On a wet Wednesday morning in April, Ashley Holroyd had a steady but slow stream of customers into his coffee shop in Barrow-in-Furness, an industrial town in northwest England. The cafe, Coffee D’Ash, had been open for only about six months, and it barely filled the cavernous space.
Despite the empty storefronts on the same street, Mr. Holroyd is certain he has a prime location. BAE Systems, Britain’s largest defense company, is planning to open a training facility for hundreds of workers right next door.
Mr. Holroyd, 33, jumped at the chance to expand his coffee business from a trailer into a brick-and-mortar store after he heard about BAE’s plans to move into the town center — crucially, without a cafeteria for the employees.
“If I don’t, someone else will,” he said. “It was a bigger risk not to do it.”
BAE is the major employer in Barrow, where it makes nuclear submarines for the Royal Navy in a shipyard at the edge of town. Like many other defense companies, BAE is in the midst of a rapid expansion because of an increase in military spending in Britain.
Governments throughout Europe are pledging to spend more on defense. They are re-evaluating their military capabilities and reliance on American defense after they became concerned about President Trump’s commitment to supporting Ukraine in its war against Russia.
The British government is increasing military spending to 2.5 percent of the country’s gross domestic product by 2027, and to 3 percent by the end of the decade. This year, the Treasury will spend an extra 2.2 billion pounds ($2.9 billion). But officials want to ensure that the money feeds through to create domestic jobs and generate local prosperity.
The prime minister, Keir Starmer, wants Barrow to be the blueprint for this strategy. Over the next decade, the town will receive £200 million in government funding. For many residents, the money has the potential to be transformative.
BAE, which is flush with orders for a new class of ballistic missile submarines that can launch nuclear weapons and others that strike land targets, is teaming up with the local and national governments to rejuvenate Barrow.
It’s not an altruistic move. A government report in 2023 found that without intervention, the town would not be able to support the expected growth at BAE and other economic opportunities. Something needed to be done to stop a decline in the working-age population, fix infrastructure problems, and attract and retain workers.
Delivering submarines and safeguarding Britain’s nuclear defenses “is not possible without intervening and improving Barrow as a place,” said Phil Drane, the program director of Team Barrow, the public-private partnership.
This model could work around Britain, said Arnab Bhattacharjee, an economist at the National Institute of Economic and Social Research, a think tank in London. The government’s ambitions for higher military spending should reach the poorer parts of the country and not be concentrated in the wealthy areas of London and the southeast, he said, adding that “this has the potential of generating positive effects on the local community.”
But for the money to rejuvenate struggling towns, it must do more than increase household consumption, he said. “What it will require is business coming in.”
Barrow has long played a central role in Britain’s military capabilities, building vessels for the Royal Navy since the 1870s. Today, BAE Systems, which owns the shipyard, employs about 14,500 people there. For many locals, a well-paid job at BAE is the most traditional and highly sought-after career path.
And yet the town suffers in many ways. It scores lower than national averages on health and educational outcomes. Over the past few years, the town center has come to represent decline because of its many boarded-up retailers. Coffee D’Ash’s new home is in a former Topshop, once a popular clothing store, which had sat empty for more than four years.
BAE’s training facility, which will simulate some of the work the company does, including design and engineering as well as office tasks, will move into a former Debenhams, a department store chain that closed in 2021 after more than 240 years of business. In Barrow, the closure of Debenhams and a Marks & Spencer department store seemed to sap the life out of the town center, setting off a domino effect that led to more shops closing.
The facility will not open until the end of next year at the earliest, but some business owners say it is already encouraging more businesses to open nearby.
“It’s a catalyst for more confidence,” said Jenny Fazackerley, who owns a nearby fabrics and sewing supplies store.
A gift shop opened a year and a half ago near the old Debenhams, spurred by the news of BAE’s plans. More stores have followed, including a dessert restaurant coming next month. Independent stores are starting to “reclaim the high street” away from the chains that used to cover the country, Ms. Fazackerley said, but “it’s not going to happen overnight.”
One of the major hurdles facing Team Barrow is how to make the town an enticing place to live as BAE grows.
Barrow is a short drive away from untouched beaches and the mountains and lakes of Britain’s Lake District, a national park. But because it is at the bottom of a peninsula, with only one way in and out, it gets no passing tourist traffic.
And it is also not as picturesque as the towns nearby that have stone walls and cobbled streets, such as Ulverston. It was planned by a Victorian industrialist as it expanded rapidly in the second half of the 19th century, making it less attractive as a place to live to the BAE employees who move to the area.
The contracts for new submarines will keep the Barrow shipyard busy for years to come. BAE is expecting to increase its staff in Barrow by about 20 percent, or 2,500 people, over the next decade or so.
Although the town center is among the top priorities, Mr. Drane said the public investment was also focused on improving health care and educational offerings, to help ensure it attracted families and to develop a homegrown skilled work force. This fall, a university campus is opening in the town on land donated by BAE and financed using money from a previous government grant.
“We’re being ambitious with the level of change that we could be looking at,” he said.
For some, the pace of change has been too sluggish. The £200 million was first promised by the previous government over a year ago. The town had also received other pots of funding in previous years.
“We are the home of defense — what are they doing to secure that future?” said Jenna Strickland, who works in a local hotel. It feels like the money leaves the town on a Friday afternoon when the yard closes, she added, because there are not enough new businesses open or entertainment for young people.
Mr. Drane emphasizes that the government investment is a 10-year commitment, but he also knows the town is impatient for change. Despite long-term plans for housing, education and health care, many residents and business owners call for smaller, more urgent interventions to improve the town center, such as cheaper parking and lower taxes on commercial real estate.
Jackie Maguire, who runs the Hive, a restaurant in town, wants more businesses to open up nearby. People don’t know where to go after they leave the restaurant, she said. For now, she’s planning to open a cocktail bar downstairs where there is currently a home décor and gift shop.
“There’s lots going on in the town, but we’re in the very the early stages,” Ms. Maguire said. “I’m hopeful.”
