--- title: UK Offset Policy description: UK Offset Policy --- [News](https://www.criticalsupply.group/news) # [UK Offset Policy](https://www.criticalsupply.group/news/uk-offset-policy) Written by [UK Government](https://www.criticalsupply.group/news/author/uk-government) | Oct 30, 2026, 2:00:00 AM The UK Offset Policy sets out how the Ministry of Defence will secure additional industrial, capability, and economic benefits for the United Kingdom from selected defence and national security acquisitions from overseas suppliers. The policy will be applied selectively and proportionately. Where it applies, an overseas supplier will enter into a separate Offset Agreement and deliver additional activity supporting UK defence capability, industrial resilience, skills, innovation, supply chains and economic growth. The policy forms part of the Defence Industrial Strategy and the Government’s wider approach to ensuring that defence investment strengthens national security and delivers long-term value for the United Kingdom. #### 1. General principles ##### 1.1 Legal basis This policy applies only where the Ministry of Defence (MOD) is lawfully able to require offset as part of a defence or security acquisition from overseas, as well as exempt procurements (“in-scope acquisition”). It shall be applied in a manner consistent with the Procurement Act 2023, other applicable domestic law, and the United Kingdom’s (UK) international obligations. It is not to be applied where a treaty, binding international arrangement or other legal constraint prevents the use of offset requirements. Nothing in this policy removes the requirement to secure capability, value for money and lawful procurement outcomes. Offset is a separate but linked contractual mechanism intended to secure additional strategic, industrial and economic benefits for the UK from selected acquisitions from abroad. ##### 1.2 Policy objective Offset related to defence and security acquisitions from abroad shall contribute to maintaining and further developing an innovative, resilient and competitive UK defence industrial base that supports national security and economic growth. The policy is intended to help use selected defence capability imports to produce additional enduring benefits for the UK, including greater sovereign capability, supply chain resilience, skills, innovation, exports and UK small or medium-sized enterprise (SME) growth. The Policy will use valuation multipliers to prioritise activity that delivers the greatest strategic value. Eligible projects aligned with published capability, industrial, economic and place-based priorities may receive enhanced credit, directing supplier effort towards outcomes of greatest importance to the UK. ##### 1.3 Policy outcomes The intended outcomes of this policy are to: - maintain and develop strategically important industrial capability, capacity and resilience in the UK - increase inward investment, technology transfer, research and development and innovation aligned to Defence Industrial Strategy priorities - support skills, apprenticeships, know-how transfer and the long-term competitiveness of the UK defence sector - expand opportunities for UK SMEs, mid-tier companies, primes, research organisations and academic institutions - support enduring industrial partnerships and, where appropriate, improve export competitiveness and access to international markets - do so in a way that is targeted, proportionate, accountable, measurable, transparent and consistent with value for money, ensuring no substantial increase in procurement costs and protecting competitive procurement - encourage overseas suppliers to invest and grow their business in the UK ##### 1.4 Procurement authorities This offset policy is established by the Ministry of Defence and applies to MOD when entering into in-scope acquisition of equipment, services, upgrades, sustainment or other defence and security procurements from abroad. ##### 1.5 Responsible authority MOD has overall responsibility for this policy, including its management, application, negotiation and any future policy updates. MOD shall designate a suitably qualified and resourced team with delegated authority to manage the implementation, supervision and administration of offset. This team will be known as the Offset Authority, and more detail will be published prior to applying an offset to defence and security procurements in 2027. The Authority shall: - set and maintain implementation guidance and standard operating procedures - advise acquisition teams on whether and how to apply offset requirements where direct offset is proposed by the supplier - negotiate, approve, administer and enforce offset agreements (OA) - evaluate and approve offset projects, valuations, multipliers and credits - maintain the policy’s strategic priorities and value framework - coordinate with relevant MOD, Whitehall and Arm’s Length Bodies such as Ploughshare, the Office for Investments (OFI) and the Competition and Markets Authority (CMA), as well as stakeholders, including commercial, legal, export, economic and industrial policy functions - monitor delivery, assure compliance and report annually on implementation and results - advise DG International on international offset regimes and the use of reciprocal arrangements to support UK industrial and export interests The Authority may establish reference groups or advisory mechanisms involving the armed forces, industry, academia and other stakeholders to inform strategic priorities, valuation methodologies or specific projects. The Authority shall retain decision-making independence in relation to approvals, valuation, crediting, milestone management and enforcement. ##### 1.6 Principles of application This policy shall be applied in accordance with the following principles: - Targeted: it shall be applied selectively to acquisitions where expected strategic value justifies the cost and administrative burden. - Flexible: it shall allow suppliers to develop economically viable and sustainable solutions within clear strategic boundaries. - Measurable: approved activity shall be capable of verification, valuation and crediting against documented evidence. - Additional: credited activity must be additional to normal business and clearly causally linked to the offset requirement. - Transparent: requirements, processes, priorities and expectations shall be made clear to suppliers early in the acquisition process. - Proportionate: policy interventions, milestones and remedies shall reflect delivery risk, strategic value and value for money. - Collaborative: the policy shall encourage enduring industrial partnerships rather than token or short-term transactional activity. - Well governed: implementation shall be led by an appropriately resourced, suitably qualified and empowered Authority. ##### 1.7 Ethical standards and probity The defence sector and its suppliers are expected to operate to high ethical, professional and compliance standards. The Authority may decline to approve, or may withdraw approval for, projects involving a supplier, third party or UK partner where there are material concerns relating to legal compliance, corruption, fraud, sanctions, national security, conflicts of interest or other serious integrity issues. ##### 1.8 Exemptions and variations MOD may approve exemptions or variations from this policy in justified circumstances. Such circumstances may include, but are not limited to, acquisitions conducted under binding treaty obligations, multinational programmes in which workshare is predetermined, urgent operational requirements, national security sensitivities, market conditions that would make offset disproportionate, or cases where the expected value of offset would not justify the cost or risk. Suppliers cannot request an exemption. At the time of publication of this offset policy, transitional arrangements will be in place to manage the initial operation of this policy as it evolves into full operation. Suppliers entering into 10-year OAs will have their obligations agreed consistent with the policy that is in place at the time. Any future changes to the offset policy will not apply retrospectively, such as changing priority areas and associated multipliers, unless negotiated and agreed between the supplier and the authority. The offset policy to which suppliers will be bound will be the agreement signed and cannot be changed, by the supplier or by the authority, without negotiation and agreement. ##### 1.9 Review and amendment This policy shall be reviewed within 12 months of the effective date and thereafter at intervals of not more than 24 months, or earlier where required to reflect lessons learned, legal developments, changes to strategic priorities or ministerial direction. Read the full policy paper below. Source: UK Government: [https://www.gov.uk/government/publications/uk-offset-policy](https://www.gov.uk/government/publications/uk-offset-policy)  The Critical Supply Group consists of companies and professionals committed to secure and resilient critical supply chains. CSG is managed by [MAP UK & International](https://mapukinternational.com/). For more details, including how to get involved, or to make contact with any of the participating entities, please email [info@mapukinternational.com](mailto:info@mapukinternational.com). 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