Overseas companies winning significant UK defence contracts will be required to invest benefits back into Britain under a new Offsets policy announced by the government on 30 October 2026. The Ministry of Defence said contracts worth over £50 million will be considered for offsets, with contractors required to deliver benefits that could reach the same value as the contract — for example, new jobs, facilities or skills training up to the value of a £100m contract.

The policy was announced by the Chancellor and Defence Secretary during a visit to BAE Systems Scotstoun in Glasgow. Qualifying companies could meet their commitments through creating British jobs and apprenticeships, opening or expanding UK factories, investing in British suppliers, transferring technology and know-how, or using more UK-made components. A new central Offset Authority will agree, value and monitor delivery through dedicated agreements.

The government said the approach will apply to a select number of procurements from April 2027, with suppliers notified early where offset requirements apply. It follows a target of 3% of GDP spent on defence in 2030, on the path to the NATO commitment of 3.5% in 2035. The government said over £35.2 billion has been spent on defence contracts and services with industry overseas since 2016, representing 11 per cent of total MOD direct expenditure with industry and commerce between 2016/17 and 2025/26.