UK unveils £250m Defence Industrial Strategy to drive regional jobs and innovation

The UK government on Monday launched a new Defence Industrial Strategy (DIS) backed by £250 million of funding aimed at boosting regional economies, creating skilled jobs and accelerating innovation in the defence sector.

Defence Secretary John Healey will unveil the strategy during a visit to Bristol-based defence technology firm Rowden on 8 September to open its new facility. The government said the package could support as many as 50,000 new defence jobs by 2035 and is intended to offer opportunities such as highly skilled engineering posts and apprenticeships across the country.

At the centre of the strategy are five new Defence Growth Deals designed to unlock the potential of local economies across England, Wales, Scotland and Northern Ireland. The £250 million fund will be used in partnership with local authorities, businesses, academia and the defence sector to back job creation, skills development and innovation, the government said.

"These deals offer a new partnership with UK Defence to build on industrial and innovation strengths that regions already hold," Healey said. "Together we aim to drive an increase in defence skills, SMEs and jobs across all four nations."

Chancellor Rachel Reeves said the plan would "unleash the power of local economies while securing our country," framing the strategy as both an economic and national security investment.

The government set out where the first Defence Growth Deals will focus. Plymouth will be promoted as the national centre for marine autonomy, supported by an expected £4 billion of naval investment over the next decade. South Yorkshire is to develop as a hub for advanced materials and steel production, supplying specialist components for submarines and other platforms. Wales will expand research and industry around unmanned aerial vehicles and autonomy, building on firms and facilities such as Tekever and the Snowdonia Aerospace Centre. Scotland’s deals will back maritime and space technology clusters around the Clyde and Rosyth alongside academic centres. Northern Ireland’s package will back cyber security and dual-use technologies, leveraging companies like Thales and Harland & Wolff and research at Queen’s University Belfast.

The strategy, the government said, is a response to evolving global security threats and the need for rapid industrial capacity and innovation. Officials noted the war in Ukraine as part of a shifting strategic landscape that has increased emphasis on resilient domestic supply chains and quicker adaptation of new technologies.

Defence spending is set to rise to 2.6% of GDP by 2027 with a government ambition to reach 3%, a trajectory ministers argue makes long-term industrial investment necessary to meet capability needs while supporting growth. The DIS is framed as part of that long-term investment, aimed at strengthening supply chains, supporting small and medium-sized enterprises and opening routes into defence employment for young people.

The fund is intended to be catalytic rather than exhaustive, with local partnerships expected to pool additional public and private investment. Officials said the deals would direct money toward skills and training programmes, research collaborations, facilities and supply-chain upgrades to help firms win defence work.

Industry groups and regional leaders welcomed the emphasis on clusters and skills, but analysts cautioned that delivering tens of thousands of jobs will depend on the pace of procurement, the ability of suppliers to scale, and the effectiveness of local partnerships. The government has previously used targeted industrial initiatives to try to spread economic activity beyond London and the southeast; ministers said the DIS builds on that approach by linking defence procurement and industrial policy to regional economic priorities.

Healey’s opening of Rowden’s new Bristol facility on 8 September will provide an early public example of the strategy in action, officials said, as ministers seek to show tangible progress on jobs, apprenticeships and commercial partnerships in the months ahead.