The UK Unveils “Team UK Strategy To Align Defence Spending With Economic Growth

The UK government has launched a coordinated strategy to link national defence priorities with regional economic development, introducing a “Team UK” approach that brings together the Ministry of Defence, HM Treasury, private investors, and leading defence firms. The Defence and Economic Growth Taskforce, co-chaired by Chancellor Rachel Reeves and Defence Secretary John Healey, released a report recommending a series of structural reforms aimed at unlocking high-value jobs and stimulating growth across the United Kingdom. The initiative marks a shift in industrial policy, viewing the defence sector not solely as a cost centre, but as a lever for national productivity, innovation and employment.

One of the first tangible outcomes of this agenda is the announcement by defence tech firm Helsing of a £350 million investment in the UK’s first “Resilience Factory” in Plymouth. The site will produce AI-powered miniature submarines intended to secure undersea infrastructure and support allied naval operations. Originally a continental firm, Helsing has chosen the UK as a manufacturing and R&D base, reflecting its alignment with British defence industrial strategy and confidence in the government's commitment to dual-use innovation.

The new facility is expected to generate a significant number of high-skilled jobs in the South West, while embedding AI and autonomy deeper into British naval capabilities. At the core of the Taskforce’s recommendations is the proposal for a national “Team UK” framework, integrating government, industry and finance in the planning and delivery of future defence capability. The report calls for structural reform in procurement processes, stronger coordination across departments, and a focus on scalable dual-use technologies.

This model is designed to enable faster adoption of innovation while reinforcing sovereign supply chains. It also includes the introduction of regional Defence Growth Deals, aimed at redistributing the benefits of defence expenditure across the UK’s industrial and geographic base. The initiative aligns with the government’s broader defence commitment to raise spending to 2.6% of GDP by April 2027.