Written submissions placed before the Defence Committee laid out a picture of an industry under pressure: roughly 74 per cent of defence-technology firms taking part in the survey reported a shrinking marketplace, around 88 per cent had encountered postponements or reductions to their funding streams, and 93 per cent were reconsidering their plans for investment or recruitment within the sector.
Appearing before the committee, techUK's chief executive Julian David addressed questions about what the Defence Investment Plan would mean for British industry. Presenting survey data to the committee, he noted that a poll conducted in May had found nearly three-quarters of members reporting a contraction in the market, while funding delays and reductions had affected 87% of those surveyed, with 93% now reviewing their investment plans or hiring intentions in the sector. He separately conveyed that defence-oriented technology members had anticipated the publication of the plan would bring a notable rise in technology-focused activity and a flow of orders, particularly to smaller businesses.
He went on to note that a follow-up check with techUK members had turned up little evidence of forward movement, and that smaller businesses faced a particular strain given their dependence on day-to-day cash flow to keep operations running. He went on to raise the matter of departmental staffing, noting that the MOD remains under-resourced when it comes to procurement capability, particularly where newer acquisitions and contracts with smaller suppliers are concerned.
Presenting data gathered by the Federation of Small Businesses to the committee, Arnab Dutt noted that pipeline documentation draws on just thirteen per cent of small businesses when they seek out public-sector opportunities, whereas active procurement platforms attract roughly twice that proportion at twenty-eight per cent, and that nearly two in three small businesses attempting to secure government contracts describe locating appropriate opportunities as a challenge.
Dutt pointed out that a survey finding showed 19% of businesses that had already worked with the MOD indicated they would not pursue further engagement, attributing that position to structural obstacles and the volume of effort the process demands. He told the committee that the Federation had received minimal consultation on the plan, describing it as the organisation's main bugbear since publication.
Presenting figures to MPs, David noted that of the £7.5 billion earmarked for small and medium-sized enterprise spending by May 2028, roughly £2 billion flows through direct channels while the remaining £5.5 billion passes through indirect routes, adding that the department monitors progress against those targets without having yet made firm commitments or achieved the corresponding expenditure.
He also raised two further procedural concerns: first, that procurement staff be measured against rolling targets and live performance indicators rather than waiting until the end of 2028 for any reckoning of results; and second, that the definition of a small or medium-sized enterprise differs between the Procurement Act and the fair payment code on one hand and departmental practice on the other, a gap that forces businesses familiar with one reporting framework to operate under a different one.
