UK sets offset requirements for selected major overseas defence contracts

On 30 October 2026 the Ministry of Defence published its UK Offset Policy. From April 2027, it plans to apply offset requirements to selected acquisitions from overseas suppliers. Contracts worth at least £50 million may be considered. The threshold does not make offset automatic: each decision must be lawful, proportionate and consistent with international obligations.

What changes

Where the requirement applies, an overseas contractor will enter a separate Offset Agreement to deliver additional UK benefits. These may include jobs and apprenticeships, new or expanded facilities, purchases from UK suppliers, technology transfer and UK-made components. The value of these commitments could reach the value of the main contract. That is the value of obligations, not a cash grant promised to small firms. A central Offset Authority will agree and monitor delivery.

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What smaller firms can do

UK manufacturers, engineering firms, technology developers and training providers may find opportunities in major contractors’ supply chains. The policy creates no guaranteed order or direct grant. Overseas bidders should examine each tender early for offset terms; the MOD says it will notify suppliers clearly. Smaller suppliers can prepare evidence of capacity, skills, relevant standards and UK operations for discussions with prime contractors.

Scope: UK defence and national security acquisitions from overseas suppliers. Timing: policy published on 30 October 2026; application to selected procurements is planned from April 2027, with no exact day announced. Check each tender’s documents and the official policy for binding terms and deadlines.