UK suppliers risk missing out on extra defence spending unless Government speeds up procurement, businesses warn

• Four in 10 businesses (41 per cent) say unclear defence contracts and procurement timelines could increase UK reliance on imported technology
• Nearly two-thirds (65 per cent) believe at least half of increased defence spending should go to businesses operating and investing in the UK
• Three in five (61 per cent) support a fast-track route from successful defence trials into government contracts
• Ahead of the Autumn Budget, Barclays is calling for clearer pipelines, better finance and a quicker route from trials to contracts, so defence spending builds UK capability

Increased defence spending risks benefiting overseas suppliers instead of building capability in the UK unless the Government gives businesses clearer long-term contracts and procurement timelines, according to new Barclays Business Prosperity research.

Four in 10 UK businesses (41 per cent) warn the country could become more reliant on imported defence technology without that clarity. The findings show that UK businesses back higher defence spending but have far less faith that the UK can turn it into domestic investment, manufacturing and jobs.

Nearly two-thirds of businesses (65 per cent) want at least half of increased defence spending to go to companies operating and investing in the UK. Without clearer procurement, more than a third (36 per cent) expect UK businesses to reduce or delay investment, and one in three (33 per cent) say defence technology firms could look overseas for investment instead.

Businesses also support reform. Three in five (61 per cent) back a dedicated route allowing technologies that successfully complete trials to move more quickly into government contracts, and just 8 per cent oppose it.

Certainty would unlock investment

Businesses say a clear, long-term pipeline of defence investment in the Budget would prompt action. A third (33 per cent) would invest in technology, equipment or production capacity, and 29 per cent would recruit or train more staff or bring more activity into the UK.

Access to finance remains a barrier, even for businesses that win work. More than a quarter (26 per cent) say they would not be confident they could fund the upfront costs of delivering a significant defence contract before being paid.

The findings reinforce Scaling UK Defence Tech report. The report recommends a permanent Defence Technology Accelerated Procurement Pathway, more growth-stage financing, and a defence-focused extension of the British Business Bank Growth Guarantee Scheme to improve access to working capital.

Matt Hammerstein, CEO, Barclays UK Corporate Bank, said: "UK businesses don’t lack the technology or the ambition to strengthen our defence base, but too often the system holds them back. Firms prove their technology works, then stall waiting for a contract, and by the time it arrives the investment, talent and production may have moved elsewhere.

“The Government has a chance to fix that, and it doesn’t even need to wait for final decisions on defence spending to do so. Clearer demand signals, a faster route from trials into contracts and finance at the right stage would give businesses the confidence to invest, scale and create jobs here. Get it right and defence spending becomes one of the UK’s strongest growth levers. Get it wrong and we risk paying to build capability overseas.”

Ends

Notes to Editors

The research was conducted by Focaldata on behalf of Barclays. It surveyed 1,036 UK business decision-makers, with fieldwork taking place between 24 and 29 September 2026. All figures have been rounded to the nearest whole percentage point. Respondents represented businesses of different sizes, sectors and UK regions, and all had primary or shared responsibility for financial decision-making.

Barclays’ Scaling UK Defence Tech report examines how the UK can convert its defence innovation base into economic growth, investment, exports and stronger national resilience. Its recommendations focus on clearer market and investor signals, better access to growth-stage and working-capital finance, and faster, more innovation-friendly procurement processes to help defence and dual-use technology businesses commercialise their innovations and scale in the UK.

Barclays Business Prosperity Fund

To support businesses to invest in resilience and growth, the Barclays Business Prosperity Fund is available for new and existing Business Banking customers and UK Corporate Banking clients across the UK to apply for lending and refinancing on existing projects. Businesses can find out more at: home.barclays/businessprosperity

£22bn is the total amount of lending Barclays has available to lend and support business growth among Business Banking and UK Corporate Banking clients in 2026. Subject to normal lending assessment, status and application. Terms and conditions apply.