UK Budget commits £5bn to uncrewed systems and £400m to Army drones, counting AI and cyber spending toward the NATO target

No breakdown yet of the £5bn for uncrewed systems

The national security section of the Budget text (paragraphs 5.27–5.38) says the £300m for StormFighter 'will coincide with broader investment of £5 billion on advanced uncrewed systems over the rest of this Parliament'. The £400m for the Army is to bolster the manufacturing base in South West England and test, evaluation and training activity in Wales. The document does not say how the £5bn is divided between types of uncrewed technology, and its overlap with the drone investment promised in the June–July Defence Investment Plan is unclear. Whether this is new money or a restatement of existing plans therefore awaits the Treasury text and the MoD's explanation.

A regulatory carve-out and an MoD-led regulation unit

The Chancellor said the government will 'legislate for a regulatory carve-out, so that innovative products like drones can be safely tested and rapidly scaled'. The carve-out will form part of the proposed Regulation for Growth Bill, which would give the government powers to temporarily adapt existing rules. A new MoD-led drone regulation unit will work across departments to reduce regulatory barriers and create clearer routes for testing uncrewed and autonomous systems. How the unit will operate and which regulations could be adapted have yet to be set out. Placing a regulatory carve-out alongside the new money indicates that the government sees the speed of testing, the stage before fielding, as a constraint.

Counting AI and cyber spending toward NATO targets

The document reaffirms the path to 3% of GDP on defence in 2030 and 3.5% by 2035 and says the government will draw on all the levers of the state to boost the UK military capability, including the contribution of AI, technology and cyber security spending to the NATO mission. Tony Reeves is confirmed as permanent Director General Innovation for UK Defence Innovation (ring-fenced at £400m a year), with around £30m for digital tools including digital twin capabilities and around £29m for automation and AI. The National Wealth Fund and British Business Bank will deploy up to £5bn over four years into defence, dual-use and related sectors.

For Ukraine, £500m is added for air defences this winter, with £3bn a year in military support maintained to 2030-31. The Multilateral Defence Mechanism with the Netherlands, Finland and Poland moves to treaty negotiations, aiming to be operational in 2027. Counting AI and cyber spending toward the NATO target will feed the debate within the alliance over what defence spending should contain.