Industry and Government must work together to enable investment in UK security
Published 19th February 2026
In this increasingly uncertain world, the prospect of widespread international conflict is no longer remote. As the Defence Secretary has said, we are moving from a post-war to a pre-war world. Against the backdrop of deepening geopolitical tensions and increased threats to NATO allies, the need to bolster the UK’s hard power has rarely been more pressing.
The prime minister has pledged to spend 5% of GDP on national security by 2035 in a move widely welcomed by many. Nevertheless, critics have cited the delay in publication of the Defence Investment Plan as raising fresh doubts as to whether the urgency of the situation, explicitly and forcefully articulated in the government’s Strategic Defence Review, will be matched with the necessary action. Against that background it was pleasing to see recent reports that the planned increase in UK defence expenditure will be accelerated, potentially reaching 3% of GDP by 2029.
Industrial capability, complementing and supporting our armed forces, will be integral to the UK’s future ability to deter and, if necessary, to defend against threats with effective and resilient combat power. UK defence firms have been developing ambitious strategies to meet the requirements of the Strategic Defence Review. We are now looking forward to seeing the UK’s Defence Investment Plan, setting out the timing and resources that will be devoted to putting the SDR’s conclusions into practice.
The need for clarity
Defence manufacturers occasionally look with envy at FMCG businesses where demand depends on the aggregated decisions of many consumers – in the case of some, like Apple, literally billions of individuals. It is vital for defence manufacturers to understand our critical customers’ plans, particularly when looking ahead to investments in new factories, manufacturing lines and scaling the workforce.
That doesn’t mean that governments must make irrevocable promises of long-term revenue flows in order to ensure future defence industrial capability. It is perfectly possible to contract for design work, for low-volume production, or for ready manufacturing capability, at relatively modest levels of expenditure, without immediate commitment to volume production.
It’s also not true that industry refuses to invest without contractual guarantees. For instance, the international trend towards the hybrid navy concept, where capable warships are supplemented by a fleet of uncrewed surface and sub-surface vessels is clear. The Royal Navy’s developing Atlantic Bastion concept is a good example. In response, Cohort has invested in the upgrade of SEA’s manufacturing facility in Barnstaple. That investment will support the volume production of KraitSense, a passive thin-line towed array sonar ideally suited to use with uncrewed vessels: lightweight, low drag, low power, highly sensitive and operationally proven. The enhanced facility will also help meet increased demand for SEA’s Ancilia surface ship missile defence product, as well as creating skilled jobs and career opportunities within North Devon.
But that is a relatively modest commitment based on commercial judgement and solid interest from multiple customers. Larger strategic investments do require an anchor customer commitment. For instance, it was the award of the contract for ELAC SONAR to supply submarine sonar systems for the Italian Navy’s new submarine fleet that underpinned Cohort’s decision to build a new factory in Kiel. This state-of-the art manufacturing facility, an investment of over £20m, will enable ELAC to deliver sonar systems under its €100m Italian contract with sufficient capacity to take on new major production activities alongside.
While investment plans are still being formulated, what is clear is that greater certainty and a firm commitment on defence spending plans will be essential to give industry manufacturers the confidence they need to make the significant investments that are urgently needed to protect the UK and its allies.
There are encouraging signs that the government recognises the need to move faster. Reports suggest the Prime Minister is considering bringing forward the 3% of GDP target to the current parliament. If confirmed, this would be welcome, and so too would be, the publication of the Defence Investment Plan. An accelerated spending commitment without a clear plan for how and where that money will be invested risks compounding the uncertainty industry already faces.
The need to catch up
The most recent military expenditure figures from SIPRI show the scale of the challenge. In 2024, the US spent 3.42% of gross domestic product (GDP) on defence, compared with 2.28% in the UK – following a long-term decline from almost 11% in 1953.
There are signs the picture is improving. UK defence spending has risen since the record low of the post- World War two era (2018 - 1.94%). Added to this are procurement process reforms designed to reduce waste, add speed, and focus more resources on small and medium-sized businesses. Luke Pollard, the minister for defence readiness and industry has expressed confidence that defence acquisition can be accelerated – giving the examples that large contracts that took on average five years to award would soon take two years, and those taking a year would be cut to just a few months.
However, there is more work to do. Poland spent 4.15% of GDP on its military in 2024, while Germany is spending more on military equipment than ever before. Much of Europe is moving beyond statements of intent to investment in capability. These are not small commitments, at a time of competing demands on economies that are far from robust. In these days of long-range ballistic and cruise missiles, the UK should not persuade itself that it is less vulnerable than its neighbours. And, to put the point at its most brutal, as they invest in reducing their vulnerability, we become a relatively more attractive target.
The UK is still seen as the home one of the continent’s most capable defence industries, and a welcome partner in international collaborative projects. But purposeful investment elsewhere, potentially compounded by delays at home, risk undermining our hard-won reputation as a leading player in the global defence landscape. There are many vital lessons to be learned from the Ukraine conflict. One of the most important is that domestic industrial capacity and resilience are necessary building blocks for long-term security.
Rising to the challenge
Across the Cohort Group we’re focusing on developing innovative capabilities that meet the demands of the UK MOD and allies – from SEA’s anti-ship missile defence system, Ancilia, to ELAC SONAR’s Sphere solution for underwater C4ISR. Our approach reflects how much of the UK defence industry is responding today - maintaining momentum, advancing technology and seeking export opportunities. Mid-size companies like those that make up the Cohort Group are well placed to make a rapid contribution to UK defence capacity. Our expertise, practicality and dynamism give us the ability to create innovative technology and scale up rapidly.
The UK is approaching a critical juncture. In many cases it may be right and proper to subject public investments to extended analysis, especially when these may take years to realise and will affect capability for decades. But that is not where we are. We don’t have those decades, and possibly not even those years. And the deep, expert and searching analysis that has gone into the Strategic Defence Review has made it clear what needs to be done. It is the time for action. We and the wider industry are ready to invest, scale and support the ambitions of the Strategic Defence Review. We welcome the government’s commitment to increased spending and look forward to seeing the vitally important Defence Investment Plan.
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