Overview

Defense cooperation between the U.S. and the UK is well established, and the UK is considered a Tier one partner. As such, the UK has significant military capability and seeks to augment its current capability with the latest technology available. Most technology, if acquired from the U.S., requires an ITAR license, and new suppliers need to be familiar with the licensing application process. 

In 2021/22, the UK spent $58.5 billion on defense and this was $4.6 billion higher than the previous year. The Spring Budget 2023 allocated an additional $6.4 billion to defense spending over the next two years (2023/24 and 2024/25), and a further $2.5 billion per year in subsequent years up to 2027/28. This increases defense spending by a total of $14 billion over this five-year period.

The UK is one of the top NATO countries in terms of defense spending. The UK is committed to spending 2% of GDP on defense each year. It was one of just nine of NATO member countries to have met this target in 2022, spending 2.1% of GDP on defense. As part of the Integrated Review Refresh 2023, which sets out the UK Government’s national security and international policy, the Prime Minister set out a longer-term ambition to increase defense spending to 2.5% of GDP but no timeframe has been given for achieving this goal.

The Government of the UK has informed through its “Green Book” that all public money awarded to suppliers needs to demonstrate “Social Value,” the net value added to the UK society and economy. Social Value accounts for 10% of the score, rising to 25% at the contacting officer’s discretion, when contracts are evaluated and all U.S. suppliers competing for defense contracts need to demonstrate Social Value to remain competitive.

Leading Sub-Sectors

The UK MOD has highlighted the following areas:

Naval

Navy Command is responsible for the procurement and support of surface warships, auxiliaries and maritime helicopters, as well as elements of submarine support, although the major submarine build programs are the responsibility of the Defence Nuclear Organisation. Navy Command plan to spend $52 billion in the Equipment Plan over the next ten years as follows:

• Production of eight Type 26 frigates and five Type 31 General Purpose Frigates and Type 32 multi-role frigates
• Development of a Type 83 destroyer to replace the Type 45
• $277 million for the Royal Marines to evolve from their standby amphibious infantry role into a forward-based, highly capable maritime “Future Commando Force”

Ground Forces

At the end of December 2022, the full-time trained strength of the army was 75,710. This was 2.2% smaller compared with the previous year. The Ministry of Defence’s command paper ‘Defence in a competitive age’ had confirmed that the full-time trained strength of the army would be reduced to 72,500 by 2025. The ‘National security strategy and strategic defence and security review 2015’ had set the strength of the army at 82,000. The British Army will reorganize into seven brigade combat teams comprised of two heavy brigades, one deep strike brigade, one air maneuver brigade, and two light brigades, plus one Combat Aviation Brigade.

Army Command is responsible for: armored fighting vehicles; ground-based air defense; artillery systems; protected and support vehicles; battlefield helicopters; certain unmanned air systems; soldier fighting systems; and communications and information systems in the land environment.

Army Command plan to spend $51.5 billion in the Equipment Plan over the next ten years as follows:

• $30 billion for a modernized long precision fire, multiple launched rocket systems; new air defenses; tactical surveillance drones, new electronic warfare, and cyberspace capabilities
• Creation of a Ranger regiment and Security Force Assistance Brigade
• Acquiring fleet of 50 AH-64 Apache helicopters, with a scheduled final delivery date of 2024
• Purchased 14 MH-47 Chinook helicopters for the UK Special Operations Force
• Beginning recapitalization efforts of their MLRS platform, with initial deliveries set for 2024

Air

The Royal Air Force is responsible for Combat Air, including fast jets and weapons; Intelligence Surveillance and Reconnaissance (ISR), including large ISR aircraft, remotely piloted aircraft and their enablers; strategic and tactical air transport; air-to-air refueling aircraft; air platform protection; training aircraft; and training systems, including synthetics such as augmented and virtual reality. Air Command plan to spend $44.6 billion in the Equipment Plan over the next ten years as follows:

• Investing $2.77 billion for Future Combat Air System (i.e., Tempest Program)
• Retiring E-3D Sentry in 2021, replacing with three E7 Wedgetails by 2023
• Committed to purchasing additional 26 F-35s bringing the total ordered to 74
• Retiring C-130 Hercules in 2023 and replacing with 22 A400s
• Replacing the 9 MQ-9A Reapers with 16 MQ-9B Protectors by 2024 and investing in swarming drone technology

UK Strategic Command

UK Strategic Command is responsible for command, control, communications, computers, intelligence, surveillance, targeting, acquisition and reconnaissance systems and capabilities (C4ISTAR) in both operational and business environments; special projects including procurement for UK Special Forces and Joint Force Protection capabilities; pan-Defence logistics systems; capabilities to support Defence operations and activities; and medical capabilities. Strategic Command plan to spend $46 billion in the Equipment Plan over the next ten years as follows:

• Investing $7 billion in Skynet-6 military communication satellite program
• $1.9 billion for a National Space Operations Centre, a Space Command, a Space Academy, an Intelligence, Surveillance and Reconnaissance satellite constellation, and for space domain awareness capabilities
• Investing in a UK space launch capability (both horizontal and vertical)
• Increasing cyber capabilities and creating the National Cyber Force, a dedicated career path for cyber specialists
• $9 billion in Research and Development over the next four years
• $415 million for research at Weapons Science and Technology Centre for novel weapons

Opportunities

The UK defense industry is sophisticated and mature. Defense suppliers looking to export to the UK can expect to find a highly competitive environment and must demonstrate a clear competitive advantage. A company with non-British ownership or without a presence in the UK is not necessarily at a competitive disadvantage compared with British firms seeking MOD business. However, a U.S. company must commit both time and resources to enter or expand within the UK defense market. Selling through an established UK company is the least risky market entry strategy for most U.S. defense providers to enter the UK defense supply chain.

Through the Defense and Security Accelerator, the MOD frequently holds industry engagement days and competitions to evaluate equipment and technology. The best way for U.S. companies desiring to engage in meaningful dialogue with the MOD is through these MOD-sponsored industry days and competitions. For announcements on MOD events relevant to a particular defense sector, suppliers should consistently monitor announcements on the Defense and Security Accelerator website.

Resources

Defense Sourcing Portal

The MOD’s Defense Sourcing Portal (DSP) is the official source of UK MOD contracts, providing instant access to all contract opportunities in one place. You can contact DSP at customersupport@jaggaer.com.

Defense Science and Technology Laboratory

The Defense Science and Technology Laboratory (Dstl) ensures that innovative science and technology contribute to the defense and security of the UK. To contact Dstl, send an email to centralenquiries@dstl.gov.uk or call +44 198 095 0000.

Defense and Security Accelerator

The Defense and Security Accelerator (DASA) finds and funds exploitable innovation to support defense and security quickly and effectively. Its mission is for the UK to maintain its strategic advantage over its adversaries through the most innovative defense and security capabilities in the world.

For further information, please contact:

PJ Menner, Commercial Specialist, U.S. Commercial Service, Tel: +44 (0)20 7891 3470