The government published its long delayed Defence Investment Plan today. The headline number is £298 billion over four years, with an additional £15 billion above previous spending plans. From 2027/28, the UK will spend 2.7 percent of GDP on core NATO defence, making it the alliance’s third largest cash spender behind the United States and Germany. The target is 3 percent in the next Parliament. Starmer told the Commons the plan takes the UK to 4.2 percent of GDP on defence and national security combined, and said he would report the figures at next week’s NATO summit.
The money is going to nuclear deterrent renewal (£64 billion for new submarines, a sovereign warhead and 12 F-35A jets), a new stealth fighter jet with Italy and Japan under the Global Combat Air Programme (£8.6 billion), munitions and stockpiles (£11 billion including at least six new energetics factories by 2030), drones and autonomous systems (£5 billion, the UK’s largest ever investment in drone warfare), and space capabilities (£3.2 billion).
The problem is not the spending commitments. It is the gap underneath them.
Of the £15 billion in additional funding, £10.3 billion has been identified. £4.7 billion has not. The government says that money will be confirmed at Budget 2026 in a fair and balanced way.
The National Audit Office estimated in December 2023 that the MOD faced a £16.9 billion shortfall in its equipment plan, with a range of £7.6 billion to £29.8 billion depending on assumptions. The Defence Investment Plan does not explain how that pre-existing gap has been closed.
Defence decision makers will now be made accountable to the MOD Permanent Secretary on budget management, with annual delivery updates to Parliament, and a £250 million fraud recovery target by 2029/30.
The funding that has been identified comes from cuts elsewhere. Dan Jarvis, who replaced John Healey as Defence Secretary after Healey resigned over the scale of the settlement, told the Commons that all departments were asked to contribute 1 percent of their capital budgets from this year, while those with larger resources, the DfT roads budget and DESNZ, were asked to make further contributions. Road and energy projects will be mothballed. The Department for Energy Security and Net Zero will find £2 billion in savings while maintaining what the government says is the fastest growing capital budget of any department. The Department for Transport will explore limited reductions to as yet uncommitted roads funding, though the government says pothole repair funding, rail investment and bus and rail services are protected.
Starmer described it as game changing. Badenoch said spending was spiralling out of control. The reality is somewhere between the two. The UK is spending significantly more on defence than it was 18 months ago. It is not spending as much as the NATO commitment demands. The £4.7 billion funding gap means the next chancellor, presumably under Burnham, will have to find the money at a Budget that will already be under pressure from every other department that just had its capital budget cut by 1 percent to fund this plan.
A Defence Investment Plan that cannot identify where a third of its new money comes from is not a plan. It is a statement of intent with an IOU attached.