Defence Online

UK Businesses Back Defence Investment Plan but Warn Procurement Reform and Finance Support Must Follow

Homeland July 24, 2026

New research from Barclays reveals strong appetite among UK businesses to grow their defence involvement – but funding barriers, skills shortages and procurement complexity remain significant obstacles to unlocking the full potential of the Defence Investment Plan.

Four in ten UK businesses expect to increase their involvement in the defence sector over the next 12 months, according to new research published by Barclays at Farnborough International Airshow. The findings, drawn from the bank’s Business Prosperity research, paint a picture of genuine and broad-based commercial confidence in the direction of UK defence policy – but also highlight a clear gap between strategic ambition and the practical conditions businesses need to participate at scale.

Two thirds of businesses surveyed believe the Defence Investment Plan will create meaningful growth opportunities for UK firms, with almost half expecting a positive impact on their region and 38 per cent anticipating direct benefits for their own business. Leaders identified skills and workforce development, new investment and partnerships, R&D in emerging technologies and international exports as the primary areas of expected benefit – a breadth of anticipated impact that reflects how widely the current investment cycle is being felt beyond the traditional defence industrial base.

The appetite to participate is translating into concrete hiring and investment intentions. More than a third of businesses expect to recruit new staff over the next 12 months to support defence-related contracts, while similar proportions plan to increase investment in workforce development, research and development, and digital or advanced technology capabilities. For a supply chain audience that has sometimes struggled to justify investment in defence-facing capability against uncertain pipelines, the strength of these intentions is notable.

However, the research is equally clear that appetite alone will not be enough. Funding and cashflow availability was cited as a barrier by 26 per cent of respondents, skills shortages by 25 per cent and uncertainty around procurement processes by 24 per cent. When asked what would most influence their decision to work with the defence sector, businesses pointed to faster and more efficient procurement processes (27 per cent), access to financing and scale-up capital (25 per cent) and clearer long-term demand signals from government (25 per cent) – a trio of concerns that maps directly onto the structural reforms the MoD has committed to through the Defence Industrial Strategy and SME Action Plan.

The finance dimension is particularly significant. While 61 per cent of businesses said they would be confident financing the upfront costs of a defence contract, one in five said they could not, and a further 23 per cent called for government to give lenders clearer visibility of future revenues to enable them to support defence suppliers more effectively. Two thirds said a government-backed Defence Guarantee Scheme would either encourage them to enter the supply chain or be beneficial to their existing involvement – a finding that points to a specific and actionable policy intervention that could meaningfully widen participation.

Stuart Foster, Head of Coverage at Barclays UK Corporate Bank, described the priority as making opportunities easier to access, with clearer procurement, better revenue visibility for lenders and targeted support needed to unlock the finance and investment the sector requires. Spyros Svoronos, Global Head of Industrials Investment Banking, framed the challenge at a global level – with long-term private capital increasingly needed alongside government funding to scale the technologies shaping the future of defence, from AI and cyber to advanced manufacturing and energy resilience.

For the UK defence supply chain

The Barclays research gives statistical weight to what many supply chain businesses already know from experience: the opportunity is real, the intention to participate is strong, but the pathway in remains harder than it should be. For SMEs in particular, the combination of procurement complexity, cashflow risk and unclear demand signals creates a compounding barrier that depresses participation even when strategic intent is high. The findings strengthen the case for the procurement reform, finance access and demand signal improvements that both government and industry have been calling for – and put pressure on the delivery mechanisms now being stood up to demonstrate tangible change at pace.

These are exactly the issues at the heart of the DPRTE UK National Defence Procurement and Supply Chain Summit, taking place on 22 October 2026 at the Kimpton Clocktower Hotel, Manchester. Key themes directly reflected in the Barclays findings include:

• Procurement reform and reducing barriers to supply chain participation
• Access to finance, working capital and scale-up funding for defence suppliers
• Long-term demand signals and pipeline visibility for SMEs and investors
• Skills, workforce development and defence sector readiness
• Regional economic impact and the role of defence clusters
• Innovation investment in AI, cyber, advanced manufacturing and energy resilience

To explore supply chain opportunities across UK defence and register for the summit, visit dprte.co.uk

Join our new expanding community at DPRTE.co.uk  – our new Defence Community Platform, creating a single, year-round digital hub for the UK’s defence procurement and supply chain sector.

Post written by: Vicky Maggiani

Vicky has worked in media for over 25 years and has a wealth of experience in editing and creating copy for a variety of sectors.