If implemented, the offset arrangement would support smaller firms in the UK.   

The UK plans on launching a new defence offset approach to ensure that UK businesses benefit when the government purchases internationally, a 23 October UK Ministry of Defence (MoD) announcement has revealed. 

Announced to an audience of small and medium-sized enterprises (SME) by the UK Minister for Defence Procurement, Luke Pollard, the ‘Back British’ offset approach aims to ensure that international companies share know-how and invest in the UK in an effort to strengthen the economy.  

The proposed approach is dependent on the results of an industry consultation and would mean that “when the UK buys from international partners, the winning contractor would be required to create jobs, know-how, and investment opportunities here in the UK”, the MoD said. 

Under this approach, first referenced in the UK’s recent Defence Industrial Strategy (DIS) published in September, international partners may be required to base some manufacturing in the UK, use UK SMEs in the supply chain, or make investments into UK skills.  

“SMEs, which form the backbone of the defence industry, will benefit from the new approach”, the MoD said. 

The MoD also referenced a previous commitment made in the DIS to increasing spending with SMEs by GBP2.5 billion by 2028. This came ahead of MoD figures revealing 560 new contracts were placed with SMEs between 2024 and 2025 at a collective value of GBP941 million, down by 10 contracts and GBP213 million compared with the previous year.  

A 12-week consultation closing on 23 December on the offset approach will now begin to shape any final framework and ensure it works for both UK firms and international partners.  

The written consultation seeks answers to three questions specifically, according to separate documentation, including what the benefits and risks of a UK offset policy are, what opportunities there are for greater international collaboration, and how the offset policy might impact the UK defence sector.  

Also included in the announcement was the launch of a new Northwest Cyber Accelerate programme, which aims to provide support, training, and mentorship to technology startups across Lancaster, Manchester, and Preston.