British defence policy must give manufacturers enough confidence to invest years before additional capacity is urgently required,
Goonvean Group has warned in evidence accepted by a House of Lords inquiry. The Group told the Industry and Regulators Committee that procurement portals and opportunity pipelines are useful, but they do not necessarily provide an investable demand signal for industrial businesses facing decisions over factories, long-lead machinery, skilled labour and qualification costs.
The issue is becoming more important as defence spending rises. The Defence Investment Plan sets the MOD budget at £79.1 billion in 2029/30, while the MOD’s new SME Action Plan commits to increase total direct and indirect SME spend from a £5 billion baseline by a further £2.5 billion by summer 2028.
Goonvean’s argument is grounded in its own recent investment in
Precision Casting in Totnes. The Group has committed around £6 million to expanding and modernising the aluminium foundry, with planning beginning in 2022 and the new facility expected to be fully operational by the end of 2026. The investment includes new moulding and melting technology and is designed to increase capacity by around six times. Goonvean says it was a privately funded, medium-to-high-risk decision made in anticipation of increasing demand for on-shored production and sovereign supply.
Matthew Gazzard, managing director of Goonvean Group, said: “Industrial capacity cannot simply be switched on when a crisis begins. Our Precision Casting investment shows the reality: discussions began in 2022 and the new facility will not be fully operational until the end of 2026. Manufacturers are willing to invest, but a board needs more than a list of opportunities. It needs enough confidence in timing, scale and durability of demand to commit capital, equipment and people.”
Latest official statistics show that only 4% of direct MOD expenditure with UK industry went to SMEs in 2024/25. The South West recorded the second-highest regional proportion, at 6%. Goonvean says the figures underline the importance of ensuring that higher defence budgets translate into real work throughout the supply chain, not only into headline programme awards.
Goonvean supports the Government’s SME ambitions but says policy must also address the growth stage between SME support and the strategic-prime model. Specialist manufacturers can become too large, or part of a wider industrial group, and cease to fit comfortably within SME-focused structures while remaining far smaller than major defence suppliers. The Group is calling for a clearer continuous pathway from SME to specialist mid-tier supplier, greater recognition of ownership and succession risk in assessments of industrial resilience, and supply-chain mapping that identifies critical processes, machinery, skills and regeneration times rather than simply legal entities.
Goonvean employs 375 people across the South West, including 220 in its engineering businesses, and has invested more than £10 million in engineering capability over the past two years. Its Engineered segment includes Precision Casting, Goonvean Core Engineering, Goonvean Electronics and NDE, and Goonvean Fibres. Mr Gazzard added: “The Government’s direction of travel is positive. The next challenge is implementation: creating a market in which private industrial capital can respond early enough to build the capacity Britain says it will need.”
Goonvean’s evidence will form part of the material considered by the House of Lords Industry and Regulators Committee.