The UK Ministry of Defence’s latest Defence Footprint report has highlighted how increased investment in defence is driving economic growth and innovation across every region of the country, solidifying the sector’s position as an engine for national prosperity.
With the government pledging to raise defence spending to 2.6% of GDP by 2027, the Ministry of Defence (MOD) plans to invest over £270 billion in defence through this Spending Review period – with an ambition to reach 3% in the next parliament. This funding uplift represents the largest sustained increase since the Cold War and is aimed at strengthening both national security and the industrial base that underpins it.
In 2024-25, MOD expenditure with UK industry reached a record £31.7 billion – a real-terms rise of 6% on the previous year. Over 272,000 jobs are now supported directly and indirectly by MOD contracts, alongside 24,000 apprenticeships, demonstrating defence’s pivotal contribution to skills, innovation and employment nationwide.
According to the MOD, the impact is deeply regional. From shipbuilding in Scotland and submarine production in Barrow-in-Furness, to cyber innovation in Gloucester and aerospace engineering in Derby, defence investment is creating high-value jobs in communities across the UK. The South West and South East lead in total MOD regional expenditure, at £6.6 billion and £7.9 billion respectively, while the North West’s £4.8 billion spend continues to sustain critical submarine and combat air programmes.
Small and medium-sized enterprises (SMEs) are also benefiting, with £1.2 billion in direct MOD expenditure and hundreds of millions more flowing through prime contractor supply chains.
The government’s Defence Industrial Strategy underpins this growth, focusing on readiness, resilience and innovation – ensuring the UK remains one of the best places in the world to start and grow a defence business. For the UK’s defence supply chain, defence investment is not only strengthening national security but also securing economic prosperity and opportunity in every region.
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Post written by: Robert Atherton
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