Budget opens defence opportunity

Homeland December 3, 2025

Running for a sixth consecutive year, the DASA Investment Showcase was held in London in November 2024.

According to analysis from professional services firm PA Consulting, the recent Budget has created a significant opportunity for the UK to reinforce its position as a global hub for defence innovation and manufacturing.

Guy Neale, a defence and security expert at the firm, suggests that by prioritising private capital through a new National Wealth Fund and a targeted industrial strategy, the government has opened a pathway to attract international partners and boost exports, thereby contributing to wider European defence resilience. However, the analysis cautions that this potential for sustained growth cannot be realised through government spending alone. A series of practical steps are required to transform the UK’s defence sector into a more attractive environment for global investment and sales.

He said: “By prioritising private capital – through the National Wealth Fund and targeted industrial strategy – the Budget has created an opening for the UK to leverage its position as a hub for defence innovation and manufacturing, attracting international partners, and boosting exports to support European defence resilience.

“The opportunity may be there, but if we want real, sustained growth, we cannot rely solely on government spending – we need to take a series of practical steps to turn the UK’s defence sector into a magnet for global investment and sales.”

A key recommendation is the need to build more effective partnerships across the entire supply chain. Such collaboration is seen as essential for high-growth companies, particularly small and medium-sized enterprises (SMEs), to secure the necessary funding to innovate and scale their operations effectively. Furthermore, the analysis calls for a shift in procurement and export models. Creating commercial conditions that generate steady and predictable revenue streams, rather than relying on infrequent large-scale orders, would provide greater stability for businesses and make the sector a more appealing prospect for long-term investors.

To accelerate the transition of technology from development to deployment, the report advocates for enhancing the Rapid Commercial Exploitation marketplace. This would involve creating shared enablers, such as access to field testing facilities, working capital, and mechanisms for rapid feedback from end-users, reducing the barriers to entry and growth for innovative firms. Another critical measure proposed is the integration of exportability into the Ministry of Defence’s procurement competition criteria. Embedding this requirement from the outset would align MoD buying behaviours with the demands of the global export community, ensuring that UK-developed products are competitive on the international stage from their inception.

Finally, for private capital to flow into the sector with confidence, greater certainty is required. The analysis stresses the importance of the forthcoming Defence Investment Plan. It is argued that this plan must provide as much precise and confidence-rated analysis as possible, giving investors a clear and reliable basis upon which to make long-term financial commitments. Without these foundational changes, the opportunity to fully leverage private capital to secure the UK’s defence industrial base may not be fully realised.

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