British firms risk missing out on defence spending uplift, new report reveals

Comment now Next BRITISH defence firms could miss out on a major uplift in military spending unless the procurement process is sped up, research shows. Four in ten firms warn that “unclear” defence contracts could even increase UK reliance on imported technology, a survey reveals. John Healey will set out a pathway to hitting 3 per cent of GDP at next year’s Spending Review Credit: PA Andy Burnham has committed to reaching NATO targets on military spending on 2035 Credit: AFP Advertisement A third of firms say investment would be unlocked in technology, equipment and production capability if there is a clearer pipeline in defence spending at the Budget, the study shows.

The warning shot comes from findings in a new report Scaling UK Defence Tech produced by Barclays . Sign up for the Money newsletter Thank you! Email address Please provide a valid email. Your info will be used in accordance with our Privacy Policy You'll now receive top stories, breaking news, and more, straight to your email. It comes as Chancellor John Healey will this week set out nearly £4.7 billion in funding in the Budget to fulfill the Defence Investment Plan.

A pathway to reaching 3 per cent of GDP on defence spending will be set out next year at the Spending Review – with a NATO target to reach 3.5 per cent set for 2035. read more on politics QUIT CALLS Tories demand John Healey RESIGNS unless Budget meets 3% defence spending target THE SUN ON SUNDAY SAYS Defence must be top priority for Labour when Healey delivers Budget The survey of 1,036 business chiefs also reveals that nearly two-thirds, some 65 per cent, want at least half of all military spending to go firms both operating and investing in the UK.

More than a third of firms even expect businesses to reduce or delay investment without clearer procurement rules. Staggeringly, one in three businesses say defence tech firms could even look overseas for investment. Reforms should include a clearer route to move from successful trials towards government contracts, according to 61 per cent of firms. Advertisement Most read in Money PAY DAY Two million workers to get pay rise in Budget - see if you'll get the boost PUMP PROTECTION Chancellor set to freeze fuel duty and keep 5p fuel discount at Budget PRICES TO SOAR Fresh energy bill blow for millions as households face huge hike in January SNOOP SQAUD Banks forced to hand over benefit claimant data in fresh fraud crackdown Matt Hammerstein, CEO, Barclays UK Corporate Bank, said: “UK businesses don’t lack the technology or the ambition to strengthen our defence base, but too often the system holds them back.

“Firms prove their technology works, then stall waiting for a contract, and by the time it arrives the investment, talent and production may have moved elsewhere. “The Government has a chance to fix that, and it doesn’t even need to wait for final decisions on defence spending to do so. “Clearer demand signals, a faster route from trials into contracts and finance at the right stage would give businesses the confidence to invest, scale and create jobs here.

“Get it right and defence spending becomes one of the UK’s strongest growth levers. Get it wrong and we risk paying to build capability overseas.” Advertisement Comment now