The Ministry of Defence (MOD) has confirmed that it will publish its target for direct spending with small and medium-sized enterprises (SMEs) for the 2024-25 financial year by June 2025.
In response to a parliamentary question from Conservative MP James Cartlidge, Defence Minister Maria Eagle reaffirmed the government’s commitment to increasing SME participation in defence procurement.
“The target, covering the period up to 2028, will be challenging but achievable and will be significantly above the current level of MOD direct spending with SMEs of 4% (£1.3 billion annually) in Financial Year 2023-24,” Eagle stated.
She also highlighted that every 1% increase in SME spending would equate to over £250 million in additional direct MOD contracts annually.
The announcement reflects growing efforts to diversify the UK’s defence supply chain and ensure that smaller businesses play a greater role in supporting the country’s armed forces.
The final target, once set, is expected to significantly exceed the current 4% SME spend, reinforcing the MOD’s commitment to innovation, economic growth, and greater competition in defence procurement.
If we want to get more bang for buck then we need to engage the SME community in a bit more of a move fast break things approach which implies spiral development and accepting failure.
Giving all the uplifts to the primes won’t achieve much as they will be flat out increasing capacity!
So if we want a fast ramp then the SME community it is.
Sure we need more big things that go bang as well as warships and you can’t create those in an industrial unit.
In the coming months, the UK defence picture will witness greater urgency to building up our forces. Conscription of some sort can’t be ruled out if Ukraine’s peace keeping commitments grow expediently. The notion that the UK could sluggishly aim for a 2030 window, for new kit needs to undergo a rapid rethink. Other principal European countries will spur on the MOD as they change up a gear in light of a faster US detune of its NATO commitments than at first feared. As Trump dismantles US power and influence internationally, the ramifications on its military could be huge. We are probably a year away from a point where the US people take stock of its government, after that, who the hell knows as the Dollar nose dives and takes current living standards in the direction of the basement!