To ask the Secretary of State for Defence, whether his Department plans to expand its procurement activities to UK Small and Medium Sized Enterprises.
Answered on
1 April 2025
Small and Medium Enterprises (SMEs) make a vital contribution to economic growth and are a valuable source of technical innovation in defence. This is recognised in the Defence Industrial Strategy Statement of Intent, and the governments National Procurement Policy Statement.
As announced in the Spring Statement, with defence spending rising, we will spend a minimum of 10% of the Ministry of Defence’s equipment budget on novel technologies, including drones and AI enabled technology. We will establish a protected budget of £400 million within the Ministry of Defence, that will rise over time for UK Defence Innovation.
This is in addition to the announcement the Prime Minister and Defence Secretary made on 3 March which included the launch of a new hub to provide SMEs with better access to the defence supply chain. We have committed to set a direct SME spending target for the Ministry of Defence by June this year, increasing our spend with them and ensuring that thousands of small businesses in the UK will benefit from the historic decision to increase defence spending to 2.5% of GDP.