LONDON — Britain’s prolonged delay in publishing its Defence Investment Plan has placed mounting pressure on the country’s defence industry, with companies warning that months of uncertainty have forced some suppliers into insolvency, delayed investment decisions and encouraged businesses to expand overseas instead of growing domestically.
Prime Minister Keir Starmer is expected to unveil the long-awaited strategy on Tuesday, one of his final major policy announcements before stepping down in July. The plan has been delayed for roughly nine months while Britain’s defence and finance ministries negotiated how to address an estimated £28 billion ($38 billion) funding gap as the government seeks to strengthen military capabilities in response to growing security threats from Russia.
Industry leaders say the prolonged uncertainty has weakened Britain’s defence industrial base at a time when European allies are accelerating military spending and procurement programs.
Companies across the sector report that contract awards from the Ministry of Defence have slowed significantly, while even relatively small procurement projects have taken longer than expected to receive approval. The delays have prompted many firms to focus increasingly on overseas opportunities, redirecting investment and production capacity away from Britain.
According to defence industry association ADS, dozens of smaller companies have either ceased operations entirely or abandoned defence-related activities in favor of more stable commercial markets during the period of uncertainty.
Oxford Dynamics Chief Executive Shefali Sharma said the Defence Investment Plan is needed to provide confidence for private investors and enable companies to scale production in line with future military requirements.
Without clear guidance from the government, businesses remain uncertain about which technologies and capabilities will receive long-term support, making it difficult to commit additional capital or expand manufacturing.
Andrew Thomis, chief executive of defence technology group Cohort, said military demand has increased rapidly across several European countries, including Germany, Poland and the Baltic states, while Britain’s procurement process has remained largely stalled.
He said the absence of the Defence Investment Plan has made it difficult for the Ministry of Defence to launch new programs, leaving expected procurement projects delayed.
Cohort, which owns seven defence-related businesses, expects annual revenue growth of around 12%, but the United Kingdom now accounts for less than half of its business, compared with roughly 80% only a few years ago.
The slowdown has also influenced where companies choose to build new manufacturing facilities.
Q5D, a technology company near Bristol that automates wiring production for drones and military equipment, has secured contracts with the U.S. Army but none from Britain’s defence ministry. Chief Executive Stephen Bennington said that reality makes the United States a more attractive location for the company’s next factory despite its preference to expand domestically.
He said there is little incentive to prioritize British defence projects until procurement uncertainty is resolved.
Similarly, Cohort subsidiary SEA has established production capacity in Canada to manufacture torpedo launch systems, reflecting stronger demand outside Britain.
Thomis said procurement decisions in overseas markets have generally moved much faster than those in the United Kingdom.
For Oxford Dynamics, whose artificial intelligence technology is already deployed on Ministry of Defence infrastructure, Sharma said the lack of strategic direction has prevented the company from fully committing resources to future development.
She said the company needs a clearer indication of the specific capabilities the ministry intends to prioritize before making major investment decisions.
The prolonged delay has already contributed to casualties among emerging defence businesses.
One notable example is British aerospace startup Aeralis, which entered administration in May after developing a modular military jet intended to compete for Britain’s future trainer aircraft program.
Despite the broader slowdown, companies said one area has continued to generate demand: Britain’s military assistance to Ukraine.
BAE Systems Group Technology Director Rob Merryweather said support for Ukraine has accelerated innovation across several defence technologies, particularly next-generation navigation systems and advanced battlefield capabilities.
One example is Britain’s program to develop a low-cost, long-range strike weapon for Ukraine, which has progressed rapidly since early 2025. Prototype systems were tested within months, and three companies are now participating in a £45 million government-funded development program.
Industry executives argue that similar urgency is needed across Britain’s wider defence procurement system if the government hopes to rebuild military readiness while maintaining a competitive domestic defence manufacturing sector.
They say publication of the Defence Investment Plan could provide the certainty companies have awaited for months, allowing investment decisions, production expansion and research programs to move forward after an extended period of policy uncertainty.
