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Hampshire Digital Transformation Flexible Fund
A strategic proposal to establish a targeted digital transformation fund for Hampshire's high-value sectors, adapted from the proven Northern Ireland DTFF model
The Strategic Opportunity
Hampshire's Digital Transformation Challenge
Hampshire's economy comprises 77,200 enterprises generating £69.5bn GVA, anchored by nationally significant strategic sectors. Aerospace, defence, maritime, and advanced manufacturing form complex, integrated supply chains that demand sophisticated digital transformation capabilities.
These high-value sectors face a critical digital capability gap that threatens supply chain competitiveness and national strategic capabilities. Basic SME digitisation programmes cannot address the complexity of enterprise systems, IoT integration, and advanced automation required by Hampshire's strategic industries.

Critical Context: Hampshire hosts nationally critical supply chains where digital transformation protects UK strategic capabilities and competitive advantage
77.2K
Enterprises
Across Hampshire's diverse economy
£69.5bn
GVA Generated
Annual economic output
682
Maritime Businesses
Concentrated sector strength
36.2%
High-Skilled Workforce
Foundation for digital adoption
Proven Model: DTFF Northern Ireland
Track Record of Success
The Northern Ireland Digital Transformation Flexible Fund has demonstrated exceptional delivery capability, deploying £5.9m across 366 businesses through five competitive calls. Operating with grants ranging from £5k-£20k and a 70% grant/30% match funding model, DTFF NI successfully accelerated digital transformation across the region's economy.
The programme focused on broad support for small and micro businesses, proving the delivery model's effectiveness and creating a ready-to-adapt framework for Hampshire's more strategic context.
£5.9m Deployed
Across five competitive funding calls
366 Businesses
Successfully supported with digital grants
£5k-£20k Range
Flexible grant amounts per project
70/30 Model
Grant coverage with business match funding
Key Learning: Proven delivery model ready to adapt for Hampshire's strategic sector requirements and higher-value digital transformation projects
Hampshire DTFF: Targeted Strategic Model
Higher Impact, Strategic Focus
Hampshire's DTFF adopts a quality-over-quantity approach, targeting SMEs within strategic sectors and their integrated supply chains. This model delivers fewer projects but achieves greater economic impact through sophisticated digital transformation in aerospace, defence, maritime, and advanced manufacturing.
Capital Investment Focus
Grants for advanced digital infrastructure and enterprise technology systems
  • Enterprise software platforms
  • IoT and automation systems
  • AI/ML integration
  • Supply chain digitisation
Strategic Targeting
Hampshire SMEs in nationally significant sectors
  • Aerospace clusters
  • Defence supply chains
  • Maritime industries
  • Advanced manufacturing
Enhanced Terms
Reflecting transformation complexity
  • £10k-£50k grant range
  • 60% grant coverage
  • 40% match requirement
  • Competitive selection
Fewer Businesses
80-100 projects versus NI's 366 - proportional to Hampshire's scale and focused on strategic sectors
Higher Average Investment
£40k per project versus NI's £16k - reflecting complexity of enterprise digital transformation
Greater Strategic Impact
National economic significance through supply chain competitiveness and strategic capability protection
Strategic Alignment: Hampshire's Unique Position
Addressing Hampshire Priorities Through Strategic Sectors
High Potential Sectors & Clusters
Direct support for aerospace, defence, maritime, and advanced manufacturing concentrations. Farnborough Aerospace Consortium and Maritime UK Solent represent nationally significant industry clusters requiring sophisticated digital capabilities.
Business Support Excellence
Sophisticated digital transformation enabling competitiveness beyond basic digitisation programmes. Enterprise-level systems and advanced automation position Hampshire businesses as supply chain leaders.
Infrastructure Development
Advanced digital infrastructure embedded throughout strategic supply chains. IoT integration, blockchain traceability, and digital twin technology create competitive advantages across interconnected businesses.
Skills & Employment Growth
High-value digital skills embedded within transformation projects. Advanced technical capabilities developed through enterprise system implementation and automation deployment create sustainable employment quality improvements.
Hampshire's Competitive Advantage
Nationally significant sectors concentrated in Hampshire mean digital transformation here delivers national economic impact. Strategic capabilities in aerospace, defence, and maritime are critical to UK competitiveness and security.
Alignment With Government Strategy
Direct Policy Alignment
Hampshire DTFF directly supports the UK Modern Industrial Strategy's IS-8 priority sectors - Aerospace, Defence, Advanced Manufacturing, and Creative Industries. Hampshire's concentrated strengths in these sectors position the county as a strategic delivery partner for national industrial objectives.
The programme aligns with Hampshire Economic Strategy 2025-27 priorities: innovation, productivity enhancement, and sector cluster development. Through the Six Capitals Framework, investments build knowledge capital through innovation and physical capital through digital infrastructure.
01
UK Modern Industrial Strategy
IS-8 sectors alignment: Aerospace, Defence, Advanced Manufacturing, Creative Industries
02
Hampshire Economic Strategy 2025-27
Innovation ecosystems, productivity growth, strategic sector clusters, Functional Economic Area benefits
03
Six Capitals Framework
Knowledge capital enhancement through innovation; physical capital development through digital infrastructure
04
County-Wide Economic Impact
Functional Economic Area approach ensuring benefits across Hampshire's integrated supply chains

