between cheaper overseas procurement options that offer better immediate value for money and more expensive UK alternatives that can deliver wider domestic economic benefits in the long term.
Healey’s intervention is likely to prompt a renewed focus on when the government will meet its manifesto commitment to increase defense spending to 2.5 per cent of GDP.
Chancellor Rachel Reeves said in the budget that the move would be announced at a future fiscal event, without giving a timeframe.
The Defense Industrial Strategy will also aim to boost deterrence by improving the resilience of the UK’s industrial base, with a particular focus on semiconductors and steel, and its ability to innovate rapidly during wartime.
Defense departments are having to adapt their procurement and are increasingly turning to technology-driven companies that promise faster development cycles than traditional contractors.
Palantir, a US-listed government contractor founded by tech veterans including Peter Thiel, has already become a key player in the UK and has secured significant contracts with the Ministry of Defence.
European Helsinkiwhich specializes in AI-based defense software, will announce plans on Monday to mass-produce thousands of AI-enabled drones as part of a £350m investment in the UK over the next five years.
Healey will say the defense industry must be “better and more integrated” and vow to “mobilize the private sector to help tackle global threats, drive more public investment into British companies and create jobs and growth” across the UK.
