The Strategic Defence Review, chaired by former Defence Secretary and NATO Secretary General Lord Robertson of Port Ellen alongside General Sir Richard Barrons and Dr Fiona Hill, was launched by the Prime Minister in Glasgow on 2 June.
It sets out 62 recommendations on the future of UK defence and security capabilities, accepted in full by Government, and the procurement decisions underpinning these. It does not add to the decisions on resources set out in Autumn Budget 2024 and policy pronouncements thereafter – with defence spending to rise to 2.5% of GDP by March 2027, and to 3% at an unspecified date during the next Parliament, subject to fiscal conditions. The MoD contributed £29bn to industrial opportunities in 2023/4. Defence supports 440,000 jobs in the UK and 24,000 apprenticeships. The Review prioritises security and defence in the Euro-Atlantic region as the key focus of UK capabilities through the NATO first doctrine, with the Middle East and Indo-Pacific seen as the second most important region for the UK.
The forthcoming NATO summit later in June 2025 may see a target of 3.5% of GDP on defence spend being raised by some key defence powers.
The Prime Minister signals a move away from just-in-time defence supply chains to make reforms in procurement, industrial policy, and innovation.
The Secretary of State for Defence John Healey in his foreword says the Review will move the armed forces into warfighting readiness to deter threats and strengthen security in the Euro-Atlantic region, rooted in a NATO-first approach. Technology and AI play a key role in the strategy for the first time – looking at the combination of conventional and digital forces, usage of drones, AI, faster procurement, and stronger links between the military and the private sector.
The Review points to five new ambitions:
1. NATO first – leading in NATO to help deliver stronger European security through enhanced nuclear, new technological and updated conventional capabilities. Also requires a pragmatic approach to other multilateral partnerships such as AUKUS.
2. Move to warfighting readiness – more lethal “integrated force” and upscaled homeland security, with a common digital foundation and shared data. The Integrated Force must be capable of operating under multiple configurations, including autonomous sovereign missions, in coalition, and under NATO Component Commands.
3. Engine for growth – partnership with industry and transformed procurement processes. Defence should build relationships with the investors as well as the innovators on technology, through a new Defence Investors Advisory Group. Procurement should become segmented into major modular platforms (contracting within two years), pace-setting spiral and modular upgrades
(contracted within one year), and rapid commercial exploitation (contracted within three months). 10% of the MoD’s equipment procurement budget should be spent annually on novel technologies. This will also be supported by the new Defence Reform and Efficiency Plan.
4. Innovation driven by lessons from Ukraine – drawing on experience on usage of drones, data, and digital means of waging battle.
5. Whole-of-society approach – widening participation in the private sector, voluntary sector and beyond. Improving recruitment and retention through gap years, flexible working, and prioritised investment in defence accommodation.
The Context:
The Review concludes the UK faces multiple threats to its security, prosperity and democratic values in a more volatile and uncertain world. Longstanding assumptions about global power balances and structures are not as certain as before. The UK and its allies must therefore be prepared to deter and prevent a full-scale conflict with hostile forces by readying the capacity to fight and win (warfighting readiness).
New modes of being ready for such a conflict are required, making effective usage of new technology, data, AI and autonomous hardware to generate readiness and deterrence capacity.
The UK should be prepared for a lengthy period of any conflict by standing up the scale and sustainability of supply chains as necessary.
Homeland defence including cyber-security is key to the overall new strategy.
The Review seeks to remodel the Armed Forces and overall UK Defence capability into a tech-enabled integrated Force which deters and is capable of fighting and winning through innovation at wartime pace.
A whole-of-society approach to deterrence is recommended by the Reviewers.
Key proposals:
Defence has two key enabling roles finds the Review – to develop a thriving, resilient defence innovation and industrial base, and to contribute towards national cohesion and preparedness.
Government points to the establishment of the National Armaments Director (NAD) to drive the defence industrial strategy, £6bn in efficiency and productivity savings, and the introduction of a reformed defence procurement system working at pace and opened up to SMEs for the first time. The Review calls upon the NAD to configure two distinct new organisations: a Defence Research and Evaluation organisation considering early stage research, and a new UK Defence Innovation organisation, focused on commercial innovation and dual-use technologies. It recommends defence must be able to seed early-stage research and identify external innovation keeping the Armed Forces at the leading edge of technology, using purchasing power to shape commercial markets.
In accepting the findings of the Review in full, the following immediate actions are confirmed by Ministers, inform the Defence Industrial Strategy, and to form a Defence Investment Plan completed by autumn 2025:
1. Investing £15bn into the sovereign warhead programme until 2029 – supporting over 9,000 jobs.
2. Create a “New Hybrid Navy”, completing the Dreadnaught, SSN-AUKUS submarines, warships and support ships. Upgrade the UK’s aircraft carriers, and new autonomous vessels to patrol the North Atlantic and beyond.