National Significance: Hampshire hosts nationally critical supply chains. Digital transformation here protects UK strategic capabilities in defence, aerospace, and maritime sectors essential to national security and economic competitiveness.
Sources: UK Modern Industrial Strategy, Hampshire Economic Strategy 2025-27
Expected Core Benefits: Quality Over Quantity
8-Year Strategic Projection
£4m Programme Investment
Strategic, high-value digital transformation approach delivering measurable economic impact through sophisticated capability development in nationally significant sectors.
Direct Business Impact
  • 80-100 businesses supported with higher-value projects (avg £40k vs NI's £16k)
  • 400-500 FTE jobs created in higher-skilled, higher-productivity roles
  • £25-30m growth in business turnover from strategic sector premium
Capability Development
  • 200-300 learners achieving advanced digital skills qualifications
  • £2.7m private leverage through 40% match funding requirement
  • Enterprise systems adoption accelerated
Supply Chain Multiplier
  • 300-500 businesses enabled through integrated supply chains
  • Ripple effects across connected sectors
  • National competitiveness protection in strategic industries
Productivity Multiplier Effect: Hampshire's £69.5bn GVA and strategic sector concentration mean each £1 invested delivers greater economic impact than generalist SME support. High-value sectors generate premium returns through supply chain integration and national significance.
Programme Budget: Focused Investment
Total Programme Value: £6.7m
£4.0m
LEP Legacy Reserve funding requested
£2.7m
Business match funding (40% requirement)
£200k
Administration costs (5% efficient delivery)
Three-Year Deployment Timeline
1
Year 1
£1.2m deployed
30 strategic projects launched
2
Year 2
£1.6m deployed
40 projects at peak delivery
3
Year 3
£1.2m deployed
30 projects completing portfolio
40%
Match Funding
Demonstrates business commitment to transformation
60%
Grant Coverage
De-risks complex technology adoption
Average Project Investment
£40k per project reflects the complexity of digital transformation in strategic sectors. Enterprise software systems, IoT integration, AI/ML platforms, and advanced automation require substantial capital investment beyond reach of typical SME budgets.
Supply chain digitisation platforms and enterprise resource planning systems demand sophisticated implementation, justifying higher average grants than broad-based programmes.

Proportional Scale: Hampshire is smaller than entire Northern Ireland. This programme is appropriately scaled whilst targeting higher strategic value through sector concentration and transformation complexity.
Delivery Model & Governance
Partnership Structure for Strategic Delivery
Business Engagement
Hampshire Chamber of Commerce leads sector outreach, application support, and business readiness assessment
Sector Expertise
Farnborough Aerospace Consortium and Maritime UK Solent provide technical assessment and industry validation
Technology Capability
University partners deliver technology expertise, evaluation frameworks, and skills development support
Economic Coordination
Local authorities coordinate economic development priorities and ensure county-wide benefit distribution
Governance Framework
  • Hampshire Prosperity Partnership Board provides strategic oversight and accountability
  • Technical assessment panel comprising sector experts evaluates applications
  • Quarterly reporting to HPPB ensures transparency and performance monitoring
  • Independent evaluation tracks benefits realisation against targets
Competitive Selection Criteria
  1. Strategic sector alignment (aerospace, defence, maritime, advanced manufacturing)
  1. Supply chain impact potential and integration benefits
  1. Digital maturity assessment and transformation complexity
  1. Business commitment demonstration (40% match funding)
  1. Skills development component and workforce capability
Delivery Efficiency: Leveraging the established DTFF model reduces setup costs, minimises implementation risk, and accelerates programme launch through proven frameworks and processes.
Capital Expenditure Focus: Eligible Investments
Strictly Capital Digital Infrastructure
All funding targets capital investments in advanced digital technologies that create lasting competitive advantages for Hampshire's strategic sectors. Revenue costs, ongoing subscriptions, and operational expenses are explicitly excluded to ensure permanent capability development.
Hardware & Systems
  • Advanced manufacturing equipment with digital integration capabilities
  • Industrial IoT sensors and automation control systems
  • Server infrastructure and enterprise network equipment
  • Cybersecurity hardware platforms and protection systems
Enterprise Software (Capital Licences)
  • Enterprise Resource Planning (ERP) platforms
  • Product Lifecycle Management (PLM) systems
  • Supply Chain Management enterprise solutions
  • Computer-Aided Design/Manufacturing (CAD/CAM) software
  • AI/ML platform implementations and machine learning tools
Digital Infrastructure Platforms
  • Cloud infrastructure migration (capital implementation costs)
  • Digital twin technology and simulation platforms
  • Blockchain systems for supply chain traceability
  • Advanced data analytics and business intelligence platforms

