Britain’s long awaited Defence Industrial Strategy 2025 (DIS 25) has been released. It commits the Government to the largest sustained uplift in defence spending since the Cold War and seeks to complement the ambition of Strategic Defence Review 2025 (SDR 25). It sets a short-term target of raising spending from 2% of GDP to 2.6% by 2027, declaring an “ambition” in the medium term for 3% by 2030 in the next Parliament. Longer term it outlines a “historic commitment” to reach a target of 5% alongside other NATO allies by 2035. The investment trajectory the strategy sets out seems intent not only to underwrite British national security but to position its defence industry as a key engine of sovereign economic growth, regional regeneration and technological capability development.
DIS 25 follows close on the heels of the recent announcement of a successful £10bn contract being signed for the UK to supply the Norwegian navy with Type 26 anti-submarine frigates. Its release also coincides with the Britain’s flagship defence industry sector event Defence and Security Equipment International 2025 (DSEI 25) in London that serves as a physical totem of the Government’s intention to encourage domestic and international commercial interest.
The 108-page strategy document contains suitably impressive numbers related to investment allocations. UK Defence Innovation has been tasked to “invest in [Britain’s] most innovative defence companies” with a ring-fenced annual budget of £400 million, plus a mandate that 10% of its equipment procurement is spent on novel technologies. Likewise, £15 billion has been committed to the “sovereign warhead programme” and a further £6 billion to “strengthen our supply chains… in munitions this parliament”. Efforts have also been made address procurement efficiency with the National Armaments Director being given authority of a “new segmented approach”. Coupled with a commitment to a five-year, proactive forecasting process promises to reduce the need for emergency budget supplements and enhance market trust. Reference is also made throughout to wider Government targets that promise to “reduce administrative costs of regulation to business… to create a regulatory environment fit for the current era of threat”. Taken on face value, there is much to be optimistic about.
For the British Army there is much to be encouraged by. Faster contracting and procurement cycles promise to narrow the gap between user requirement definition and frontline delivery. Projects such as RAPSTONE and ASGARD are recent examples of how this approach can be done, alongside more deliberate (i.e. traditional) programme of record processes that continue at pace. Expanding these ‘proven commercial routes’ to deliver capabilities for units and formations that range from armoured platforms, ground-based sensors, communication suites and munition stocks is an exciting prospect. Equally promising is the DIS’ pledge to “increase prototype warfare” as this directly relates to the Army’s wholesale drive for Robotics and Autonomous Systems (RAS) integration at every echelon. From a section operating with Uncrewed Ground Vehicles (UGVs) and Air Vehicles (UAS), to a formation headquarters that can plan and execute with AI-enabled battlefield analytics, this approach may see the transition from lab to field at unprecedented speed.
That said, whilst DIS 25 has been broadly welcomed for its ambition, there are concerns and criticisms surrounding DIS 25 it. Commentary at DSEI 25 revealed a persistent frustration among industry leaders regarding the MOD’s pace of reform, particularly in contracting and capability delivery. Concerns were voiced about bureaucratic inertia and the slow translation of strategic ambition into executable contracts, with some firms publicly citing delays in the Land Mobility Programme (LMP) and uncertainty around the new medium helicopter programme as emblematic of systemic issues. In contrast, speeches by Defence Secretary John Healey and Chief of the Defence Staff Air Chief Marshal Sir Rich Knighton struck a more assertive tone, emphasising urgency, readiness and reform.
The SofS pledged to “tear up the old rulebook,” promising faster procurement and a defence sector that innovates at “wartime pace”. The new CDS echoed sentiment and warned that “reviews do not deliver capability or deterrence”, calling for accelerated adaptation to meet the demands of modern conflict. First Sea Lord General Sir Gwyn Jenkins went further by outlining a bold vision for a hybrid Royal Navy built around “autonomous platforms that will refine maritime military power”. Collectively, these speeches suggest a recognition within British senior leadership of the need to close the gap between strategic intent and industrial execution.
Fundamentally, there are three areas of concerns regarding DIS 25. First, though the DIS does strongly position defence as a growth driver it risks confusing economic policy with strategic and military deterrence. Released sequential after SDR 25 and the Modern Industrial Strategy 2025 there is somewhat of a lack of integration, duplication and policy ‘drift’. The emphasis on jobs and regional regeneration could dilute much needed focus on lethality, readiness and operational capability if taken in isolation. The fact that the defence spending targets include intelligence budgets (e.g. GCHQ, MI5 and MI6) compounds this risk further as they inflate headline figures without necessarily reflecting a corresponding increase in conventional military capability. Second is British industrial capacity and ability to deliver in the short to medium term. Though Government funding investment over years and into the next Parliament is welcome, the push to diversify and broader Britain’s defence company portfolio risks fragmenting the sector. Whilst not a reason to alter the approach now, there is a need to monitor how smaller firms cope with military capability contracts to ensure they do not become overburdened and fail to deliver.
Finally, third and most threatening of all, is the harsh reality that threatens the fiscal credibility of its delivery. Not unique to Government defence policy it is none the less acute. As borrowing becomes more expensive a public spending reappraisal or allocation could be forced to occurred. UK bond yields hitting a 27-year high just five days before this announcement is an ominous sign. Ultimately, the Autumn budget expected in November will be the litmus test as to the feasibility and sustainability of this DIS and with it how close the British Army can get to the ambition of SDR 25.
DIS 25 is a strategic opening for the British Army and offers the means to close the factory-to-field gap. Scaling advanced technologies and rebuilding Britain’s sovereign industrial base is demanding; turning grand strategic rhetoric into sustained operational reality is harder still. The appointment of a NAD and the establishment of a Military Strategic HQ (MSHQ) show intent being converted into institutional levers. Success now depends on utilising them for procurement programmes, prioritised and funded, to make delivery visible and meaningful.
Laurence Thompson
Laurence Thompson is a Chief of the General Staff Fellow.