Suppliers could meet their commitments through jobs and apprenticeships, new or expanded factories, investment in British suppliers, technology transfers and greater use of UK-made components. A central Offset Authority will agree, value and monitor delivery through dedicated Offset Agreements.
The policy is designed to secure domestic benefits when the government buys defence equipment abroad. The Ministry of Defence said it would also encourage overseas contractors to build lasting relationships with British industry and help smaller suppliers enter global supply chains.
“Every pound we invest in defence should be judged by what it does for Britain,” said Defence Secretary Wes Streeting. “That’s why we are backing British by buying British wherever we can.”
The government published the policy on 30 October, announcing it during a visit to BAE Systems’ Scotstoun shipyard in Glasgow. Suppliers will be told early in the procurement process whether offset requirements apply.
“We are putting British jobs and British businesses at the heart of how Government spends taxpayers’ money,” said Chancellor John Healey. The government said the policy would allow benefits from an overseas contract to reach the same value as the award.
The MOD spent more than £35.2 billion on contracts and services with overseas industry between 2016/17 and 2025/26. That represented 11% of its direct expenditure with industry and commerce over the period.
The UK joins countries including Poland, Norway and the Netherlands in using offsets to secure economic benefits from defence procurement. The measure forms part of the government’s Back British purchasing approach and supports its Defence Industrial Strategy and £298 billion, four-year Defence Investment Plan.
