A high-functioning defence sector is a valuable contributor to growth

In February 2025, the British government committed to increase defence spending to 2.5% of GDP by 2027. Driven by a number of factors, not least the continued Russian hostility towards Ukraine and the need for a robust European response, The Prime Minister declared it a move that ushered in a new era for national security. 

These words align with sentiments raised in the government’s Defence Industrial Strategy Statement of Intent, in which it highlighted a desire to see the defence sector at the heart of growth ambitions. 

Whether or not the Prime Minister’s claim turns to reality, the promise of increased spend and a clear intent to put defence at the heart of economic growth presents an opportunity for the industry to step up and put forwards ideas for how to respond to the ever-evolving security challenge.  

A fit-for-future estate 

Absent from the Statement of Intent is reference to the defence estate and associated infrastructure. Investing in equipment is paramount, but overemphasis risks exacerbating the issue of inadequate funding to maintain and enhance the existing estate, let alone build new, fit-for-the-future facilities. The reality is that the two combined provide a strong and stable platform for dynamic and effective responses to an evolving global defence environment.  

Crucially, this investment must be part of a confident long-term vision. The impact of multiple spending reviews and the associated stop-start nature of major projects, triggered by point-in-time fiscal assessments, dent confidence across the supply chain and hinder already protracted bidding and approvals processes. A supply chain without a guaranteed pipeline can’t drive the efficiencies that come with a known flow of work. The defence sector, one of innovation and ambition, must retain the best and brightest suppliers, but a failure to offer clear and consistent work risks driving these firms elsewhere.  

The sector needs to create better visibility of planned infrastructure investment for the wider construction industry too. With the anticipated spring publication of the Infrastructure and Construction Pipeline set to reignite industry enthusiasm, a failure to incorporate defence opportunities risks putting the sector on the back foot.     

The existence of a physical estate spread across the country dictates that much of the work required to maintain and enhance it must be done on location. This presents a considerable opportunity for regional supply chain organisations working in the built environment and construction, with proximity being a selling point. Already, government defence spending supports over 400,000 jobs. According to modelling by the Construction Industry Training Board, if projected growth is realised, UK construction employment will rise to 2.75 million people. The defence sector can capitalise on this and feed into a positive national trend.  

Bringing in an overarching delivery partner, like Mace, to serve as a guiding mind and coordinate a national portfolio will ensure consistency and efficiency (while supporting the government’s desire to create meaningful partnerships). Underpinning this role with a capable regional SME supply chain prioritises UK businesses and spreads prosperity, in line with further government objectives. 

Honing procurement with a ‘private sector mindset’ 

In order to ‘seize the future’, the government intends to “dramatically increase the pace in procurement”. The Statement of Intent also states that “we need greater defence and economic output for every pound spent”. 

Through our work with DE&S, we have seen firsthand the scale and scope of the procurement challenge faced by the defence sector. Although not unique to defence, it is not uncommon for public sector organisations to find themselves lacking in terms of capability, leadership and governance in relation to major programme and project delivery – whether that’s physical infrastructure delivery or the management of an extensive procurement process. Augmenting and enhancing capability through the use of a diverse collection of private sector organisations not only helps to bring innovation and resilience but frees up client organisations to focus on what they do best. For the defence sector, this means developing strategies and people to keep our nation and allies safe.  

To be more efficient, the defence sector needs to embrace digital technology and data. Investment into systems, processes and people is crucial to this and collaboration with the private sector can aid this transition as well. Coordinating and integrating data and sharing it across functions (as appropriate) through the likes of a PMO must become commonplace if the nation’s defence industry is to deliver the efficiencies needed to achieve a best-in-class procurement approach. 

An impact beyond defence 

For the Defence Industrial Strategy to take a truly holistic view of things, it should consider the legacy it leaves beyond its own sphere of influence. With around 15,000 service personnel leaving the military every year, along with civilian staff, the defence sector presents the nation with a highly skilled and motivated workforce. The Statement of Intent makes refence to the importance of training and skills, but in the context of the sector. There should be an addition to reflect the benefits of training and developing personnel ahead of a transition into civilian life. This can surely be achieved through strategic partnerships with organisations across the supply chain; working together to find opportunities to use live commissions to engage, teach and upskill individuals so they can continue to support the nation’s resilience and prosperity as civilians.  

At Mace, we benefit directly from the unique skills possessed by nearly 300 people with a military background. As a signatory of the Armed Forces Covenant, we actively recruit people transitioning from the military to civilian life, such is our recognition of the significant role they can play in enhancing the nation’s built environment both within and outside the defence sector. 

Enhancing the Defence Industrial Strategy 

The Statement of Intent sets a clear and positive direction of travel for the nation’s defence sector. A commitment to increase defence spending to 2.5% of GDP by 2027 since the publication of the Statement of Intent only serves to underline the importance of getting this right. With a bit more lateral thinking, the opportunity for growth could be huge.