The future of UK Defence: Key takeaways for SDR 2025

The long-anticipated outcome of the Strategic Defence Review (SDR) has finally landed[1] — and it’s a bold declaration: 62 transformative reforms spanning AI, submarines, munitions factories and digital warfare — all driven by a vision of a tech-empowerment. 

The SDR report marks an unprecedented, transformational moment in UK defence, but what might it mean for businesses and can it realistically deliver on its ambitious goals?

This briefing is a high-level, early assessment, designed to outline the key shifts in strategy, procurement, industrial policy, and innovation rather than to provide definitive answers. Only time, and detailed implementation, will tell. 

Over the coming months, we’ll be releasing a series of follow-up articles and events diving deeper into specific themes, from procurement transitions to tech investment and SME access, to help businesses navigate evolving opportunities under the SDR.

Background

In July 2024, the Labour government launched the SDR, led by Lord Robertson (former Defence Secretary and NATO Secretary General) with support from Dr Fiona Hill and General Sir Richard Barrons. The SDR was commissioned in response to the UK and its allies confronting the most serious security threats since the Cold War. This includes conflicts in Europe, rising nuclear tensions and adversary alliances, and increasingly sophisticated cyber campaigns and hybrid warfare strategies. 

The SDR report provides a comprehensive ‘root and branch’ review of the UK defence landscape, drawing on extensive evidence gathering from over 8,000 contributions from a broad variety of stakeholders and integrating lessons learned from the war in Ukraine to inform the wide-ranging recommendations.

The SDR’s Vision and Key Announcements

The SDR report sets a clear and bold vision for the UK by 2035: to become: “A leading tech-enabled defence power, with an Integrated Force that deters, fights, and wins through constant innovation at wartime pace.”

This encapsulates the goal to make the UK safer, secure at home and strong abroad. 

The SDR sets out five ‘ambitions’ and an impressive 62 recommendations across those ambitions to support this vision. The UK Government has accepted all recommendations for implementation. We have set out below the five ambitions and some of the key recommendations under them:

• ‘NATO First’ — stepping up on European security by leading in NATO, with strengthened nuclear, new tech, and updated conventional capabilities. This includes transforming the UK’s aircraft carriers to become the first European hybrid air wings and the manufacturing of 7000 new long-range weapons.
• Move to warfighting readiness — establishing a more lethal ‘integrated force’ equipped for the future, and strengthened homeland defence. This includes a:
  • ‘New Hybrid Navy’: building the Dreadnought and SSN-AUKUS submarines, cutting-edge warships and support ships, transformed aircraft carriers, and new autonomous vessels.
  • Next-generation RAF: including next-generation fast jets through the Global Combat Air Programme (“GCAP”), and autonomous fighters.
  • Sovereign warhead programme: a £15bn investment.
  • Homeland air and missile defence: up to £1bn new funding.
• Engine for growth — driving jobs and prosperity through a new partnership with industry, radical procurement reforms, and backing UK businesses. This includes:
  • Investing in munitions: Investing £6bn in munitions this Parliament, including £1.5bn in an ‘always on’ pipeline for munition, building at least six new energetics and munitions factories in the UK, and manufacturing up to 7000 new long-range weapons.
  • Establishing ‘UK Defence Innovation’: with £400m to fund and grow UK-based companies.
  • Establishing a New Defence Exports Office: to drive exports to the UK’s allies and, as a result, growth in the UK.
• UK innovation driven by lessons from Ukraine — harnessing drones, data, and digital warfare to make our Armed Forces stronger and safer. This includes up to £1bn for the digital integration of the UK’s Armed Forces through a New Digital Targeting Web to be delivered in 2027.
• Whole-of-society approach — widening participation in national resilience and renewing the Nation’s contract with those who serve. This includes at least £7bn of funding this Parliament for renewal of military accommodation.

To support the successful implementation of the recommendations, the SDR report states that the whole of the UK Defence should be driven by the logic of the ‘innovation cycle’: (i) Find it: Defence must be able to seed early-stage research, using its purchasing power to shape the commercial market;(ii) Buy it: Defence must be able to get innovation and new capabilities to the front line at speed, creating the conditions for the market to invest, experiment, and scale; and (iii) Use it: Defence must continually develop its people’s skill set, adapt its organisation, and exploit a common digital foundation to which all software-enabled assets connect.

Commentary

The SDR marks a shift from conventional capabilities toward warfighting readiness and high-technology weaponry. By emphasising digital innovation, drone technology, and industrial production, the government is creating opportunities for suppliers who can deliver on UK defence requirements at pace. Suppliers should note the emphasis on local production, an “engine for growth,” and the promise of a more agile procurement process to expedite vital assets to the front line. Internationally, the reaffirmed NATO-first commitment reinforces Britain’s role in Euro-Atlantic defence at a time of rising geopolitical instability. The potential for economic stimulus is significant as, by prioritising UK-based production, from munitions to submarine construction, the government aims to revitalise domestic industry, create sustainable jobs, and secure supply chains. 

Yet, realising these SDR ambitions will need to be translated into specific investment decisions (which we understand will be taken later this year (Autumn) as part of the development of a Defence Investment Plan) and will require radical reforms to the defence procurement system (which the Public Accounts Committee and Defence Select Committee have both called ‘broken’).

“Nothing works unless we all work together” - Next Steps

Those involved or looking to enter the defence sector should closely monitor the policy direction and implementation of the SDR’s recommendations, as they will shape not only the future of UK defence policy, but also the landscape of the international defence market in which the UK is a key player. Stakeholders should consider how they may seek to align with the SDR’s ambitions and vision and keep a close eye on the development of the Defence Investment Plan.

Please keep an eye out for our upcoming events, insights and deep dives into the SDR and the implementation of its recommendations.

For more information, please get in touch with Mark Leach or Andrew Dean.

[1] https://www.gov.uk/government/publications/the-strategic-defence-review-2025-making-britain-safer-secure-at-home-strong-abroad