By Sarah Young <\/p>\n
LONDON, June 29 (Reuters) – Britain’s nine-month delay in setting out its defence spending plans to meet a rising threat from Russia has forced some small suppliers to collapse, others to hold off investments and many more to expand abroad instead. <\/p>\n
Prime Minister Keir Starmer is finally expected to \u200cpublish the Defence Investment Plan on Tuesday, one of his final acts before he steps down in July, after his defence and finance departments spent months \u200carguing over how to fill an estimated \u00a328 billion shortfall. <\/p>\n
Many companies in the sector say that delay has damaged the UK’s military supply base and potentially the government’s efforts to make its cash-strapped forces war-ready. <\/p>\n
“We need the \u200bDIP to provide the confidence to private investors to scale investment,” said Shefali Sharma, chief executive of Oxford Dynamics, an AI defence company. “Currently its absence is costing businesses.” <\/p>\n
As they wait, contract awards from Britain’s Ministry of Defence have dried up and even small procurements are taking longer than usual, pushing British defence companies to focus on winning business overseas and meaning the UK is losing out on jobs and investment. <\/p>\n
Dozens of smaller companies have gone out of business, or shut down their defence units to focus on other industries as a result, the defence \u200clobby group ADS told Reuters. <\/p>\n
The chief executive of UK defence company \u2060Cohort said that over the last 18 months demand from militaries in other countries where it works, such as Germany, Poland, the Nordics and Baltics, has been clearly ramping up, in contrast to Britain. <\/p>\n
“Because of the lack of defence investment plan, it’s really difficult for the \u2060MOD to contract new programmes,” CEO Andrew Thomis said, adding that procurement which had been expected in the UK has not yet come through. <\/p>\n
Cohort, which is a parent group of seven different defence-related companies, said that while its total revenue is expected to grow 12% in the last financial year, the UK’s share fell below 50%, having stood at 80% just a few years ago. <\/p>\n
UK \u200bLOSING \u200bOUT ON MANUFACTURING INVESTMENT <\/p>\n
Britain’s dithering at a time when other countries are awarding contracts has hurt domestic \u200bproduction. <\/p>\n
Q5D, an early-stage company based near Bristol in south west England \u200cwhich has automated the manufacturing of the wiring used in drones and other equipment, has won contracts with the U.S. Army, but not in the UK, making the U.S. the more likely site for a new factory. <\/p>\n
“I would love to build one here … but given all our sales are actually in the U.S. it makes more sense to do that,” CEO Stephen Bennington said. <\/p>\n
“I think there’s very little point in us investing and looking at the MOD just at the moment until they sort themselves out.” <\/p>\n
Similarly, one of Cohort’s British-based companies, SEA, has set up a facility in Canada to make torpedo launch systems because that is where the demand is. <\/p>\n
“The pace of these things overseas does seem to \u200cbe faster,” Thomis said. <\/p>\n
For AI defence company Oxford Dynamics, which employs about 45 people, and whose technology \u200bis already being used on MOD infrastructure, the delay to the DIP has stopped it from pushing ahead \u200bat speed, because of a lack of clarity. <\/p>\n
“We believe the DIP will allow \u200bus to narrow our focus…to then go all in on whatever capabilities are required,” CEO Sharma said, explaining that the company is waiting \u200cfor a steer of exactly what the MOD wants. <\/p>\n
Without the demand \u200bsignal provided by the DIP, some start-ups have \u200bcollapsed. One example is Aeralis, which had designed a modular jet it hoped might compete to replace Britain’s fleet of Hawk trainer jets, but which entered administration in May. <\/p>\n
During the delay, the one area of demand that has held up comes from Britain’s involvement in helping Ukraine on a range of technologies. <\/p>\n
“It’s been (Britain’s) support \u200binto Ukraine that has been driving the innovation in this \u200cspace, and the pace of innovation readiness,” said Rob Merryweather, BAE Systems’ group technology director, referring to next-generation navigation systems. <\/p>\n
A British project to develop a low-cost \u200badvanced long-range strike weapon for Ukraine has also moved at speed since February 2025, with the prototypes tested within months, and three companies now working \u200bon a \u00a345 million development contract. <\/p>\n
(Reporting by Sarah Young; Editing by Kate Holton and William Maclean) <\/p>\n","protected":false},"excerpt":{"rendered":"By Sarah Young LONDON, June 29 (Reuters) – Britain’s nine-month delay in setting out its defence spending plans…\n","protected":false},"author":2,"featured_media":1219,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[831,830,833,14,47,834,835,832,829],"class_list":["post-1218","post","type-post","status-publish","format-standard","has-post-thumbnail","category-news","tag-britain","tag-defence-companies","tag-defence-company","tag-defence-industry","tag-defence-spending","tag-nine-month-delay","tag-oxford-dynamics","tag-prime-minister-keir-starmer","tag-shefali-sharma"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/defence\/wp-json\/wp\/v2\/posts\/1218","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/defence\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/defence\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/defence\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/defence\/wp-json\/wp\/v2\/comments?post=1218"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/defence\/wp-json\/wp\/v2\/posts\/1218\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/defence\/wp-json\/wp\/v2\/media\/1219"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/defence\/wp-json\/wp\/v2\/media?parent=1218"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/defence\/wp-json\/wp\/v2\/categories?post=1218"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/defence\/wp-json\/wp\/v2\/tags?post=1218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}