The government is launching a £20 million fund to offer “accelerated contracts” to UK start-ups which have done limited or no business with the Ministry of Defence (MOD).
Contracts will be awarded according to the requirements of the UK armed forces, led by UK Defence Innovation (UKDI). Technology and capability focuses including AI, machine learning and data science, robotics and autonomy and enhanced precision weapons.
The MOD will also run a “Dragons’ Den-style event” to provide seed funding for new and novel ideas at an earlier stage of development.
Defence secretary John Healey MP said:
“I am determined to make Britain the best place in the world to start and grow a defence business, and our military the fastest innovating in NATO.
“Backed by our record sustained increase in defence spending, we are delivering good jobs and growth across the UK by opening up new routes into the defence sector, giving small British-based businesses the jumpstart they deserve.
“If our entrepreneurs are willing to take chances, we must be willing to take them too. This is about a Britain that rewards risk takers and innovators and gives people the belief that this government will back them.”
UK SMEs saw £1.2 billion of direct investment from the MOD in 2024/25. The government has set an SME spend target of an additional £2.5 billion through to May 2028, taking total MOD spending with SMEs to £7.5 billion.
Earlier this week, it announced the new Defence Office for Small Business Growth (OfSBG) to support small and medium businesses to bid for and win more defence contracts.