2024 has been another year of complex and evolving global security challenges, and in this context, it is unsurprising that the defence sector has been identified by the Government as a key priority area for economic growth. In support of this objective, earlier this month the Secretary of State for Defence unveiled the UK Government’s Defence Industrial Strategy Statement of Intent (SOI),  which sets out the process the Ministry of Defence will follow in developing a new Defence Industrial Strategy (DIS) to be published in late Spring next year. 

The last Defence Industrial Strategy was published by the previous government back in 2021 , and although the SOI points out that there have been significant geopolitical developments since then, and that in any case it “was never properly implemented”, it also promises that the new Defence Industrial Strategy will “build on what DSIS21 got right” – including scrapping “global competition by default”, simplifying contracts; making longer-term commitments; and providing clear signalling to encourage firms to take long-term investment decisions.  

At the heart of the new DIS will be the strategic aim to “make sure the imperatives of national security and a high-growth economy are aligned”, and the SOI identifies six priorities around which it will be developed:

• Prioritise UK businesses – with a focus on how to promote UK based businesses for defence investment without losing the benefits of competition. 
• Create Partnerships – investing in partnerships both between the Government and Industry, and between the UK and its Allies. 
• Certainty and Stability – enhancing the incentives for long term investment in the UK, not just for primes but also other organisations in the defence industry.
• Seize the Future – increasing pace in the development and acquisition of new, clean and emerging technologies.
• Spread Prosperity – using defence as a catalyst for job creation, regional growth, and to boost export potential.
• Deterrence – enhancing the credibility of the UK’s deterrence against aggression and supporting the UK in fulfilling its NATO commitments.

The SOI also announces a key change in the approach to the relationship between suppliers and government through the replacement of the existing Defence Suppliers Forum (DSF) with a new Defence Industrial Joint Council (DIJC), which will widen participation to include not just the largest defence companies but also participants from the tech sector, education, SMEs, and trade unions.

Another message that comes through strongly in the SOI is the emphasis on procurement reform. This is a long running theme for the defence sector, and it is clear that there will be a continuing focus on this area through the new DIS, including measures to avoid inefficient spending through “mismanagement and delays”, and policies to move away from “over-exquisite design, a narrowed industrial base and a lack of cross-government focus”. We have already seen these priorities reflected in procurement strategies and contracting approaches and are likely to see this in the industry more and more going forward.

So what next? The SOI calls for stakeholder input in relation to the six priority areas identified and envisages extensive consultation with the sector to support development of the DIS “at pace”. We will watch developments with interest – alongside the Strategic Defence Review, also expected in the first half of next year, 2025 is shaping up to be an eventful year for the defence industry.

If you would like to discuss any aspect of this article or any other legal or commercial issues with our team of defence experts, please get in touch. 

This article was written by Lucy Owens and Will Flaim