The Ministry of Defence (MoD) is set to receive a £2.9 billion increase in its budget, announced by Chancellor Rachel Reeves in her first budget speech.
The Labour government reaffirmed its commitment to long-term defence investment, aiming to gradually raise spending to 2.5% of GDP—though a timeline for this increase remains undetermined.
Addressing the House of Commons, Ms Reeves highlighted the government’s focus on bolstering national security.
“There is no more important job for the government than to keep our country safe,” she stated. This funding boost is intended to ensure the UK continues to meet and exceed its NATO commitments, and Ms Reeves reiterated that the government would maintain £3 billion in annual military support for Ukraine.
Additionally, Ms Reeves outlined allocations for upcoming commemorations, including remembrance services for the 80th anniversary of VE and VJ Days next year.
While details of the allocation within the MoD are yet to be specified, the increase aligns with the government’s ongoing Defence Strategic Review, expected to conclude next year. The review is anticipated to inform future defence priorities and spending plans.
The Chancellor’s broader fiscal plan aims to address economic challenges, including a £40 billion tax increase aimed at stabilising the economy. The government plans to tackle a £22 billion deficit attributed to previous administrations and raise funds through measures such as increasing employers’ national insurance contributions starting in 2025.
Obviously this is good news, and we will take the win, however this extremely modest increase will barely make a difference to the issues our armed forces are facing, unless these additional funds are directed to a specific task.
Spot On – its a “political” increase but several billion per year short of avoiding significant “restructuring” in the forthcoming Defence Review
Split between three services, and the myriad other claims on defence, this is miniscule amount. Will not even be noticed.
It’s around a 5% increase. That is a noticeable amount. It’s a start, let’s see what happens from here.
For a budget already about £5Bn per year underfunded = wake up!
How is a increase not going to help with that. To me it was a major surprise considering how bad the public finances are in.
Clear intent that the current government actually intend to increase to 2.5% unlike the last which just talked about it and did nothing.
as 1 type 45 costs over 1 billion and a single chally 3 costs 6.7 mil a euro fighter 110mil… this is just a blag our army needs new entire regiments of personnel and equipment the navy needs at least a dozen extra escorts and subs the army needs modern theater air defense etc etc etc people have lost sight of a governments primary function, security of the state
Considering the MOD has a 16.9Bn deficit how much will get swallowed up in that and how much is actually likely to be spent on extra over and what has been planned? Nothing would be my guess.
It doesn’t have a shortfall, yet. That number was from the latest 10 year equipment plan for which the RN changed its basis of calculation. In contrast to the previous years plan, it included the full cost of T32, T83, MRSS, MROS and FAD, none of which have yet even reached final design stage.
Ummm…sorry, FAD?? Fleet (Air? Arctic? Antarctic? Auxiliary?) (Defence? Deployment?). Perhaps FSS? 🤔
Signed/
Clueless in the Colonies 😁
FAD sort of translated to T83.
But the tea leaves could still….
Understood, thanks.
I assume it means Fleet Air Defence.
That’s just my guess, though.
Yes, my first thought was that this might have been simply a trendy, transitory programme of the RN…😉
Should read FADS I think, Future Air Dominance System
It’s the system of system for naval air defence of which T83 is the main component.
Ahhh…thanks! 👍😊 Actually had seen that version of the acronym previously.
Future air dominance system. Linked to future T83 but not confined to it.
👍
Exactly.
You can’t have a budget hole when a budget line hasn’t been allocated to the spending.
If no allocation and no contracts are sign it is just a wish list.
In this case a wish list costed to high level only.
Thank you for that and please excuse my ignorance.
It’s also based on projects all going badly. The predicated shortfall is a range based on how badly the projects go plus exchange rates etc. It’s not as simple as stating there is a shortfall.
good news as long as it is spent and promoting UK industrial base, instead of depending too heavily on foreign equipment which gradually turns into a death spiral for local industry and know how.
