On Monday, the Government announced its much-anticipated Strategic Defence Review (SDR), a blitz of recommendations and statistics: £15 billion investment in the UK’s nuclear warheads; £1.5 billion for 6 new munitions factories; 7000 long range UK-built weapons set to be procured; a new conventionally armed nuclear-powered attack submarine every 18 months; the list went on.
The Government accepted all of the SDR’s 62 recommendations.
The commitments are bold and welcome for an industry that has suffered from chronic lack of investment in the past.
Now the sector must turn its head to the opportunities and potential pitfalls as the SDR is implemented.
The SDR reiterated the Prime Minister’s commitment for the UK to reach 2.5% of GDP spending on defence by 2027, with an ambition to reach 3% in the next Parliament.
Despite this pledge marking a wide-scale shift in UK thinking, 3% already seems like old news. In the days which have ensued, a global defence ministers meeting in Brussels confirmed speculation that NATO Secretary General Mark Rutte would propose that alliance members spend 3.5% of GDP on defence and 1.5% on military infrastructure such as intelligence and cyber-protection. With the US pushing for 5% too, even further fiscal stretching may come down the line across the Parliament.
Ramping up this spending will take tough decisions domestically. Labour has already slashed the international aid budget to fund defence and similar trade-offs are inevitable. The Department for Environment, Food and Rural Affairs (Defra), Department for Culture, Media and Sport (DCMS), and Department for Business and Trade (DBT), all seem set for a difficult few years.
Amidst this prioritisation of defence, expect questions on where exactly this spending is going, why it costs so much to defend Britain, and why it should be at the expense of other departments. Industry and procurement partners may face tough scrutiny in front of select committees and should be prepared to advocate for their work in the political arena.
The Treasury’s answer to questions of profligacy is the formation of the Defence Growth Board to ensure targeted spending. Those engaging with MOD should remain cognisant of Rachel Reeves’ dual-focus on growth whilst keeping spending in check. Opening the defence taps does not mean a free for all, and industry should ensure they are aligning with Treasury interests as well as MOD’s.
Much of the detail on how the SDR will be implemented will need to be set out in the promised Defence Industrial Strategy (DIS), and Defence Investment Plan of this year. The government-wide Industrial Strategy due to be published in tandem with the Spending Review will also set out a broad strategy on defence investment and growth.
Procurement reform should form a vital part of these plans, especially to foster novel and innovative technology from British startups and SMEs, introducing new partners for government and primes, particularly in AI and cyber.
The full-time appointment of the new National Armaments Director (NAD), will seek to enact the reform recommendations in the SDR, bringing forward a new 3-part segmented approach which aims to engage industry earlier and shorten acquisition times down to 3 months in the case of some uncrewed systems and digital software. Whoever steps into the role will be perhaps the most important point of engagement for industry going forward.
Active dialogue between industry and MOD on this reform is vital to guide government towards more efficient ways of working. There is also appetite on the backbenches to engage with British defence firms, with Labour MPs such as Alex Baker and Luke Charters campaigning hard to open up financial services to the defence sector. A well-constructed public affairs campaign can highlight who this network of MPs is, how to engage them, and what outcomes you can achieve.
Britain has finally woken up to a threat we have long had the luxury to ignore. The implementation of the SDR and incoming DIS make defence a ripe area for growth across this parliament, but it will only be achieved through strong partnership between Government and industry.
Having an effective public affairs backbone in any defence communications strategy has never been more vital.
To find out more about the SDR or the future of defence public affairs, please get in contact with the team at [email protected]
