The UK government has set out new guidance prioritising domestic suppliers in sectors considered vital to national security, including shipbuilding, steel, artificial intelligence and energy infrastructure.

Under the measures, departments were instructed to take account of economic security and supply chain resilience when awarding contracts, reflecting growing concern over the fragility of global supply networks.

The policy marked the first time ministers had issued explicit direction on protecting domestic capacity across these industries, with the aim of supporting long-term investment and ensuring critical capabilities remain within the UK.

In the steel sector, departments were required to use British-produced materials where possible or provide justification for sourcing from overseas, reinforcing commitments made under the government’s recent steel strategy.

The reforms formed part of a broader package intended to support UK businesses, strengthen supply chains and direct more public spending towards domestic companies. Officials said the changes would complement the government’s modern industrial strategy and align with its wider national security objectives.

Chris Ward, a Cabinet Office minister, said the approach was designed to use public procurement as a lever for economic growth. “These reforms are about supporting British jobs, protecting national security and strengthening our economy,” he said.

Alongside the sector-specific guidance, the government introduced a new “public interest test” for outsourcing decisions. Departments were required to assess whether contracts worth more than £1m could be delivered more effectively in-house, a move expected to cover more than 95% of central government procurement by value.

Ministers said the changes would end what they described as a default reliance on outsourcing and ensure better value for taxpayers.

The reforms also placed greater emphasis on social value. For contracts worth more than £5m, departments were required to set and report annually on goals related to community impact, including job creation, skills development and regional growth.

In addition, new digital tools were introduced to simplify the procurement process, including the use of artificial intelligence to streamline bidding and reduce administrative burdens. A centralised platform was designed to allow businesses to reuse key information across multiple bids, easing participation for smaller firms.

The measures followed the publication of the government’s National Security Strategy, which sought to align economic policy more closely with defence and resilience priorities.

Together, the changes signalled a shift towards a more interventionist approach to procurement, with ministers seeking to balance open competition with the need to safeguard strategic industries.