Just watched the budget and when she said 2% cuts across nearly every dept my heart sank. But then she snuck this one in so I’ll try some sums 🤔 If 2024 Budget is £55.6 billion then an extra £2.9 billion is a 5.2% increase oa (not adjusted for inflation). If the £3 billion for Ukraine is external to the MOD budget then it’s actually IMHO not too bad. Health, Education, Transport and Defence all got a bump upwards. I’m actually pleasantly surprised as I was expecting zero or a cut ! Still means the SDR is going to be… Read more »
Many believe that our Ukraine support is coming from the MoD budget, even though it should not be. If that is true then Reeves’ £2.9Bn ‘gift’ to MoD will go straight to Ukraine.
Perhaps restock what we have given away to others would be welcome as the weapons have proved to more than capable of the jobs wanted. Just need mass to make them worthwhile.
At least its not a cut as many expected.
But the MOD needs to spend smarter on what it buys.
Would be great to get some worthwhile uniforms not made in China that last no time at all compared to what we had. The RM’s went and got some good kit that meets their needs and high standards compared to what the rest have.
Happy if we spend that £2.9Bn on restocking for our armed forces.
I agree MoD needs to spend smarter. Far too much going for provision of a service provided by a middleman contrator, when it was formerly done in-house.
No it won’t, the women said £3 billion will be maintained indefinitely for Ukraine. That money was in last years budget so an increase of £2.9 billion can’t go to Ukraine or it would not be an increase.
The Ukraine money comes from government not the MOD but it can be counted against NATO spending of 2% of GDP.
Ukraine funding is why we are spending 2.3% of GDP on defence when the government is only committed to 2%.
Weren’t we spending 2.3% of GDP on defence even before the Ukraine war started, though?
No we were getting as low as 1.97%
I think its $2.93b from interest earned on frozen Russian assets.
OK. Thanks.
Hi Graham, I have re read her speech several times and I still can’t decide if it’s a rise to include the £3 billion for Ukraine or on top of that as well ! It’s the way it’s worded, I seriously think someone needs to ask her to clarify it.
I think it should be overseas aid myself 🤔
I agree, SDR will be challenging but atleast it’s being conducted against a background of an increasing budget that’s been long term protected instead of a cuts exercise dressed up as strategy.
We need to ask some pretty serious questions as well of the military. We spend a vast sum of nearly £60 billion a year, most of the legacy programs are out of the door, why do we still have so many budgeting issues.
Look what countrie like Finland achieve on 10% of our budget.
What does Finland achieve on 10% of our budget?
A standing army of less than 5k. A Navy that consists of 8 surface combatants none of which break the 500t mark.
We tend to get enamored by the Finnish mobilization plan, and their ability to call up forces for a defensive war of survival, but lets not kid ourselves about what they give up to achieve that plan.
They do have a whole shit load of mortars mind..pretty sure they have more mortars per head of population than any other nation on earth.
Because they’re cheap, easy to keep stored, and you need to provide indirect fires to a lot of relatively static defence forces. As I said, we love to look at Finland’s strengths and go “wow” but turn a blind eye at what they sacrifice to achieve it.
Indeed they are not ever doing anything expeditionary and need others to ensure their national interest globally…I suspect that is why in the end they made the move to NATO…if they ever had a spat with Russia, Russia could have formally undertake a longer range blockade and they would have struggled to do much about it. It would be a hard nation to attack and overrun with ground forces…but they had a weakness to a nation applying wider geostrategic pressure and sub war kinetic and none kinetic operations.
Finland is focussed on territorial national defence. We have a global role.
Good analysis there ABC. Looking at the figures, as best one can work out, the core defence budget (i.e. omitting the Ukraine spend) will increase from £51.7bn to £54.6bn, a rise of 5.6%. Pleasantly surprised by that, when most departments are having to take small reductions. It is a start. With the Ukraine spend, which looks to work out at £3.76 bn, our defence spend, in NATO terms, is £58.36bn. The total spend is likely some way below 2.3% of GDP. There are many guestimattes as to what 2024 GDP will be come end March next year. The best guess… Read more »
Great post. You are right about how that £2.9bn is probably going to be spent.