Explicitly Not Funded: Revenue costs including staff salaries, training delivery expenses, ongoing software subscriptions, consultancy fees, and operational expenditure. Capital focus ensures permanent asset creation and lasting competitive capability.
Additionality & Strategic Value for Money
Why LEP Funding Is Essential
Market Failure Addressed
SMEs within strategic supply chains lack the capital reserves for sophisticated digital transformation. Projects averaging £40k+ exceed typical SME investment capacity without grant support, creating a critical capability gap.
Complex technology adoption carries substantial implementation risk that private finance cannot adequately de-risk. Enterprise systems require significant upfront capital before benefits materialise, deterring investment without public support.
No Alternative Funding Sources
Existing national schemes focus on R&D innovation (UKRI, Innovate UK) rather than supply chain digital transformation. Basic digitisation programmes cannot address enterprise system complexity required by strategic sectors.
Why Hampshire Investment Delivers Exceptional Value
1
Sector Concentration Multiplier
682 maritime businesses, Farnborough Aerospace cluster, and defence prime contractors create integrated supply chains where digital transformation generates cascading benefits. One business's capability upgrade enables multiple connected suppliers.
2
Productivity Baseline Advantage
Hampshire's £69.5bn GVA and 36.2% high-skilled workforce provide strong foundations. Investments build on existing capabilities rather than creating basic competence, delivering higher ROI per £1 invested than generalist programmes.
3
National Significance Impact
Hampshire hosts critical UK supply chains for aerospace, defence, and maritime sectors. Digital competitiveness here has national security and economic implications beyond local benefits.
4
Strategic Policy Alignment
Direct support for UK Industrial Strategy IS-8 sectors where Hampshire demonstrates established strengths and competitive advantages in concentrated geographic clusters.
5
Enhanced Leverage Effects
40% match funding requirement plus supply chain ripple effects mean every £1 of public investment generates £3+ of total economic activity through direct projects and enabled businesses.
No Programme Duplication: This fund occupies a distinct market position. National programmes target R&D and innovation, not supply chain digital infrastructure. Regional support focuses on basic digitisation, not enterprise complexity. Hampshire DTFF addresses an unmet need in strategic sector transformation.
Timeline & Next Steps
Programme Timeline
Design & Setup
Q1-Q2 2026
Partnership formation, detailed programme design, selection criteria finalisation, governance establishment
Programme Launch
Q2 2026
Official launch event, first call for applications opens, stakeholder engagement campaign
Delivery - Call 1
Q3-Q4 2026
30 projects approved, £1.2m deployed, initial cohort implementation begins
Delivery - Call 2
Q1-Q4 2027
40 projects at peak delivery phase, £1.6m deployed, mid-programme evaluation
Delivery - Call 3
Q1-Q4 2028
30 projects completing portfolio, £1.2m deployed, final cohort implementation
Benefits Realisation
2029-2033
Ongoing monitoring, impact evaluation, case study development, lessons capture
Immediate Next Steps (If Approved)
01
Governance Finalisation
Complete partnership structure and legal agreements
02
Assessment Panel
Recruit sector experts for technical evaluation
03
Selection Methodology
Develop detailed criteria and scoring frameworks
01
Monitoring Framework
Design quarterly reporting and evaluation systems
02
Stakeholder Engagement
Launch consultation with clusters, chambers, universities

Application Deadline: LEP Legacy Reserves call closes 16 January 2026