MoD must Marshal UK financial services to boost defence, urges landmark report

A landmark report argues that the UK must marshal its financial and professional services to strengthen national security and defence. The authors say that in the teeth of increasingly serious geopolitical threats, the government budget is insufficient by itself to fund the pace and scale of innovation needed.

Authored by Air Marshal Andrew Turner CB CBE and Mark Wheatley, the report, entitled ‘Mobilising the UK Financial Services to Advance United Kingdom’s Interests: Moving at Pace, with Enterprise for the Good of All’, paints a grim picture of the current geopolitical scene, noting that the combination of state threats, cyberattacks, and foreign wars demand a step-change in how the UK approaches rearmament and innovation.

Though defence technology is increasing in sophistication globally, UK innovation is currently hampered by bureaucracy, a risk-focussed culture, and a lack of investment. So far, the City has been hesitant to back defence, due to a combination of ESG concerns, regulation, and the intrinsically slow-moving character of the sector. But defence, argues the report, is crucial to resilience and growth.

The report stresses that the scale of investment the UK requires in defence and security now far outstrips what the government can commit on its own. Mobilising private capital at speed has therefore become a national security priority. The authors argue that renewed public-private financial machinery is essential, not simply to keep pace with technological change, but to underpin the Treasury’s wider vision. Without new routes for private sector participation, Britain will struggle to generate the scale of innovation needed to deter adversaries and defend its interests.

One of the most acute challenges for emerging defence technology firms is scale capital – the funds that allow an idea to move from the lab to battlefield. The MoD has done this superbly with dedicated funds and abbreviated due diligence processes for Ukraine through Task Force Kindred. It must now do the same for UK technology, firms and security concerns.

To close this gap, the report calls for the creation of a Defence Growth Fund, either within Defence or as a carve-out from the National Wealth Fund. By providing safe, low-cost growth capital in the £10m to £20m range, such a fund would give Britain’s innovators a path to scale at home, ensuring technology vital to national security is not lost overseas.

Published to coincide with DSEI 2025, the report – put together by Delano Wheatley Consulting and Skadden, with support from space- and defence-focused communications agency Sonder London and private equity firm NewSpace Capital – notes that London remains Europe’s financial centre and has the muscle to fuel a transformation in how the UK approaches national defence and security.

The authors recommend a series of urgent measures, including:

• Government-backed sandboxes for defence innovation.

• A Defence Growth Fund to provide safe, scalable capital (£10–20m tickets).

• Refreshed public–private partnerships for critical infrastructure.

• Stronger incentives for SME finance and exports.

• A ‘defence guarantee’ to encourage greater private sector lending.

• Streamlining of defence accelerators and the procurement regime.

• Embassies tasked with championing UK defence exports.

In his foreword, Rt Hon Tom Tugendhat MP said the ‘holiday from history’ was over: ‘From Taiwan to Alaska, the return of state-based threats and instability has reawaken an era of competition. Nowhere is this more fierce than in technology. The age of incremental investment has to give way to a generation of innovation.

‘Defence industry, and capital markets, are key. The shift in technology – in areas like AI, quantum, cyber and space – show the need to rethink where modernisation matters and adapt our industry and those that support and train our future innovators.

‘We no longer have the luxury to ignore our own security needs.’

Air Marshal Andrew Turner CB CBE, co-author of the report, said: ‘Investment in security and driving national growth are not just symbiotic, they are critically inter-dependent. The markets and Government must work together to unlock public and private capital, drive innovation, and ensure that the United Kingdom retains its edge. The potential to lead is within reach, but greater and faster  investment is required.’

The report is expected to shape debate among ministers, officials, industry leaders, and investors.