Scotland Growth Deal
Source: gov.uk (2025-09-07)

Landmark Scotland partnership to create jobs and harness military innovations

Pioneering scheme to unleash potential from Scotland-based businesses and research institutions.

Scotland to receive share of £250 million funding to forge long-term partnerships that will boost the local economy and benefit the UK Armed Forces.

Builds on Scotland being key to innovation in the space and maritime sectors, driving job creation and cutting-edge research and development.

Scotland’s economy will be boosted by a pioneering defence programme - backed as part of a £250 million UK-wide investment - to improve collaboration, foster innovation and create jobs.

Defence Growth Deals are being created as part of a bold initiative to support the growth potential of the defence industry, underpinned by the historic increase in defence spending to 2.6% of GDP by 2027 and the ambition to hit 3% in the next Parliament.

Utilising a share of a £250 million of money for UK Defence Growth Deals, Scotland will forge a long-term partnership between the UK and Devolved Governments, uniting business and research institutions in the nation to harness local expertise and resources in support of the UK Armed Forces.

Defence Secretary John Healey will today [Monday 8 September] announce the new venture as part of the launch of the Defence Industrial Strategy (DIS), which will make Defence an engine for growth.

Central to the DIS, the Defence Growth Deals will unlock growth, innovation, and job creation within key concentrations of defence and dual-use industry across the country, while bolstering the resilience of the UK’s defence industrial base.

Defence Secretary, John Healey MP said:

The Defence Industrial Strategy will make defence an engine for growth in Scotland, backing jobs, industry and innovators.

Defence Growth Deals offer a new partnership with UK defence to build on industrial and innovation strengths that regions already hold. Together we aim to drive an increase in defence skills and jobs across Scotland.

We want to make the UK the best place in the world to start and grow a defence firm and will put Britain at the leading edge of innovation.

Chancellor Rachel Reeves said:

This is a plan for good jobs paying decent wages in Scotland and beyond.

Through Defence Growth Deals we will unleash the power of local economies while securing our country - building an economy that works for working people, in every part of this country, just as our Plan for Change promised.

Latest statistics show that more than 11,000 people in Scotland are already employed due to MOD industry spending, and this work will ensure every ounce of the sector’s potential is realised, driving economic growth and delivering on the Government’s Plan for Change.

Secretary of State for Scotland Douglas Alexander said:

The UK Government’s Defence Industrial Strategy will mean a real boost for Scotland’s economy and create highly skilled jobs for years to come – this is the defence dividend. Just last week we saw a £10 billion shipbuilding contract come to Clydeside – that is a fantastic example of what can be achieved with a government committed to ensuring Scotland benefits from the global rise in defence spending. Scotland’s defence sector is second to none, and our Defence Industrial Strategy will help ensure it has a thriving future, as part of our Plan for Change.

Scotland brings a dynamic mix of growth industries to the UK’s defence capabilities, from a rapidly advancing space sector to next-generation maritime innovation centred around the Clyde and Rosyth. The nation’s critical technology superclusters are anchored by world-class academic institutions like the Universities of Glasgow and Strathclyde, creating a fertile environment for defence research and development.

Scotland’s shipbuilding heritage combined with its emerging space technologies makes it uniquely positioned to benefit from this Defence Growth Deal, driving innovation and job creation across traditional maritime sectors and cutting-edge aerospace industries that will strengthen Britain’s defence industrial base.

The nation will have its Defence Growth Deal unveiled in the coming months, working with the Devolved Government and other key stakeholders, the Ministry of Defence is launching a bespoke growth deal which will harness the distinct opportunities and strengths in the nation.

Detailed policy proposals will be developed collaboratively; areas of focus are expected to include:

Skills – addressing regional workforce needs and future capability requirements;

Innovation – supporting research, development, and adoption of new technologies;

Procurement – aligning local supply chains with Defence priorities;

Investment – targeting funding to unlock economic and strategic value;

Partnership – fostering impactful relationships that deliver for the people of Scotland.