New growth unit aims to help small UK businesses win defence contracts

The Ministry of Defence has launched a new unit aimed at increasing the role of British small businesses in defence procurement, as part of a wider push to raise spending with SMEs by £2.5 billion by 2028.

The Defence Office for Small Business Growth has been established to help small and medium-sized businesses bid for and win defence contracts, by simplifying procurement and boost spending with smaller suppliers.

The new team is set to be staffed by policy and commercial specialists and will focus on reversing the decline in SME spending highlighted in the Defence Industrial Strategy. Officials say the aim is to remove structural barriers while improving access to investment and increasing transparency across defence procurement.

Thousands of small defence businesses will be able to access tailored guidance from commercial experts through the new office.

The initiative forms part of a wider push to reverse a long-term decline in SME participation in defence procurement. The MoD currently spends around £5 billion a year with roughly 12,000 SMEs operating in the UK defence sector. Ministers now want to increase that figure by 50 per cent, equivalent to an additional £2.5 billion a year, by May 2028.

Ministers argue that increasing SME participation will strengthen supply-chain resilience and innovation, particularly as defence spending rises. The government has committed to increasing defence expenditure to 2.6 per cent of GDP by 2027, creating an opportunity to “rebalance” who benefits from that investment.

The MoD said the Defence Office for Small Business Growth would play a central role in ensuring that future increases in defence spending translate into more opportunities for smaller British businesses, rather than being captured primarily by large multinational contractors.

Further information can be found here: Digital MOD.UK

Please also see link to future information on UKDI here: UK Defence Innovation - GOV.UK