Defence firms left waiting as investment plan delay bites

A defence company in West Sussex developing counter-drone and air defence technology has been left on hold since last year awaiting clarity on the UK Defence Investment Plan, a Liberal Democrat MP told the House of Commons during Treasury questions on 28 April.

John Milne, MP for Horsham, raised the case of Chess Dynamics, part of the Cohort group, which he described as a world-leading developer of exactly the capabilities the armed forces need. Without clarity from the DIP, Milne said the company cannot commission new air defence systems, leaving the next generation of Royal Navy frigates potentially exposed. “It needs to know now,” he said, asking the Chief Secretary to the Treasury to meet him and Chess Dynamics to provide the certainty the company required.

Chief Secretary James Murray defended the government’s record on defence investment, pointing to over a thousand contracts signed since the general election including a billion-pound contract for medium helicopters in Yeovil, half a billion pounds invested in radar systems, and £100 million to support submarine-hunting aircraft. “This Government are raising investment in defence to the highest sustained level since the cold war and it is at the core of ensuring that we are protecting our nation’s security,” he said, without directly addressing the DIP delay or agreeing to the requested meeting.

The exchange reflects a pattern of concern emerging across the UK defence industry over the delayed Defence Investment Plan, which is intended to set out the MoD’s funding priorities and programme commitments for the coming years. The plan’s finalisation has been cited in recent parliamentary correspondence as a blocking factor for a number of capability and infrastructure decisions. The collapse of Aeralis, the modular jet aircraft developer that had positioned itself as a potential Red Arrows replacement, was directly attributed by its administrators to cashflow pressure caused by continued delays to the DIP.

Conservative shadow minister James Wild pressed Murray on whether the Chancellor was blocking the investment plan, citing former Defence Secretary and NATO Secretary General Lord Robertson’s warning that “we cannot defend Britain with an ever-expanding welfare budget.” Murray dismissed the challenge, pointing to the previous government’s welfare spending record and reaffirming the commitment to raise defence spending to 2.6% of GDP by next April.

Dame Meg Hillier, Chair of the Treasury Committee, also asked whether the government would consider joining the Defence, Security and Resilience Bank to accelerate defence investment. Murray noted the UK had already signed up alongside Finland and the Netherlands to a multilateral defence budget.