Recommendation 4

We welcome the MOD’s high level of spending with Scottish industry (around 10% of total spending with industry) but are concerned that this spending is very heavily skewed towards major international prime contractors rather than SMEs. This is illustrated by the fact that only 2.5% of the MOD’s spending with UK SMEs goes to Scottish businesses. While this figure is higher than the MOD’s spending with SMEs in the North West of England, Wales and Northern Ireland, it is far lower than both the UK average and Scotland’s population share of the UK. Scottish SMEs have the skills and ambition to match any other part of the UK yet are losing out. While the MOD’s SME Action Plan is timely and relevant, it is unlikely to tackle engrained hesitancy within the defence sector towards working with Scottish SMEs.