The UK government has unveiled plans to ensure international defence contracts deliver tangible benefits for British businesses, workers and communities through a new ‘Back British’ offset framework.
Defence Readiness and Industry Minister Luke Pollard announced a 12-week industry consultation at the inaugural Defence Procurement Research, Technology and Exportability (DPRTE) Summit in Manchester on 23 October, addressing over 500 small and medium-sized enterprises.
The proposed offset approach would require international contractors winning UK defence contracts to create jobs, investment opportunities and knowledge transfer within Britain. This could include establishing UK-based manufacturing facilities, integrating British SMEs into supply chains, or investing in domestic skills development as contractual obligations.
“Small businesses are the backbone of our economy. We are increasing defence spending and directing more of that at UK based firms,” said Minister Pollard. “Where we have to buy from foreign firms, a new offset approach means UK SMEs will benefit from offset agreements.“
The initiative forms part of the government’s Strategic Defence Review, aiming to reform procurement processes whilst strengthening relationships with international partners and allies. SMEs stand to gain significantly, with the government already committed to increasing spending with smaller firms by £2.5 billion by May 2028.
National Armaments Director Rupert Pearce emphasised the policy’s regional focus: “The ‘Back British’ consultation demonstrates our commitment to ensuring defence investment creates opportunities for UK businesses across all regions.“
Industry bodies have warmly received the announcement. ADS CEO Kevin Craven described offset agreements as “a powerful tool” for ensuring Armed Forces receive appropriate equipment whilst unlocking growth opportunities for UK businesses of all sizes.
Make UK Defence Director-General Andrew Kinniburgh called it “a major win for UK industry,” noting that dozens of developed nations already operate successful offset policies. “This demonstrates that the UK government is serious about backing UK based businesses,” he added.
The consultation will shape the final offset framework, ensuring effectiveness for British-based businesses whilst maintaining strong international partnerships. Additional support measures include establishing a Defence Office for Small Business Growth from early 2026 and a new North West Cyber Accelerate programme for technology start-ups, led by the National Cyber Force.
Following the summit, Minister Pollard and Rupert Pearce visited BAE Systems facilities at Samlesbury and Warton, observing F-35 and Typhoon production, before engaging with SMEs and supply chain partners at Lancaster University’s Altitude innovation hub.
The initiative reinforces defence as an economic growth engine whilst strengthening Britain’s industrial base and Armed Forces readiness. The conversation will continue at DPRTE 2026 this coming March.
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Post written by: Robert Atherton
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