Recommendation 4

The Department’s delay in publishing the Defence Investment Plan risks weakening the UK’s defence industrial base. The Department currently spends 85% of its budget in the UK, a proportion that it hopes to maintain or expand as defence spending increases. This amount of spending means that the Department can be an important element of the UK’s wider industrial strategy. If done right, the Department could provide a considerable stimulus for growth into the UK economy, including investment in infrastructure and skilled jobs throughout the country. The goal is not just to service the domestic market, but also to benefit from the expanding export market for defence equipment. The UK’s ongoing support for Ukraine underlines the UK defence industry’s potential for swift action and technological innovation, particularly amongst small and medium- sized enterprises. The Defence Investment Plan was intended to provide the UK’s defence industry with certainty and give a clear demand signal, thereby encouraging businesses to invest long-term in their capacity and capabilities. Its ongoing absence undermines these aims, with smaller companies suffering more than their larger counterparts. recommendation The Department should write to the Committee urgently, within two weeks of this report, to explain how it is mitigating the impact on suppliers of the delayed publication of its investment plan.