The Strategic Defence Review – What Heligan expects to be announced

Heligan Strategic Insights is the part of Heligan that looks to the horizon, understands where threat intersects with new and emerging capabilities, and how those things intersect with a whole range of external forces - such as government spending, geo-political factors, the financial markets and what nation level adversaries’ intent might be - over the next five to ten years. We use this insight to drive our investment thesis and generally make better decisions based on the strategic advantage we provide.

We are not alone though. Inside government, right now, there are groups of people in the Defence and National Security community, working alongside the Cabinet Office, Treasury, external advisors and a myriad of others to pull together one of the most important policy documents you can imagine. It will set the strategic direction of our defence posture globally, uplift spending significantly to face head-on the traditional, new and emerging threats we face as a nation and set a standard for others globally to follow. This is of course the Strategic Defence Review and it will be published at some point in the first half of 2025, probably sooner rather than later though.

Over the last two weeks, HSI has been talking, and listening, to some of the people at the very heart of creating this crucial set of documents. From those that are directly part of the process of drafting it, to those from the military and intelligence community that influence it. We have talked to academics, lobbyists, special advisors, former and serving generals and former heads of three letter agencies. While every one of these conversations was under Chatham house rules and all discussions took place under the protection of anonymity and on the understanding that they would not talk about what is directly in the SDR, they have shared themes, views, and plenty of lines for HSI to read between and provide the below read out of what we at Heligan believe are going to be the main headlines.

First of all, let’s quickly get on the same page regarding the SDR and defence and national security in general. The Strategic Defence Review enables the government to present a forward-looking assessment of Britain’s strategic interests and requisite defensive requirements. This one is different because it is externally led, whereas all previous defence reviews have been conducted by the government itself. This 2025 review is led by Lord Robertson, a former Labour Defence Secretary and Secretary General of NATO. The last one was in 2021 and refreshed in 2023.

When it comes to defence and national security, we must be mindful that we are not exclusively talking about boots on ground and armaments. Yes, that is of course a facet, but it’s far wider and far more complex. Defence and national security encompasses all parts of the Governments first duty, that of keeping its citizens safe. Much is actually centred around the deterrent we can project as a nation to stop aggression or attack. It’s also about the new technologies we can harness to give us strategic advantage, and through that advantage, create deterrent by default.

When Prime Minister Keir Starmer announced this review on taking office in July 2024, he outlined the reasons he felt we needed an SDR so soon after the last iteration. He said:

“We live in a more dangerous and volatile world. My government will forge a new clear-eyed approach to our national defences, equipping us to tackle international threats head-on while keeping the British people safe and secure.”

And he’s not wrong. We are living in complex and contested times with global instability and an evolving threat of inter and intra continental conflicts. The global defence landscape is undergoing a significant transformation, driven by rising geopolitical tensions, technological advancements, and evolving threats. In Europe, the Russia-Ukraine conflict has accelerated defence spending and cooperation, with nations bolstering their military capabilities.

So, what will be in the SDR? Taking in the caveats above, here is what HSI believe are the five most likely outcomes, recommendations and policy directions that are relevant to our areas of interest:

The UK government will commit to increase defence spending (this was announced and committed to in February 2025). The UK has met NATO’s 2% of GDP target consistently (spending about 2.3% of GDP in 2024), and it now aspires to raise this to 2.5% of GDP by the 2027/28 FY (2.6% when you include additional uplift for Intelligence). The SDR will set out where this government investment will be deployed and will also reiterate the commitment that by 2034 (by the end of the next UK parliament) defence and national security will increase to 3% of GDP.
Expect there to be a hardening of language with references to the UK being in a “pre-war state”. There is likely to be a focus on the evolving relationship between the USA and the UK, Europe and NATO. We should expect that the long-held protection afforded by US security guarantees that we have enjoyed since the end of the second world war are shifting or in some cases disappearing, primarily due to the developing isolationism being seen within the US. NATO will continue to be the cornerstone of our defence posture, regardless of what might be happening on the other side of the pond.
We are likely to see a massive emphasis on changing the way we procure defence and security capability in the SDR as well as who they procure from. There has already been significant talk and preparations for a new National Armaments Director to tackle inefficiency and boost production of the capabilities we will need over the coming years. We will probably see a break-up of Defence Digital into more specific and more agile units, charged with delivering change and new capabilities to the front line at super-charged pace.
Linked to this we should expect to see a greater emphasis on SME’s, scale-ups and proto-primes in the SDR and how they are the lifeblood of the technology development we are going to need. The “loveless, co-dependent marriage between Primes and MoD” is no longer fit for purpose and we will see plans for radical change in the balance of power in this SDR.
Ukraine has redefined the nature of warfare. Key areas for greater investment will be in Space, Precision information, Automation, AI, UAS, all in the pursuit of increased lethality will be key themes in the SDR.

In conclusion then. The UK is now in a new era of Defence and National Security. This new era will be defined by an increased US isolationism driven by an ideological alignment to strong-arm, deal-led tactics that will force the UK to re-assess and re-align its military and security posture. We collectively cannot rely on the pre-2025 security bubble that has been in place since the second world war. We must also consider that a conflict with Russia is a genuine possibility in the next five years and as such our ability to defend and project power will need to change. This is not just the view of HSI, rather the view of UK and European leaders and senior military figures.

HSI believes that will need a “whole of society endeavour” and a new alignment between government, industry, academia and investors to get the UK match fit for what is to come.

Investment in particular, will be a key facet going forward. It is generally accepted that defence and national security investment has, until now, been seen as niche and undervalued. That has now changed. Investment will be a critical enabler of the broader ecosystem of defence and national security spending with the barriers more open to those that are able to navigate and exploit the opportunities available most effectively. We expect the SDR to underline and reinforce that point.

Heligan is primed and ready to go. We have developed a unique and highly specialised proposition that is in the right time and in the right place to be the defence and national security investor of choice here in the UK and internationally - both in Europe and the NATO nations.