Better than nothing. They real news for the Armed Force’s will come early next year with the SDR.
No doubt all sucked up by Trident and replenishing ammunition stocks given to Ukraine.
Ukraine is where it’s doing the most good, if we have to choose just 1 place. But I think Reeves’ announcement for Ukraine and wider defence were 2 separate commitments anyway. I’d use it to fix the RFA issue and reinstate our E7 order to 5 units.
A positive, and still people find a way to play it down.
She could have given nothing at all….
It’s extraordinary, it’s like people don’t actually listen to the news. Announced last night, this is to fund the pay rise and replenish stock given to Ukraine. It maintains funding at 2.3% of GDP.
Indeed. There are many projects underway and funded that will reach FOC by @ the end of the decade.( Ch3, Boxer, Ajax, new SPG, T31, T26, more F35 and of course AUKUS). So I struggle to see why another defence review is necessary. Whatever it decides, unless it is further cuts, wouldn’t make any difference for years. Whilst I expect that the budget will be sustained, I doubt that any increase will be big enough to change materially what is already in the pipeline.
Yes.
Any increases are limited and to niche targeted areas only.
2 more E7.
6 more A400
3 more T31 as a T32 or a B2.
That sort of thing.
We are not suddenly getting 500 Ch3, neither do we need that many.
Agree 100%, we don’t have the manpower either as the current youth don’t want to work hard or get dirty anymore and even bigger wages will not change that much.
Hmm?
No experience of youth not wanting to work here, majority of friends (not me) have side jobs on top of A levels and most discussing pay and when they can fit hours in.
Granted, it’s mostly working in Coop, but no sign of a “lazy generation” as some seem to fear.
Don’t worry. If you look back throughout history every generation makes the same complaints about “the current youth not wanting to get their hands dirty.” The Cold Warriors wouldn’t shut up about Millennials being too soft to fight until suddenly they fought several wars in the middle east (much to the chagrin of the Cold Warriors who’d sat in the BAOR for their whole career). If you look at 1939 there where plenty of old has beens who complained that the youth of the 30’s didn’t have the moral backbone to fight like the Lions of the trenches had. Happens… Read more »
Indeed. there were articles in the DT all the time in the early 1990s from (mainly) ex Army and RM’s say the forces of today couldn’t do the Falklands again etc and then fast forward to 2001 onwards
Apparently there are records from Ancient Greece with elder statesmen in Athens complaining about the layabout youth in the city. Certainly not a new issue.
Hits differently when one of the people being talked down is you, though.
On the bright side, it gets better as you get older, and eventually you get to be the curmudgeon shouting about today’s youth at some point.
Is that what the mass immigration is for, to do the jobs our “lazy yoof” won’t do? The “even bigger” remark on military wages is telling too. You’re a retired welfare queen aren’t you?
From what I’ve read its retention that’s the issue. Plenty of recruits.
I’ll happily give up 6 more A400M is we can get a theatre level GBAD and ABM. Even just four or five batteries to deploy at division level and base at Faslane and Lossimouth
Yes, I’d make that switch as well.
Well it may be nice to get 200+ challenger 3s…that one would not surprise me if it happened. Because those CH3s are cheap as chips and a bit of an easy win. They really need to consider what IFV the British army can get cheap, APCs and mec infantry are not what’s needed for the armoured brigades. I think we will see another T31 batch ( it’s not only needed it’s good union jobs and shows investment in economic growth). E7 is a no brainer really A400..I’m not sure on that one, we should but.. I don’t think we will… Read more »
I’d happily accept the army continuing with six Boxer Battalions if it meant we got a 3rd Challenger Regiment.
Yes that would probably be a sacrifice worth having, going down to 2 challenger regiments is a really bad idea.
Well it may be nice to get 200+ challenger 3s…that one would not surprise me if it happened. Because those CH3s are cheap as chips and a bit of an easy win. They really need to consider what IFV the British army can get cheap, APCs and mec infantry are not what’s needed for the armoured brigades. I suspect the army is going to get a focus a way from expeditionary forces and a focus on heavy forces for the European theatre. I think we may see the loss of 11 brigade to facilitate this. Navy wise, I think we… Read more »
Not sure if you saw my post to Graham the other day.
