The Strategic Defence Review – the speculation is over, the hard work starts now!

The long awaited 2025 Strategic Defence Review (SDR) finally landed on the 2nd June, and while we here at Heligan have been busy pouring over the documents and analysing what it means for our sectors of choice, we have also been thinking about the wider implications for innovation, our portfolio and the businesses we are looking to invest in in the future. We’ve also been thinking about what this review say’s about the UK today and our position in NATO, Europe and the wider world. All big stuff! 

The SDR is titled "Making Britain Safer: Secure at Home, Strong Abroad," and it lays out an ambitious roadmap for transforming the UK’s defence and national security capabilities out to 2035. At its core it articulates a vision of a tech-enabled defence power that not only deters threats but does so through constant innovation and rapid adaptation. 

Before we launch into the detail, there are a number of headlines that need to be highlighted for those who prefer a TLDR:

  • Increase defence spending to 2.5% of GDP by 2027.
  • Aim for 3% in the next parliamentary term, contingent on economic conditions.
  • Anticipated support for NATO's proposed 3.5% GDP defence spending target by 2035
  • Regular army to grow to 76,000 troops, with a 20% increase in reservists.
  • Investment in drones, AI, and cyber capabilities.
  • Development of 12 new AUKUS attack submarines.
  • Construction of six new munitions factories with a £1.5 billion investment
  • £15 billion allocated to the Astraea nuclear warhead programme.
  • Development of a Digital Targeting Web with a £1 billion investment to enable rapid, integrated battlefield decisions by 2027

 

SDR Core Themes

NATO has been absolutely placed at the forefront of National Security priorities, with Indo-Pacific ambitions notably de-emphasised, this review really does represent a profound shift in the UK's strategic posture. What’s different is that this will be achieved through a blend of traditional deterrence, technological advancement, and organisational reform. The last of these three is the most compelling and the most in need of change if the UK wants to develop and deliver a truly integrated force ready for warfare at a pace previously only seen in times of conflict.

“Integrated by Design” was a phrase that was leaked weeks ago and flagged as a dominant feature of this review. The issues is MOD and the wider National Security community are really, really bad at integrating anything at scale with a catalogue of messy digital transformation projects scattered all over the place. This then, will be a new attempt to tidy up the digital backbone and infrastructure that is critical to underpin the UK’s digital ambitions. What is concerning is the admission that Defence has not yet made the organisational and cultural change necessary for success.  But having lived through several large scale £100M's tech transformation projects myself, I can attest that it is indeed very, very hard.  

Lots in this SDR about where the talent necessary for transformations and true integration is coming from as well as the necessary procurement process changes that are needed to jump-start getting the right stuff through the right doors, more quickly. 

The SDR does not shy away from institutional restructuring to solve that rather tricky challenge of talent, requirements, procurement and speed. A new Military Strategic Headquarters (Mil Strat HQ) is one of the new major additions and is charged with defining capability requirements, while the National Armaments Director (NAD – interim post to be held by the current CEO of DE&S, Andy Start) is positioned to oversee procurement and will see areas such as Defence Digital move from Strategic Command to NAD as early as July 2025. This separation of duties seeks to eliminate inefficiencies and promote accountability. 

Importantly for any business who has the pleasure of dealing with Defence and National Security in the past, there is a renewed and strong commitment to reducing the time it take to procure and get businesses on contract. Acquisition timelines need to be compressed and there are some pretty ambitious targets in this SDR such as large programmes and platforms to be contracted within two years, and smaller commercial opportunities within three months. Both significant in terms of making it easier to do business with this part of Government. 

There are some important new operational commands being set up too, a new Cyber and Electromagnetic Command is being established, underscoring the importance of emerging non-kinetic domains in future warfare. This reflects a broader commitment to resilience, encompassing everything from critical infrastructure protection to the education and training of wider communities that could be affected by attacks on infrastructure.

It's not all about new though. The National Security Technology and Innovation Exchange (NSTIx), previously an independent unit facilitating collaboration across the UK's national security science and technology sectors, will be closed down in 2025. While the SDR emphasises innovation and technological advancement, it does not explicitly mention NSTIx. However, the review outlines the establishment of new structures and investments to continue fostering innovation within the defence sector, such as the UK Defence Innovation Fund with £400 million allocated for UK businesses.

Despite its ambition, or maybe because of it, the SDR inevitably raises some questions around affordability and whether the ambition really can be translated into transformation.  The concurrent funding of major projects including shipbuilding, submarines, nuclear warheads, and the Global Combat Air Programme (GCAP) seems implausible even with the proposed 2.53% GDP spending targets and the devil will be in the delivery detail that will emerge over the coming weeks and months. The MOD’s historical tendency for cost overruns, particularly in anything nuclear-related, could lead to innovation initiatives being stripped away as budgets tighten…the one thing that really shouldn’t be stripped away and is needed above all else at this critical time. 

This then, is a Strategic Defence Review forged in the crucible of a new era, one defined by complexity, confrontation, and accelerating technological change. The UK is no longer preparing for an abstract future threat; it is positioning itself for the reality of sustained competition and conflict. With a sharpened focus on readiness, deterrence, and rapid innovation, this is a review that places the nation on a clear war footing, not as a provocation, but as a necessary recalibration for a world where uncertainty is the only constant.