BELFAST — Senior executives from British industry trade associations warned today that the UK Ministry of Defence’s delay to publication of its 10-year investment plan is wrecking havoc across local supply chains.
Some small-to-medium enterprises (SME’s) have been forced to exit the field altogether; while others dangerously burn through cash, wait to receive outstanding MoD payments or rely on financial handouts from prime manufacturers to bail them out of cash flow hardship, the executives told the UK defense committee.
“The problem for the SMEs is they’re desperately trying to hang on to their people and keep their factories … alive,” said Andrew Kinniburgh, director-general at Make UK Defence, which serves over 850 British defense suppliers. “The trouble for them is they’re just bleeding cash. There’s cash out the door every day.”
The UK government initially vowed to publish the Defence Investment Plan (DIP) in the fall of 2025, but that deadline came and went without an official update on timing. Months later, a MoD spokesperson only told Breaking Defense today, “We are working flat out to finalise the Defence Investment Plan and will publish it as soon as possible.”
In the meantime, the spokesperson said the ministry is “getting on with the job of ensuring defence is an engine of growth by backing British jobs, British industry and British innovation.” The spokesperson pointed to a new ministry office dedicated to small businesses, and said the MoD has committed to spending £2.5 billion ($3.34 billion) with SMEs by May 2028.
But while officials have not explained the cause of delay, reports and analyst commentary have routinely focused on significant financial troubles linked to a multibillion dollar deficit between planned defense spending and long-term investment costs.
The DIP delay has led to procurement “paralysis,” producing “even more of a feast and famine-type environment,” said Samira Braund, defence director at ADS, a trade body representing over 1,800 companies across local aerospace, defense, security and space industries.
“We have got some of our large defense primes who are supporting their SMEs … [suffering] from a cashflow problem. We have got SMEs that have had to exit the sector,” she added. “We’ve got SMEs that are outstanding payments from the MoD and in essence … the ecosystem that we’re in is, where it’s not in a great place.”
Braund outlined that the ongoing Middle East conflict, which has led to the UK prioritizing Eastern Mediterranean and regional defenses, will likely have “challenged” planning assumptions within the DIP.
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“The real impact that is being seen from the [ADS] membership base is … if you look at the large defense primes, they are not getting contracts,” she argued. “Therefore they can’t flow contracts down through their system into their supply chain.” Braund also said that ADS had “no visibility” over the contract values of 1,200 high-profile British defense deals, inked since the summer of 2024.
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The UK MoD spokesperson told Breaking Defense that from July 2024, “we have signed almost 1,200 major contracts, worth more than £28 billion, ($37.4 billion) with 93% of that spend going to British-based businesses.”
Although Braund welcomed the decision earlier this month to award Leonardo UK a £1 billion New Medium Helicopter contract covering production of 23 AW149 multirole rotorcraft, Kinniburgh said the “dithering that went on” prior to belatedly announcing the order was “incredible.” As Breaking Defense previously reported, the procurement was in doubt for months, leaving Leonardo’s Yeovil, England production site facing uncertainty.
Doubt, Braund said, could be a bigger problem. With the delay, she said the government could be “playing out” a reality where investors perceive the MoD as a “difficult customer” to work with. The hold up has also put ADS work at risk with respect to developing better access to finances for suppliers and advocating for defense as an ethical sector for investment, Braund added. And despite the initiatives cited by the MoD spokesperson, Braund argued that the UK MoD did not put in place any mitigation solutions to lessen the impact of the delay.
Kinniburgh’s concerns largely focused on long-term problems arising from the issue, as he explained the hold up will see costs “rocket,” and the UK’s position in a “global race” to secure contracts with big defense primes could be jeopardized.
“Major manufacturers have many options,” he noted. “They can go and invest in Germany or in Poland or in the US.” As the UK prevaricates on the defense investment plan, “we are basically telling those companies, perhaps you should invest somewhere else.”
According to Fred Sugden, associate director for defence and national Security at techUK, more immediate problems are taking hold. He said that because some “critical components” are subject to daily price increases, non-defense companies are “swallowing up” supplies, which in turn drives up costs for defense programs that have been put on hold.
Sugden also told lawmakers that despite dual-use technology firms holding a “certain level of interest” in pursuing UK defense business opportunities, their stance appears “time limited.”
“If things don’t kind of move forward in a positive way, we will start to see some of these dual-use or technology companies that might have considered moving into the market deciding, you know what, it’s just easier to go and work in another industry where we just don’t have all these hurdles,” he said.
Corrected 3/25/2026 at 08:34 am ET: The original version of this story incorrectly listed Make UK Defence’s membership base. That number has been updated to reflect the correct figure.