Securing Scotland’s Future: Defence Skills and Jobs

Susan Murray Excerpts

Monday 26th October 2026 Commons Chamber

[Patricia Ferguson (Glasgow West) (Lab)]

I am grateful to the Backbench Business Committee for granting time for a statement on the publication of the Scottish Affairs Committee’s report, “Securing Scotland’s Future: Defence Skills and Jobs”.

As the House will know, significant increases in defence spending are anticipated as the UK works towards our commitment to spend 3.5% of GDP on defence by 2035. Our inquiry therefore examined a simple but important question: how can we maximise the positive impact of this spending in Scotland?

Scotland already has a world-leading defence sector, from shipbuilding on the Clyde and in Rosyth to aerospace, advanced manufacturing and cyber-capability. Growth in the sector has the potential to create more highly skilled jobs and support economic growth across Scotland—including, importantly, in rural and island communities.

The strategic defence review, the defence industrial strategy and the defence investment plan provide the framework for delivering these ambitions and for ensuring that Scotland is well placed to benefit from increased investment. However, our inquiry has shown that it is not a given that increased defence spending will benefit Scotland. We cannot afford to be complacent: ensuring that Scotland benefits will require long-term planning and co-operation between the UK and Scottish Governments to support jobs, skills development, innovation and growth.

The clearest message we heard throughout our inquiry was about skills. Employers, colleges, universities and trade bodies across Scotland repeatedly told us that the defence industry faces skills shortages, including in engineering, fabrication, welding, software, cyber and advanced manufacturing. This is despite major defence programmes such as for the Type 26 and Type 31 frigates and the Dreadnought-class submarines, which will require a sustained pipeline of highly skilled Scottish workers for years to come. This will be all the more important as the UK Government continue to win and sign deals for the export of Scottish-made defence products such as frigates.

We have heard similar messages about skills shortages in our inquiries into other sectors, including offshore wind, civilian shipbuilding and space launch, to name but a few. Many of those sectors, which are key to our economic prosperity and to the UK’s strategic interests, are competing for the same pool of skilled workers. Without investment in training and apprenticeships, there is a real risk of one sector solving its skills shortage by poaching workers from another sector.

That is why apprenticeships are such an important focus of our report. During our Committee’s visit to BAE Systems—part of which I am proud to say is located in my constituency—we met young people whose expertise and enthusiasm demonstrated the enormous potential of apprenticeships and early career routes in the industry. However, demand for apprenticeship places far exceeds supply, with engineering programmes often attracting many thousands of applicants for a very limited number of places.

Our report highlights the importance of that talent pipeline keeping pace with future demand. This will require the UK and Scottish Governments to work together effectively, as policies impacting the sector span both reserved and devolved responsibilities; defence policy, as we know, is reserved, while education, skills and apprenticeships are devolved. Our report calls on both Governments to work together to increase defence-related apprenticeships in Scotland.

Our report also welcomes direct investment through the defence industrial strategy skills package, through which Scotland will receive a share of the £20 million allocated to the devolved nations. While this funding is absolutely welcome, £20 million is a small fraction of the full £180 million UK-wide package, and it must be shared across Scotland, Wales and Northern Ireland, meaning that Scotland will receive a disproportionately small share of the total UK fund. Our Committee questions whether such a limited share of funding can really shift the dial on skills shortages and calls on the Government to explain how the funding is commensurate with the size, importance and potential of Scotland’s defence sector. We look forward to the Government’s response on that point.

Moving on from apprenticeships, our report also looks at the defence technical excellence colleges, or DTECs, which are specialist colleges designed to provide advanced technical training for defence careers. These colleges will help to develop the skills that employers tell us they need. The Committee heard overwhelming support for DTECs, and we believe they could have the potential to address persistent skills shortages.

The UK Government have proposed two DTECs in Scotland—one in the east and one in the west—and have provided funding for one of them. The establishment of both DTECs is subject to match funding from the Scottish Government. The Committee strongly supports the establishment of both colleges, and stated in our report, which was published last month, that we hoped to see the Scottish Government provide the funding required. We are very pleased that since the publication of our report, the Scottish Government have confirmed that they will provide the necessary funding, with both DTECs now going ahead. This is a positive outcome for Scotland, and reflects the joined-up approach that we need to see.

However, progress establishing DTECs in Scotland has fallen a little behind counterparts south of the border, and we are concerned that further delay risks Scotland being left at a disadvantage. We therefore urge both Governments to work with greater urgency to deliver those colleges, because the skills challenges facing the sector are too pressing for Scotland to miss this opportunity.

Our inquiry also examined the experiences of small and medium-sized enterprises. SMEs form the backbone of Scotland’s economy and play a critical role in the defence supply chain, too. The Committee heard from numerous SMEs, many of which told us that participating in defence procurement remains difficult and that complex bidding requirements, high compliance costs and financial risk are all burdensome barriers to growth.

Our report therefore welcomes the creation of the MOD’s Defence Office for Small Business Growth, which is designed to help SMEs and start-ups to access the defence supply chain and to scale up. It is too early to know whether the office will deliver meaningful change. To help to track its effectiveness, our report calls on the Ministry of Defence to publish clear metrics for success. We also call for the MOD to favour prime contractors that are committed to support supporting SMEs in their supply chain.

During our inquiry, we also heard about the particularly concerning issue of debanking. We heard first-hand accounts of SMEs struggling to access banking and financial services, despite providing products and services that directly support our national security. That is clearly unacceptable. These firms are helping to strengthen our nation’s security. They are creating skilled jobs and driving economic growth, yet some are still being denied access to basic banking services at a time when the Government are scaling up defence capability. Our report calls on the Government to engage directly with the financial services sector to put an end to this problem.

The report highlights wider challenges around public perceptions of defence. We heard concerns that misunderstandings about the sector negatively impact recruitment and discourage talented people from considering careers in defence. Too often, discussion focuses narrowly on weapons and overlooks the engineers, researchers, software specialists, manufacturers and innovators whose work contributes both to security and technological advancement.

The Committee therefore supports efforts to foster a broader national conversation about the defence sector, its role in protecting the country and the opportunities it creates for communities across Scotland. Ultimately, our report reaches a straightforward conclusion: Scotland is exceptionally well placed to benefit from increased defence spending, but unlocking that opportunity will require investment in our young people through apprenticeships, technical education and initiatives such as the DTECs. It will also require the Government to provide certainty for the industry and support SMEs, which are so critical to us.

I thank everyone who contributed to our inquiry and my fellow Committee members for their thoughtful and constructive work throughout. With that, I commend the report to the House.

[Susan Murray (Mid Dunbartonshire) (LD)]

I thank the hon. Lady for her statement and for leading our inquiry. There are around 40 applicants for every apprenticeship and engineering place in Scotland. The UK Government have offered funding for two defence technical excellence colleges, and the Scottish Government have agreed to match that funding. Does she agree that both Governments should continue to work together so that Scotland gets as many apprenticeships as possible?

[Patricia Ferguson]

I absolutely agree with the hon. Lady. We are very grateful that the DTECs are going to happen—all credit to both Governments for working together on that—but apprenticeships will also come through our further education colleges, and it is important that they are given the resources to benefit from jobs not only in the defence sector but, for example, in clean energy, which our Committee has heard so much about.