The Changing Face of UK Defence and Security

Introduction

On 2 June 2025, the UK Government unveiled its 2025 Strategic Defence Review titled the “Plan for Change for Defence” (the “2025 SDR”), heralding it as the dawn of a new era in British defence and security. Hailed as a landmark by the Prime Minister, the 2025 SDR underscores the urgent need to address daily cyber threats and embrace the rapid evolution of technology that is reshaping the battlefield. It also emphasises both the necessity of and the opportunities that this approach affords to create a new partnership with industry and radically reform procurement, leading to the creation of a “defence dividend” of jobs, wealth and opportunity throughout the UK.

Defence is now seen by the UK Government as critical to both national security and economic growth. The 2025 SDR marks a shift in narrative from previous reviews, with a pronounced focus on technological advancements, which could offer substantial opportunities for vendors. However, navigating this space requires careful consideration of the complexities involved in contracting.

A New Era of Deterrence and Defence

The 2025 SDR stresses how traditional warfare and national security processes are being transformed, prompting a revolutionary approach to UK defence strategy. As noted by the Secretary of State for Defence, the Government’s plan is to prioritise warfighting readiness to deter threats and strengthen security in the Euro-Atlantic, which will be achieved by the UK taking the lead within NATO and assuming greater responsibility for European security.

The Government has also drawn insights from the war in Ukraine, noting the increased reliance on data, digital warfare and drones, with the Secretary of State noting that “a nation’s Armed Forces are only as strong as the industry, innovators and investors that stand behind them. And that technological innovation is vital to stay ahead of our adversaries.”

The 2025 SDR looks to overhaul UK defence policy, with large scale reform and investment aiming to modernise and innovate. It makes 62 recommendations (all of which have been accepted by the Government according to the 2025 SDR). Some key technology-focused recommendations include:

• The implementation of rapid innovations, including the increased use of drones of various kinds, artificial intelligence, (“AI”) systems and various autonomous platforms and other arrangements, alongside a “20-40-40” warfare model (which includes 20% crewed platforms to control 40% reusable platforms, (such as drones that survive repeated missions) and 40% “consumables” (e.g., rockets, shells and missiles));
• The creation of a new “CyberEM Command” in respect of offensive and defensive cyberspace operations and electromagnetic warfare. This will ensure domain coherence, but will not be responsible for executing military action across cyberspace and the electromagnetic spectrum (responsibility for executing offensive cyber operations will remain with the National Cyber Force, created in 2020);
• The deployment of a “digital targeting web” by 2027, requiring access, wholly or partly, to a Defence-wide “Secret Cloud” (a secure, scalable platform for sharing and storing classified secret information), with a minimum viable product available in 2026. The digital targeting web would connect “sensors”, “deciders” and “effectors”, creating choice and speed in deciding how to degrade or destroy an identified target across domains and in a contested cyber and electro-magnetic domain. This should enable machine-speed targeting and cross domain lethality;
• The establishment of a new UK Defence Innovation organisation to promote the use of dual-use technologies and commercial innovation, which will have a £400 million annual budget; and
• The standing up of a new Defence Uncrewed Systems Centre (to be established by February 2026) and a protected Defence AI Investment Fund to speed up the use of AI across the defence sector, with a focus on the most positive usage scenarios.

There are also a number of commitments on procurement strategies and international partnerships, potentially opening more doors to suppliers (see further details below).

The 2025 SDR thus marks a significant change in the operational approach of the UK armed forces, emphasising cyber threats, investment in innovation, and cutting-edge technologies.

Contracting and Procurement

With increased spending on defence predicted to be 2.5% of GDP by 2027 and 3% in the next Parliament (fiscal and economic conditions permitting), the 2025 SDR’s vision is not only for war readiness, but prosperity and jobs across the UK – in particular with more efficient innovation and procurement taking months, rather than years.

As part of this, the 2025 SDR includes various commitments which relate to overhauling acquisition processes including:

• The establishment of a new Defence Exports Office within the Ministry of Defence, which is aimed at promoting UK defence exports to allies and growth at home, as well as strategic industrial partnerships;
• Plans to overhaul acquisition processes from top to bottom as part of a new partnership with industries;
• A new segmented procurement approach to contracting time frames, as follows: (i) major modular platforms – contracting within two years; (ii) pace-setting spiral and modular upgrades - contracting within a year; and (iii) rapid commercial exploitation – contracting within three months (with at least 10% of the Ministry of Defence’s equipment procurement budget being spent on novel technologies each year);
• Early engagement in procurement processes with industries on desired outcomes; and
• Rewarding of productivity and risk taking by suppliers.

Clearly, the 2025 SDR presents promising opportunities for vendors and suppliers, particularly in light of the various procurement-related commitments.

The extent to which such opportunities will materialise in practice, however, remains to be seen. Organisations that contract with the Ministry of Defence are well acquainted with the intricacies of procurement processes, which can often involve lengthy and complex onboarding phases.

Once projects commence, vendors can encounter unforeseen practical challenges, which can necessitate changes in the process. Managing contractual changes becomes a crucial task which involves ensuring that contracts remain aligned with procurement requirements while being mindful of budgetary constraints. The 2025 SDR also highlights the necessity for technologies to swiftly adapt to evolving threats, further complicating matters in these projects.

Suppliers will need to establish clear change management processes, maintain transparent communication with stakeholders, build in flexibility, and proactively develop risk mitigation strategies. Additionally, consulting advisors for assistance in effecting intricate contractual changes will be vital to navigate these complexities effectively.

Across the Pond

Adding another layer to these complexities is the international landscape, which reflects similar developments. For example, on 6 June 2025, the United States signed an Executive Order entitled “Sustaining Select Efforts to Strengthen the Nation’s Cybersecurity and Amending Executive Order 13694 and Executive Order 14144”, (the “EO”). which amends previous guidance on cybersecurity, artificial intelligence, and software developments.

The EO highlights, and is an example of, global movement on cybersecurity measures. Such international developments can impact upon the interconnected nature of defence strategies and reinforce the need for vendors to remain agile and responsive to both domestic and global policy shifts.

Conclusions and Commentary

The 2025 SDR marks a significant shift in UK defence strategy that will likely have a lasting impact, regardless of any change in the UK Government. Key commitments set out in the 2025 SDR highlight the importance of technology in contemporary warfare. For suppliers, realising the opportunities that this new direction presents may involve navigating complex procurement and contractual challenges. Vendors should focus on effective change management and maintaining flexibility to meet evolving threats and requirements. International developments may also impact upon UK defence strategies, requiring vendors to stay agile and responsive. Whilst the 2025 SDR presents significant opportunities, its success depends on adept implementation of procurement strategies and adaptability in the face of rapid technological changes.