Government unveils Defence Industrial Strategy to boost national security and local economies

The government has unveiled a sweeping new Defence Industrial Strategy (DIS), promising to make defence a cornerstone of both national security and economic growth.

Central to the plan is the creation of Defence Growth Deals, backed by £250m over the next five years, designed to unlock regional strengths, foster innovation, and create thousands of highly skilled jobs across the UK.

The Defence Industrial Strategy announcement follows the recent news that Norway has ordered British Type 26 frigates in a £10bn agreement, marking the UK’s largest-ever warship export deal by value.

Defence Industrial Strategy: Putting defence at the heart of economic growth

Defence Secretary John Healey will officially launch the strategy later at the veteran-founded high-tech firm Rowden in Bristol, where he will also open the company’s new 20,000 sq. ft. facility, underscoring how defence can power both industry and community prosperity.

The Defence Secretary said the DIS aims to make Britain “the best place in the world to start and grow a defence firm”, equipping the Armed Forces while spreading economic benefits to working families from Cornwall to the Highlands. Opportunities will range from apprenticeships to specialist engineering posts, ensuring that the so-called “defence dividend” reaches every corner of the UK.

Defence Growth Deals: A new model for regional partnerships

At the heart of the strategy lies a new model for collaboration. The Defence Growth Deals will unite local and national government, business, and academia, mirroring the successful “Team Barrow” partnership that supported submarine building in Barrow-in-Furness.

These deals will target areas of untapped potential, combining government investment with private sector support. Each deal will also provide tailored assistance – from skills development to housing and planning – to ensure long-term, sustainable growth.

Initial analysis by ADS, the aerospace, defence, security and space trade body, suggests the UK could see demand for up to 50,000 additional defence jobs by 2034/35 as investment ramps up. Growth Deals are expected to play a crucial role in securing this skilled employment.

First five Defence Growth Deals

The government confirmed the first wave of deals will cover all four nations of the UK, with projects reflecting regional industrial strengths:

• Plymouth – Anchored by Western Europe’s largest naval base, Plymouth will benefit from £4bn of investment over the next decade and its designation as the UK’s national centre for marine autonomy, advancing maritime autonomous systems.

• South Yorkshire – A hub for advanced manufacturing, the region specialises in high-grade steel and materials vital for future maritime, land, and air capabilities.

• Wales – With leading companies like Tekever and facilities such as the Snowdonia Aerospace Centre, Wales is developing into a centre of excellence for UAV (unmanned aerial vehicle) technology.

• Scotland – Boasting a thriving space sector, maritime innovation around the Clyde and Rosyth, and academic-led technology clusters, Scotland will see investment in cutting-edge defence research and development.

• Northern Ireland – Recognised as a cyber security hub with institutions such as Queen’s University Belfast, Northern Ireland is also home to defence giants Thales and Harland & Wolff, supporting both UK defence needs and Ukraine.

A strategy backed by record spending

The £250m investment in Defence Growth Deals is part of the government’s historic increase in defence spending to 2.6% of GDP by 2027, with a pledge to reach 3% in the next Parliament. This funding will not only bolster defence capabilities but also provide stability for industry and communities.

Defence Secretary John Healey emphasised the dual ambition of the plan: “The Defence Industrial Strategy will make defence an engine for growth across the UK, backing British jobs, British industry and British innovators. Defence Growth Deals offer a new partnership with UK Defence to build on industrial and innovation strengths that regions already hold. Together we aim to drive an increase in defence skills, SMEs and jobs across all four nations.”

He added that innovation is now as vital to national security as industrial power: “The conflict in Ukraine provides a stark reminder of the need for fast replenishment and resupply by industry, and a rapid, continual cycle of innovation between industry and the front line.”

Securing Britain’s future

The Defence Industrial Strategy is billed as both a long-term investment in national security and a blueprint for regional prosperity. By reinforcing the UK’s industrial base and creating new pathways into high-growth sectors, ministers argue the plan will ensure Britain remains a world leader in defence technology while delivering tangible benefits for working families.

Defence Industrial Strategy industry reactions

Commenting on the Defence Industrial Strategy announcement, Kevin Craven, CEO of ADS, said: “The primary purpose of defence and security is to protect and deter – but in doing so, the value we provide to the economy is increasingly critical to innovation and prosperity. Our members – the manufacturers and service providers behind the UK’s deterrence capability – are proud of all that we deliver for people, innovation, and security.

“This afternoon’s long-awaited Defence Industrial Strategy is a remarkable moment on that journey, and for the 180,000+ people driving our sector forward. Defence businesses are at the heart of local communities: our sector drives social mobility and prosperity through the high proportion of jobs we provide to people from all walks of life. Significant investment in wider skills packages, alongside the £250m investment in Defence Growth Deals, will be critical to maintaining both our defence posture and the talent that delivers it.

“Exports from the UK’s defence and security sectors have doubled in the last decade. UK-made capability is in demand, and any way that government and industry can work together to speed up this process is welcome.

“Our modelling, as noted by the Minister for the Armed Forces in his statement to the House, indicates that increases in spending could generate an additional 50,000 jobs and £8bn in value to the UK economy.

“Effective delivery of the Defence Industrial Strategy will deliver a whole-of-society benefit. Industry stands ready to play our part.”

The Defence Industrial Strategy (DIS) has also signalled a decisive shift in government procurement policy to recognise the strategic importance of the UK’s steel industry in delivering national defence and security. The new DIS notes that steel is an “industrial security priority” for supply chains, and marks a departure from the long-standing ‘global competition by default’ approach within the Ministry of Defence (MOD). Instead, a new, clear emphasis is focused on onshoring industrial capability.

In response, UK Steel Director-General, Gareth Stace said: “The Ministry of Defence is leading from the front. The Secretary of State for Defence has said that he wants UK steel to supply to UK defence projects. For too long, our producers have been overlooked for major defence contracts, despite our capability and quality. The Defence Secretary’s commitment in the DIS is a welcome endorsement of the strategic role of our sector.

“As global supply chains are pressured and geopolitical strains remain, the UK’s commitment to strategic sovereignty sends a powerful message. We look forward to working closely with the new Defence Industrial Joint Council to showcase our ability to scale up, innovate, and deliver the steel our armed forces need, produced right here in Britain.”