Apparently the Army are looking seriously at ARES as the IFV, with a corresponding reduction in the third Boxer tranche.
UKAFC reported this on X the other week.
I’m in agreement on your points and I’d take that right now.
Ares as an IFV, that would be pretty significant, I would vote for that one.
I would suggest they focus on a small increase in personnel numbers across the services, improving accommodation and training facilities plus another uptick in pay. These would all help with recruitment and alleviate retention issues. The first no brainer is a competitive salary for the RFA and then get rid of Capita. BTW the list is about right and I would suggest another 100 or so Ch3 would suffice. The next stage is to secure funding for the future equipment programme and the output of the SDR, which needs to be a true defence needs review and not one whose… Read more »
Evening M8, have you read Ben Wallace’s comment on X ? He congratulates John Healey in getting an increase and goes on to blame repeated cuts by both Tory and Labour. A true Officer and Gentleman.
No. I’ll look for it though.
I very much suspect this is more about taking the time to analyse the threats..if you look at the last 14 years we have had more reviews than at any other time..that’s not really a reflection of the fact the Conservative Party loved reviews, it’s more about the complete toilet flush that has become the geopolitical and geostrategic picture. We are seeing profound changes in geostrategic pictures by region and the world geopolitical picture within a couple of years…essential every time the last conservative executive did a review it was out of date within a couple of years…simply put we… Read more »
My point was that so many projects are locked in with many running until 2030, that unless you are willing to raise the budget a lot, no review will make a material difference. Even if extra funding is agreed, it will take years for it to feed through to increased capability, as Germany has found.
well what you can do is redirect what you have to the threats you have…look at 11 brigade..is that now more or less useful than using the manpower to beef up the heavy brigades and mech brigades that may end up deterring Russian in Europe. There are a number of questions…the question of escort numbers…if they are going above 19 those orders need to be made sooner not later. Yes a lot of stuff will not be changes until later in the decade or early next decade..but that needs looking at now not at the end of the decade. Also… Read more »
A defence review is necessary because we have a new flavour of Government, but it should not take as long as this one is going to take.
Agree, honestly she could have announced defence spending was doubling and people would still be complaining.
No we wouldn’t but if she has just announced what was going to happen anyway nothing new has been acheived.
She could have raised it to 3% of GDP (around £75 billion) and people would still moan that it’s not 4 or 5%.
Agree a 5% increase in budget is actually better than I thought considering.
Side note:
Best botched insult of the year was directed at me.
Buddleja? Magnolia? 😆
I want a shrubbery!
Oo err.
Honestly, Moscow’s really skimping on the quality of their trolls these days.
Is this extra money or the £2.9 billion already planned by the Tories? Their budget forecast was for defence spending to move from £54.2 billion to £57.1 billion, coincidentally £ 2.9 billion. If there is no extra she has just annouced what was coming anyway..
Even maintaining a Conservative policy for defence is shocking. This is extremely good news.
Except as the OBR report pointed out they hadn’t actually funded it, so it was a worthless promise. It was a very sensible way to deliver an uplift, Labour has now funded it.
I have a funny feeling they may just follow through with all of that plan 🤔
Unfortunately for your argument the treasury itself actually confirms that the £2.9 billion for defence was actaully funded so my point is valid. This is NOT new money. Don’t believe me? Fine. Look it up for yourself. 😏
Easy to make unfunded plans when you know you don’t have to find the money.
Jim, please see my answer to ABC.. Cheers.
Not good, not bad. A holding action really.
Hi guys, the fire at Barrow..any idea if it was an accident, sabotage or a drone strike?? Cheers
Maybe try the comment thread in that article?
I am very suspicious, is this because of inflation or on top of inflation? Does the money for Ukraine come out of a separate budget or the Defence Budget.
So that increase would be minus the increased national insurance costs?
Basically a freeze in defence spending in real terms. Inflation and pay increases will eat most of it. Better than cuts I suppose.