New Defence Growth Deals Created to Boost Local Economies Under Major Sector Plan

Working families across the country will be provided opportunities through the Defence Industrial Strategy, from highly skilled engineering positions to apprenticeships for young people starting their careers, ensuring that the defence dividend is felt in communities from Cornwall to the Highlands. 

Defence Secretary John Healey has launched the Defence Industrial Strategy (DIS) during a visit to defence technology firm Rowden in Bristol, where he also opened the firm’s new facility. Veteran-founded firm Rowden produces critical sensing and decision-making capabilities for the Armed Forces, and significant growth in recent years means they now have an engineering and production footprint of more than 20,000 sq ft in Bristol.

Central to the DIS, local economies will be boosted through the launch of a £250 million fund for Defence Growth Deals, aimed at improving collaboration, fostering innovation and creating jobs in areas with untapped potential.

Five initial Defence Growth Deals will be created across England, Scotland, Wales, and Northern Ireland. Building on the success of the Team Barrow approach at the home of nuclear submarine building in Barrow-in-Furness, Defence Growth Deals will identify areas with high growth potential, and bring together industry, local and national government and academia to make sure that potential is realised.  

Each Defence Growth Deal will combine defence and wider government investment to harness local sub-sector strengths, drive innovation, and deliver tailored support where needed, such as in skills, housing, and planning, to boost local economies, attract private investment, and ensure long-term sustainability.  

Initial ADS analysis indicates there could be an additional demand of up to 50,000 defence jobs by 2034/35 with increases in defence spending. Defence Growth Deals will play an important role in capitalising on that skilled employment potential for communities across the UK. 

The five deals will be backed by a total of £250 million of defence spending over the next five years, underpinned by this Government’s historic increase in defence spending to 2.6% of GDP by 2027 and the ambition to hit 3% in the next Parliament.  

They will forge long-term partnerships between national, devolved and local government, uniting businesses and research institutions to harness local expertise and resources in defence and the dual-use sectors. They will support the UK Armed Forces and deliver benefits for working people through the government’s Plan for Change. 

Defence Secretary, John Healey MP said:

"The Defence Industrial Strategy will make defence an engine for growth across the UK, backing British jobs, British industry and British innovators. 

Defence Growth Deals offer a new partnership with UK Defence to build on industrial and innovation strengths that regions already hold. Together we aim to drive an increase in defence skills, SMEs and jobs across all four nations. 

We want to make the UK the best place in the world to start and grow a defence firm and will put Britain at the leading edge of innovation."

Chancellor Rachel Reeves said: 

"This is a plan for good jobs paying decent wages in Cardiff, Belfast, Glasgow, Sheffield, Plymouth and beyond. 

Through Defence Growth Deals we will unleash the power of local economies while securing our country - building an economy that works for working people, in every part of this country, just as our Plan for Change promised."

Innovation and industrial power are central to deterrence and decisive factors in war. The conflict in Ukraine provides a stark reminder of the imperative of the necessity for fast replenishment and resupply by industry, and a rapid, continual cycle of innovation between industry and the front line. 

The first Defence Growth Deals will be in:

• Plymouth – Home to the largest naval base in Western Europe, which will see £4 billion of investment over a 10-year period, the city has recently been designated as the national centre for marine autonomy to drive further innovation in the crucial maritime autonomous systems sector.
• South Yorkshire - A key region for the research, development and engineering of high-grade components and materials critical to the next generation of maritime, land and air capabilities. This includes specialist steel for gun barrels and nuclear submarines. 
• Wales – The country is becoming a leader in UAV development and testing, from companies such as Tekever in Pembrokeshire, to testing sites including the Snowdonia Aerospace Centre, and academic institutions including the Welsh Centre for Defence Autonomy. 

• Scotland – Home to a dynamic mix of growth industries, from a rapidly advancing space sector, to next generation maritime innovation centred around the Clyde and Rosyth, and critical technology superclusters anchored by world-class academic institutions.

• Northern Ireland – Home to a diverse range of defence and dual use SMEs, the country is recognised as a leading cyber security hub, boosted by Queen’s University Belfast’s Centre for Secure Information Technologies and Momentum One Zero. It is also home to Thales and Harland & Wolff, companies that are critical to our support to Ukraine and our maritime strength. 

The DIS is a long-term investment in both security and high-growth economy - by strengthening the industrial base and preparing for future challenges, it will unlock defence’s potential as an engine for growth under the Government’s Plan for Change.