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04 Sep 25. UK and Norway sign historic deal strengthening NATO’s northern flank and boosting jobs and growth. The Defence Secretary, John Healey, and his Norwegian counterpart, Tore O. Sandvik, today signed an historic agreement to enhance the strategic partnership between the UK and Norway
- Prime Minister visited BAE Scotstoun to meet the team who helped to land the biggest ever warship export deal worth £10bn – supporting over 4,000 UK jobs and delivering on the Government’s Plan for Change.
- Comes as the Defence Secretary and his Norwegian counterpart signed the deal today in Stavanger, Norway.
- Deal cements deep strategic partnership and will boost national defence through strengthened security in North Sea, Baltic Sea, and High North.
UK and European security was bolstered today following the signing of a new deal for Norway to purchase at least five Type 26 frigates from British shipbuilders, in a move that will create a combined fleet to better counter Russia on NATO’s northern flank. Prime Minister Keir Starmer visited BAE Scotstoun to say thank you to the those who helped get this huge contract to build the cutting-edge vessels, which will support 4,000 jobs across the UK well into the next decade — including 2,000 in Scotland. The Defence Secretary, John Healey, and his Norwegian counterpart, Tore O. Sandvik, today signed the historic agreement to enhance the strategic partnership between the UK and Norway, strengthening NATO in the region and providing more opportunities for joint training and personnel exchanges between the two nations. At today’s signing in Norway, the Defence Secretary and the Norwegian Minister of Defence Tore O. Sandvik discussed further joint operations through this deepened partnership. The Defence Secretary also met Norwegian Navy recruits undergoing basic training who will in future likely serve on the Type 26 frigates built under this agreement.
Defence Secretary, John Healey MP, said: “This deal will support thousands of UK jobs for many years to come and boosts our strategic partnership with Norway. Our close bonds are built on a shared geography and history, and this deal will see our navies work as one, creating a combined fleet to defend NATO’s northern flank and strengthen our deterrence against Russian aggression. The programme is also expected to support 432 business, including 222 small and medium enterprises, across the UK.The £10bn deal delivers on the Government’s Plan for Change – creating jobs, driving growth and protecting national security for working people. It is a striking vote of confidence in the UK’s world-class shipbuilding industry.” (Source: https://www.gov.uk/)
02 Sep 25. Non-UK defence firms net higher average contract award from MoD. The average contract value awarded to non-UK defence companies was over 20% higher than deals given to UK firms. Contracts awarded to non-UK companies in the 12 months from July 2024 by the UK Ministry of Defence (MoD) were 23.1% higher on average compared to UK-based defence companies, according to official figures. Detailed in a 1 September UK parliamentary written response, UK Defence Procurement Minister Maria Eagle disclosed that between 1 July 2024 and 30 June 2025, 1,244 contracts valued at £17bn ($23.2bn) were awarded to suppliers based in the UK. By contrast, 174 contracts, worth £3bn, were awarded to suppliers located outside the UK. Extrapolating the median contract value from the number of contracts and combined amount, it can be determined that non-UK companies received an average slightly in excess of £17.2m per award, compared to just over £13.6m for UK-based companies. The contracts were among 2,674 awarded in the reporting period, with the remaining 1,256, representing £3bn, “currently under reconciliation” to determine the actual location of the supply base, Eagle stated. Further, Eagle said the while MoD records contract awards based on the administrative address provided in the supplier’s successful tender, actual delivery of goods or service “may be carried out by an international parent company”.
Where are the UK’s industrial strengths?
Analysing the UK’s defence industrial base finds severe capability gaps in the delivery of specific complex items, particularly in the land domain which is heavily reliant on overseas expertise to deliver upgrades and new vehicles into service. This is less apparent in the areas of the air and naval sectors, where UK companies still maintain, the ability to provide turnkey platform delivery to UK forces. However, recent decision to sideline UK equipment for overseas-origin platforms, such as the F-35, could weaken extant industrial capability. Some non-military SMEs in the UK have found success in entering the defence sector, although issues remain in better understanding the labyrinthine contractual corridors of Main Building.
UK wants to use defence to drive economic growth
Since coming to power in mid-2024, the new UK government has sought to leverage the country’s defence sector as a lever for economic growth, seeking to use it to create jobs and inward investment. To this end, the government has claimed an intention to increase defence spending to some 5% of GDP, although this is due to be delivered over a glacial decade-long roadmap. Previous analysis of defence funding increases by the UK government found that the budgets of non-military entities, such as the intelligence agencies’ Single Intelligence Account, will be included in overall defence spending for budgetary purposes. Of the intention to spend 5% of GDP on defence, some two-thirds of this could be claimed on investments into infrastructure that could have defence benefits, such as telecommunications and roads. (Source: army-technology.com)
02 Sep 25. EU sets military spending record, expects more growth in 2025. The European Union collectively spent €343bn ($402bn) on defense last year, exceeding projections and setting a new record, according to a new report by the European Defense Agency. The agency said it expected defense spending to increase further in 2025 to €381bn ($446bn). The bloc’s total defense spending in 2024 exceeds China’s by about one-and-a-half times, and is more than three times as high as Russia’s military budget. Only the United States has higher military expenditures. The figure represented 1.9% of the bloc’s GDP, and a 19% increase over the previous year. The high level of defense spending is driven primarily by countries’ purchasing of new equipment, as well as by increased research and development funding across the EU’s 27 members. Both combined are collectively referred to as “defense investments” in EU parlance, as opposed to the money spent on troop salaries or upkeep of facilities. Investment accounted for 31% of total defense spending, or €106 bn ($124bn), of which €13bn ($15bn) was used on R&D. Equipment purchases were up 39% year over year, the EDA calculated; research and development, meanwhile, grew 20%. The record spending is driven by growing budgets throughout the bloc, not just individual capitals’ aims to expand their militaries, with all but two countries growing their defense budgets in 2024. Of the 25 that increased defense expenditures in 2025, 16 capitals spent over 10% more in 2024 than they did in 2023. Among them are Germany, Poland, Spain, Sweden and the Netherlands. Only Portugal’s and Ireland’s military budgets decreased in 2024. European military spending has been growing exponentially since 2014, when Russia annexed the Crimean peninsula from Ukraine. At the time, defense expenditures across the bloc had reached their lowest levels since data collection began in 2005, at €189bn ($221bn), adjusted for inflation.
