CSG: UK Critical Supply Bottlenecked by Procurement Red Tape

Supply chain leaders are navigating a difficult climate of global volatility, with energy shocks and trade disruption meaning ensuring operations remain seamless is a challenge. 

Critical National Infrastructure (CNI) is only as resilient as the supply chains that sit underneath it, as outlined in the latest report by Critical Supply Group (CSG). 

The findings in UK Supply Survey & Report 2026, which was managed by MAP UK & International, highlight that despite the UK having underutilised sovereign capability, systemic barriers mean accessing this potential is often not possible. 

Market access barriers

Almost three-quarters (74%) of existing critical suppliers say they would be able to expand into at least one more sector. The areas with the most untapped potential that firms feel they could supply more to include defence (33%), civil nuclear (33%) and space (31%). 

Despite the belief from firms that they would be able to diversify and expand their operations, the report found that 91% of surveyed companies face market access barriers. 

The most frequently cited structural barriers were procurement and tendering complexity (67%) and limited visibility of opportunities (64%). Nearly two-fifths (39%) of those surveyed also noted limited buyer engagement.

"This report sends a clear message: the UK already has much of the capability it needs to build more resilient supply chains, but we are not yet making full use of it,” says Ben Farrell, CEO of the Chartered Institute of Procurement & Supply (CIPS).

“Procurement has a critical role to play in connecting UK capability with commercial opportunity, strengthening national resilience and ensuring that security, competitiveness and growth are considered together.”

SME documentation drawbacks

One key distinction that was noted is that SMEs appear to have lower levels of resilience planning. When looking at the respondent profile, 79% of respondents are micro or small businesses. 

While four-fifths (80%) of large firms have formal documentation of their critical inputs, only 29% of SMEs have done the same. Furthermore, more than a third (34%) said that they were not aware of or were not using GOV.UK information to inform their resilience decision-making, having no clear point of reference or a trusted source. 

John Foster, Chief Policy and Campaigns Officer at the CBI, says that critical sectors need more support: “Businesses are ready to play a bigger role in supporting the UK's critical sectors, but they need procurement processes [that] give capable suppliers greater visibility of opportunities.”

When detailing the response, the report noted that half (50%) of suppliers are leaning into diversification, while 49% are forming strategic partnerships. A smaller portion of respondents (15%) are onshoring or near-shoring production, services or hosting.

Energy dependence for supply chains

Another key headline finding of this survey is that two-fifths (40%) of firms named energy as their single most critical dependency to stay operational, which the report says reinforces “the importance of treating energy as a cross-cutting critical supply chain dependency, with implications for resilience, competitiveness, long-term investment and national security”. Energy was notably ahead of both transport (29%) and communications (19%).

As a result, the next disruption could have notable implications for suppliers. One significant event the report notes is the upcoming UK Carbon Border Adjustment Mechanism (CBAM) coming in January 2027, which it says will levy a carbon price on imported aluminium, steel, and cement. These are materials that manufacturers heavily import.

It recommends: “Treat CBAM readiness as part of supply chain resilience rather than a separate environmental track, and ensure SMEs in particular are supported to prepare for the cost and reporting requirements.”

Adding that British manufacturing has never lacked capability, John Pearce, Chief Executive of Made in Britain, says: “The question isn’t whether we can make it here, but whether we're making the most of what British industry can offer. Global trade will always be essential, but recent events have reminded us that resilience matters.”

The primary recommendation in reaction to these findings to the Government and Tier 1 contractors is to fully leverage the Procurement Act 2023 to simplify pathways and standardise forward pipelines, adding “do not wait for a crisis”.