LONDON, Defence Minister John Healey has unveiled a landmark support package to ACCELERATE GROWTH and INNOVATION among small and medium-sized enterprises (SMEs) in the UK’s defence sector, as part of a bold strategy to strengthen national security and stimulate the domestic economy.
The package includes the launch of a £400 MILLION innovation body by July 2025, designed to fast-track development of cutting-edge technologies and enable SMEs to compete more effectively in major defence procurement contracts.
“We’re cutting red tape and backing British ingenuity,” Healey said during the announcement.
“This is a defence dividend strategy one that creates high-skilled jobs, strengthens supply chains, and sharpens our security edge in an unpredictable world.”
Key reforms include:
- Shortening defence procurement cycles to remove barriers for SME participation.
- Opening new funding channels for early-stage military technologies.
- Providing mentoring and infrastructure support to scale promising defence startups.
- Boosting collaboration between MOD, academia, and private innovators.
The announcement follows growing concerns that UK defence supply chains have become overly dependent on large multinational contractors, leaving innovative local firms locked out of key contracts.
Industry groups and tech entrepreneurs have welcomed the move, with the Defence Growth Partnership calling it a “transformative moment” for British defence manufacturing.
However, critics from opposition parties have urged transparency, questioning how the new body will ensure equitable access and whether oversight mechanisms will be in place.
Healey emphasized that the initiative aligns with the UK’s broader national security goals, including NATO readiness, Indo-Pacific engagement, and technological deterrence against cyber and hybrid threats.
The innovation body is expected to become operational by Q3 2025, with the first funding round scheduled for late summer.