3. Enhance the lethal capacity of the Army by a factor of 10, combining ground forces and tanks with air defence, communications, AI, long-range weapons and drones.
4. Upgrade the RAF through commissioning new F-35 jets, upgrade the Typhoon fleet, Global Combat Air Programme fast jets, and autonomous fighter jets.
5. Improve homeland security with up to £1bn new funding in air and missile defence and creating a new CyberEM Command.
6. Invest £6bn in munitions manufacturing, including £1.5bn in an “always on” supply chain pipeline, and opening at least 6 new energetics and munitions factories, seeking to raise export potential and creating over 1,000 new jobs.
7. Commit to continuous submarine production in Barrow and Raynesway seeking to produce a new submarine every 18 months, covering AUKUS submarine delivery, and the reinforcing the Continuous At Sea Deterrent with the replacements for the existing Vanguard fleet.
8. Build up to 7,000 new long range weapons in the UK thereby seeking to support 800 UK jobs.
9. Invest in innovation and autonomous systems with an export potential. Integrate Armed Forces through a Digital Targeting Web to be completed by 2027.
10. Transform aircraft carriers to become the first European hybrid air wings – with fast jets, long-range weapons and drones.
11. Establish UK Defence Innovation with £400m to invest in growth in UK defence companies. By connecting external innovation with Defence procurement, this organisation should act as an engine for growth in the defence and dual-use technology sectors.
12. Create a new Defence Exports Office in the MoD.
13. Renew military accommodation with at least £7bn in investment by mid-2029.
Structural changes in Defence organisation:
- Ensuring the role of the National Armaments Director is fixed on engaging with industry and international partners on the Government’s defence industrial and exports priorities.
- Supporting the continual adoption of new technologies, including AI, enabling step change on combat capacity and productivity gains.
- Defence relationships with finance, industries and local economies:
- Defence must develop better relationships with, and understanding of, the financial services sector. New funding models to be explored to make defence innovators a more attractive proposition for private capital, reduce the cost of finance for defence companies, and increase the ability to pool capital with allies.
- MoD should develop a dedicated strategy for the financial services sector by March 2026. Important starting points include: establishing a Defence Investors’ Advisory Group whose membership includes venture capital and private equity investors; and exploring alternative funding and financing models for Defence programmes and projects.
- A cross-government initiative to develop regional clusters for specific technologies and to stimulate place-based growth, from cyber in Manchester to AI in the North East of England and marine autonomy in Plymouth.
- The MoD should work with the Department for Education, DSIT (including directly with UKRI), and universities to invest in science, technology, engineering, and mathematics, and other specialist skills.
Other partnerships beyond NATO:
- At its peak, the AUKUS attack submarine programme will have more than 21,000 people working on it at UK sites, with the work generating an additional 7,000 skilled roles.
- The UK should ensure AUKUS and the Global Combat Air Programme are exemplars of co-innovation and industrial collaboration between allies. Underscoring its commitment to success, the UK should double down on both pillars of the AUKUS agreement, using Pillar 2 to test and develop a template for future technology partnerships.
Technological developments in modern warfare:
- Highly sophisticated weapons such as long-range precision missiles offer greater reach and are complemented with larger numbers of much less sophisticated weapons such as single-use drones and shells.
What next and outstanding issues:
1. Implementation of recommendations, including new procurement scheme differentiating between long-term and short-term technology, munitions, aircraft, submarines or frigates.
2. New role for National Armaments Director in terms of procurement and links with industry.
3. Creation of new Defence Exports Office within MoD.
4. Specific allocation to MoD until 2029 in Spending Review on 11 June.
5. Defence Industrial Strategy to follow in summer 2025.
6. Ongoing negotiations with the EU in terms of the Security and Defence Partnership Agreement and exploration of potential agreement to provide access to SAFE facility on defence procurement and rearmament.
How businesses can engage:
1. Set up meeting through BCC with Secretary of State for Defence and National Armaments Director on opportunities in UK regions and nations for local involvement in key supply and procurement chains.
2. Engage through BCC with HMT on new procurement routes for SMEs in the defence contracts being awarded.
3. Consider the new opportunities for exporting from the Review recommendations being adopted and the forthcoming Defence Industrial Strategy.
4. Think about how other businesses can be involved in the new approach to defence, eg. cyber-security companies, data, AI and other cloud or computer services companies.
5. Speak to businesses in local defence supply chains about skills and training plans for careers in defence-related industries and engage with Government on these.
6. Liaise with the BCC policy team – William Bain on trade, defence and security, Jonny Haseldine on industrial strategy, Hannah Larsen on skills and training, Ellis Shelton on infrastructure.