How digital transformation can drive the green transition
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Response to Keir Starmer's defence spending announcement
This week, in light of a shifting global context and several scheduled transatlantic meetings, UK Prime Minister Keir Starmer announced that defence spending will increase to 2.5% of GDP by 2027. “We will use this investment as an opportunity,” Starmer said. “We will translate defence spending into British growth, British jobs, British skills, British innovation.”
This will mean spending an additional £13.4 billion every year from 2027, with budgets re-assessed across the government’s portfolio. In addition, there is an increased focus on the work of the UK’s security services in protecting the country, which will raise spending to 2.6% from 2027.
The announcement shows the UK re-evaluating what it takes to stay ahead in an increasingly risky landscape, amidst threats from hostile states.
For the UK to remain a leading military force, however, it needs investment in the right areas. We’ve seen billions of pounds wasted on big programmes, and not on services that work for the people who need to use them. Take Ajax, the Army’s much-criticised £5 billion armoured fighting vehicle programme; or the issues around military housing. We need radical transformation designed and implemented with consideration and – crucially – momentum.
As John Healey mentioned when he spoke about defence reforms back in November 2024, military morale is low; our Armed Forces have been “hollowed out and underfunded” the past 14 years. How can we rebuild morale and support the people risking their lives, both at home and overseas, fighting battles of both a tactical and digital nature?
Our view is that an increase in spending brings opportunity to do things differently. As our CEO Ben Terrett said, “the test-and-learn approach, endorsed by Pat McFadden last year, must be implemented to turn around the multi-million-pound change programmes that are currently not delivering.”
This means services over programmes. Intent over endless iteration. And implementing digital transformation that isn’t merely software-led. We also look forward to seeing how the Strategic Defence Review in May addresses this spending increase; how it plans to operationalise the recommendations; and how the government will look to manage the impact of the changes elsewhere in its portfolio – especially in international aid.
By addressing the fundamentals to ensure technology meets user needs, we can capitalise on this significant fiscal opportunity to do things the right way – not the familiar way.
Written by
Gurpreet Sehmi
Senior Director