Commons Sense

House of Commons · Written Ministerial Statement

The Implementation from 1 April 2026 of New Profit Rates for Single Source Defence Contracts

16 March 2026 · Ministry of Defence

Proposed by Luke Pollard Lab Plymouth, Sutton and Devonport

Defence

Summarised by AI from the official record, so it can contain mistakes.

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At a glance

Key points

  • The Secretary of State has accepted the SSRO's recommendation to set the baseline profit rate at 9.10% for financial year 2026/27.
  • The new profit rate will be effective from April 1, 2026, for single source defence contracts.
  • The government is also progressing with a review of Single Source Contract Regulations.

Issue summary

The statement addresses the new profit rates for single source defence contracts to ensure a fair return for suppliers while maintaining value for taxpayers.

Action requested

The Secretary of State has accepted the SSRO’s recommendation to set the baseline profit rate at 9.10% for financial year 2026/27, an increase from 8.56%, effective April 1, 2026. The government is also progressing with a review of Single Source Contract Regulations.

Key facts

  • The baseline profit rate for single source defence contracts in 2026/27 will be set at 9.10%.
  • This represents an increase of 0.54 percentage points from the previous year's rate of 8.56%.
  • The new rates will come into effect on April 1, 2026.
  • The review of Single Source Contract Regulations is part of the Defence Industrial Strategy.
  • Workshops with industry and the SSRO have already taken place.
  • Table 1 outlines the recommended profit rates for 2025/26 and 2026/27.
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