Treasury silent on defence budget growth concerns

The Treasury has refused to answer questions raised over the nature of the Government’s reported 1.7% growth rate in the Defence Resource Departmental Expenditure Limit (RDEL) presented in the Autumn Budget.

Despite multiple attempts to clarify the specifics of this figure, the Treasury has elected to ignore requests from the UK Defence Journal relating to the increase of the defence budget, leaving questions around the transparency and substance of this budgetary increase.

The focus of the inquiry is the inclusion of “Budget Cover Transfers” from 2023-24, which are now being deferred until 2025-26. This accounting decision has led some to question whether this deferral inflates the future growth rate without necessarily increasing the defence budget with genuinely new funding.

With the Treasury declining to comment, concerns remain about whether these figures fully represent fresh investment.

Budget Cover Transfers involve reallocating funds initially budgeted for an earlier fiscal year to a later one. In this case, funds from 2023-24 are deferred to 2025-26, enhancing the apparent growth rate for that year. By including these deferred funds within the 1.7% growth rate, the Government effectively bolsters the 2025-26 figures, though this doesn’t necessarily translate into new defence investment.

The UK Defence Journal has repeatedly sought answers to key questions regarding these figures. Specifically, we asked the Treasury why the Budget Cover Transfers from 2023-24 are scheduled to apply in 2025-26 instead of 2024-25, whether this timing aligns with the anticipated Strategic Defence Review, and how much of the 1.7% growth rate consists of genuinely new funding versus reallocated amounts.

These questions are aimed at clarifying the nature of the growth rate.

The choice to defer these funds appears to be more than a routine accounting measure; it seems strategically timed to align with the Government’s upcoming Strategic Defence Review. By deferring Budget Cover Transfers to 2025-26, the Government can present a more favourable growth rate in the lead-up to this review, potentially creating the impression of enhanced funding capacity for any new commitments or defence priorities that might emerge.

A response from the Treasury on this point could clarify whether the deferral aligns with broader strategic planning or whether it is simply an accounting choice. Without this transparency, concerns remain about whether the growth rate has been adjusted to present a more favourable budget picture, with significant implications for how public funds are seen to support future defence capabilities.

While deferring Budget Cover Transfers does not reduce available funds for 2024-25, it could obscure immediate needs or constraints. By opting to apply these transfers in 2025-26, the Government avoids any impact on 2024-25’s figures, maintaining a narrative of consistent growth without showing potential limitations or constraints in the near term.

Our attempts to clarify whether this 1.7% growth rate includes genuinely new resources or simply deferred amounts have gone unanswered.

The UK Defence Journal has made several attempts to obtain clarity from the Treasury, but with no response to date. This lack of engagement leaves the public without clear answers on a matter of genuine public interest. While we await Treasury input, these issues remain speculative, but the pattern raises fair questions. Strategic timing of budget adjustments may serve certain ends, yet it also highlights the need for transparency in government reporting. The continued lack of response on this matter only underscores the need for clarity.