Although already on the rise, this trend was turbocharged by Russia’s intensified, full-scale assault in Ukraine, which began in February 2022. In fact, defense spending last year grew even faster than the EDA had expected, exceeding the agency’s predictions from late 2023 by €17bn ($20bn). Many of the EU’s largest defense spenders are in Russia’s immediate vicinity. Poland leads the pack, at close to 4% of GDP last year, followed by Estonia, Latvia and Lithuania, each spending well over 3% of GDP on the military. The EU itself has played an increasingly active role in coordinating cross-national projects and mobilizing military funding that had previously been set aside for civilian purposes. Defense matters have long been jealously guarded as a national prerogative by many EU countries’ capitals, but many of those attitudes have recently softened in light of the threat from Russia and an increasingly icy United States, and eased by the promise of cheap money facilitated by Brussels. The 2025 edition of the annual report placed special emphasis on comparing European military capabilities to those of the U.S., including juxtaposing how many battle tanks and fighter jets they each have, and how effective their R&D investments were. The numbers show that the EU lags behind in air force numbers, while well exceeding American totals when it comes to infantry fighting vehicles and main battle tanks. Europe’s strength lies in cooperation across national borders, the EDA concluded, underscoring in its report the need for coordination in procurement, interoperability, and joint research and development.
“Europe is spending record amounts on defence to keep our people safe, and we will not stop there,” said Kaja Kallas, the European Union’s foreign policy chief. “Defense today is not a nice-to-have but fundamental for the protection of our citizens. This must be the era of European defense.” (Source: Defense News)
03 Sep 25. Report by the Comptroller and Auditor General. MoD does not know exact cost to date of Afghan data breach resettlement scheme
- MoD cannot calculate exactly how much it has spent on the ARR scheme because it did not separately identify the costs in its accounting system.
- Around £850m – MoD’s estimated cost to government for resettling people in the UK through the ARR scheme as a result of the February 2022 data breach, not including legal costs or compensation claims.
- 7,355 – estimated number of people who will be resettled through the ARR scheme in the UK as a direct result of the data breach.
The Ministry of Defence (MoD) cannot determine exactly how much it has spent on resettling people in the UK through the Afghanistan Response Route (ARR) scheme and to date has not provided enough evidence to give the National Audit Office (NAO) confidence in its estimate of £850m in relation to past and future costs, according to a new report.1,2
In April 2024, the government launched the ARR scheme specifically for those whose personal information was leaked in a February 2022 data breach, who were ineligible for any of the other government resettlement schemes in operation,3 and who were at significant risk of reprisal by the ruling Taliban regime in Afghanistan.
The MoD did not record exactly how much it had spent on resettling people through the ARR scheme because it did not separately identify these costs in its accounting system, instead including them within its total spending on Afghan resettlement activities. It has stated that it did this to maintain the secrecy of the ARR scheme while a super-injunction was in place preventing disclosure of both the data breach and the existence of the injunction itself.4
The MoD has estimated the total past and future costs of resettling individuals through the ARR scheme to be around £850m, of which it estimates it had spent around £400m by July 2025. However, at the time of the report’s publication, it had not provided sufficient evidence to give the NAO confidence regarding the completeness and accuracy of its estimates. The MoD will incur at least £2.5m in related legal costs. It does not yet know how much related compensation claims may cost.
The total cost to the MoD of all Afghan resettlement activity between 2021 and 2029 is forecast to exceed £2bn. Between 2021-22 and 2024-25, the MoD recorded spending a total of £563 m on Afghan resettlement schemes, including the ARR scheme. It expects to spend a further £1.5 bn by March 2029.5
In early July 2025, the government closed the ARR scheme to new applicants. At the end of the same month, the MoD estimated that 7,355 people would be eligible for resettlement in the UK through the scheme directly as a result of the data breach.6
- The report will be available on the NAO website via the following link from 00:01 Wednesday 3 September: https://www.nao.org.uk/reports/the-afghanistan-response-route/
- The report is a factual account of the ARR scheme which the NAO has prepared to support the Public Accounts Committee’s scrutiny of the MoD. The MoD set up the scheme to mitigate the security risks arising from a data protection breach and the unauthorised disclosure of personal information which occurred in February 2022. The report does not seek to evaluate the MoD’s management of or spending on the ARR scheme, nor does it assess the evidence which led to the super-injunction being issued, maintained and then lifted, or any other aspects of the legal process. The NAO has reviewed financial information on the costs of the ARR scheme, but it has not audited this information.
- Figure 1 in the report lists the five Afghan resettlement routes established by the government between 2010 and 2025.
- In reaching its decision to grant the super-injunction, the High Court accepted the MoD’s assessment that if the existence of the data loss became widely known, the Taliban would be highly likely to obtain the data, which would put the safety and lives of many individuals and their families at risk.
- Figure 5 in the report sets out at a high level the MoD’s actual spending and future funding on Afghan resettlement schemes. The NAO is intending to perform further analysis of these costs in an upcoming report on Afghan resettlement schemes, which is due for publication in Spring 2026.
- 1,531 individuals and an estimated 5,824 of their family members who were affected by the data breach.
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