MOD Outlines Strategic Procurement Reform and SME Growth Targets at DPRTE 2026

Homeland March 31, 2026

At the opening of the DPRTE 2026 conference in Farnborough, Minister for Defence Readiness and Industry Luke Pollard MP detailed a comprehensive strategy to align UK defence procurement with “warfighting readiness” while positioning the sector as a primary engine for national economic growth.

Central to this agenda is a significant increase in financial commitment, including an additional £5 billion for the defence budget this year and a trajectory to reach 2.6% of GDP by 2027. The Minister emphasised that this funding is intended to strengthen the domestic industrial base, noting that 94% of the £4.9 billion in contracts signed since October 2025 has been awarded to British-based enterprises.

A core component of the new procurement model is the integration of small and medium-sized enterprises (SMEs) into the core supply chain. The Ministry of Defence (MOD) has established a target to increase direct spending with SMEs by 50% by May 2028. To facilitate this, the government is standing up the Defence Office for Small Business Growth, designed as a “one-stop shop” to simplify the entry process for smaller firms. Furthermore, the Minister announced the launch of the AWS UK SME Vanguard programme in partnership with Amazon Web Services and Make UK Defence. This initiative provides $1 million in cloud computing credits to an initial cohort of five UK SMEs to accelerate the digitisation of manufacturing and defence solutions.

The Minister highlighted several major contract awards that underscore the government’s “Backing British” policy. These include a £1 billion contract for the New Medium Helicopter to be built in Yeovil, a £650 million Typhoon upgrade programme, and a £280 million seven-year agreement for the maintenance of 3,000 small military vessels. The latter involves a mix of prime contractors, such as Babcock and Serco, and SMEs including Golden Arrow Marine and UK Docks. Significant investments are also being directed toward emerging technologies, including uncrewed surface vessels from Kraken and the establishment of six new energetics factories to resolve supply chain bottlenecks.

To provide industry with long-term certainty, the MOD is preparing to publish the Defence Investment Plan (DIP). This document will implement the findings of the Strategic Defence Review (SDR), offering a ten-year pipeline of capability requirements and investment priorities. Regional development is also being supported through £50 million Growth Deals in Wales, Scotland, and South Yorkshire, with Plymouth and Northern Ireland expected to follow shortly. Additionally, a new UK business centre will be established in Kyiv to support industrial exports and collaboration with Ukrainian forces. These measures collectively signal a shift toward a more agile, UK-centric procurement environment focused on rapid innovation and industrial resilience.

If you would like to join our community and read more articles like this then please click here