Almost a third of the £15 billion increase at the heart of the Defence Investment Plan has yet to be pinned down and will only be settled at the autumn Budget, the Chancellor’s funding statement showed.
In a written statement setting out how the money would be raised, Rachel Reeves said that of the £15 billion, £10.3 billion had been identified now, with a further £4.7 billion over the four years to be confirmed at Budget 2026, which she said would be done “in a fair and balanced way.” The remaining sum is not a marginal one, amounting to close to a third of the headline figure, and it is the part of the package for which the savings have still to be named.
The timing sharpens the point, because the figures published with the statement show the money still to be confirmed is weighted towards the early years, with £1.8 billion of it falling in the current 2026-27 financial year before tapering to £1.1 billion, £1.0 billion and £0.9 billion across the three years that follow. The single largest slice of the still-to-be-settled money is therefore needed first, in the year already under way, with the Budget meant to confirm it still months off.
The statement set out, in general terms, how that gap is to be closed, with the Treasury saying departments would find efficiencies, cancel or delay lower-priority programmes and sell assets including underused land and buildings, drawing on what it put at £1.9 trillion of holdings across government. The detail is left for later, with the statement noting that departments would bring forward their plans in due course, and that even some of the savings already counted, the up to £700 million from roads budgets at the Department for Transport and the £2 billion from the Department for Energy Security and Net Zero, would not be fully set out until the autumn.
The government has set out more of where those savings would fall, and its case is that they come from lower-priority and not-yet-committed work rather than from frontline services. A funding explainer published alongside the statement said departments had been asked to find “1p in every £1” of their capital budgets from this year, and that the Department for Transport’s contribution would come partly from a consultation on cuts to its third roads investment strategy, among them the possible cancellation of the A38 Derby Junctions and A46 Newark Bypass schemes, which it said had yet to enter contract and were less far advanced than other projects, with stakeholder consultations to be held before any decision is taken.
The paper said funding to fill potholes, to maintain local roads and to build rail projects including Northern Powerhouse Rail would be protected, and that the energy department would find its share while, it said, continuing to support renewable and nuclear construction. The Treasury described the choices as tough but necessary, and said they had been made without drawing on day-to-day spending for frontline services, characterisations that will be tested as the consultations run and the detailed plans appear later in the year.
The reliance on asset sales is itself loaded into the later years and carries its own uncertainty, since the figures show land and buildings raising nothing in the first year and then £0.3 billion, £0.3 billion and £0.5 billion in the years after, money that depends on finding buyers at the right price for property the government has not yet identified. That places a portion of the funding beyond the Treasury’s immediate control, resting instead on disposals that have still to be lined up.
Beyond the four-year package, the larger ambitions in the plan rest on decisions not yet taken. The commitment to spend 3% of GDP on defence is for the next parliament, with the funding and the profile to be set at the next spending review, and the further goal of 3.5% by 2035 sits further out still, both of them dependent on choices that a future government, with a different prime minister and chancellor, would have to make and pay for. Reeves’ statement casts defence as the number one priority for that review, language the Treasury has rarely used so far in advance, although the spending it points to has yet to be allocated.
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Quite a nice list of cuts so far, been at the tennis so still absorbing the shambles.
Wondered where you were mate,iwill look forward to your no doubt detailed analysis to come!
Quite how an army is going to function effectively with no organic helo support for liaison flights etc is baffling! Staff officers being transported by drones between HQs etc will be interesting.
Yep. Still, Jim knows best, 😉 Jim…..they’re only “colonial” and the multitude of tasks that a military carry out, not just peer war, can safely be dropped.
Yeah pretty much.
No one wants to fight a nasty industrial war in Europe , better to build an army around shwaking tribes men and gaining praise from the USA.
America’s got plenty of airplanes and nice GBAD to give us. We need a handful of highly trained tier one operators to keep the UK safe from???? 😀
I’m sunburnt, headache, but saw a quite magnificent 5 set thriller with the underdog beating the yank.
( which we Brits like. )
So only trying to catch up now.
Hollowed out forces did they say?
The irony is we’re getting rid of them because of the ‘lessons learned in Ukraine’, then we’ll probably end up gifting them to Ukraine, where they’ll get plenty of use out of them 🫣
Losing wildcats is another way to avoiding the word CUTS
Its so frustrating that such a small amount of money is actually needed but the government won’t fund it. £5bn over 4 years?
Foreign citizens on Universal Credit is around £15bn per year (£60bn over 4 years). Ban them from claiming and you fund the black hole several times over.
Priorities!
I figure the simplest fix for defence funding is for Miliband to become Defence Sec next, he seems to get what he wants within the Labour Party, he likely doesn’t care about defence in the slightest but he will fight to fund his brief just because it’s his.
The fact the British public cry like babies as soon as they hear tax mentioned doesn’t help. They want it all. As long as someone else pays for it…
There’s so much room for cuts there’s no need to talk about tax increases.
So everything short of real help then…because the oceans are boiling…
Dystopian
It’s a four year plan that’s just got a big uplift from already set out capital spending. Why would anyone be surprised that a substantial part of the uplift has to come from a budget statement later this year?
The amount is pretty small and spread across all of Whitehall it will be fairly easy to find. Unfortunately it’s coming from the capital budgets however there is little choice because despite what a few commentators think on here it’s actually incredibly difficult to cut disabled people’s income and despite what the Daily Mail tells you it’s really not easy to get disability benefits in the UK. The last three conservative governments tried and largely failed to meaningfully reduce disability benefits. Most disability benefits go to older people and with the retirement age being pushed further to the right this is set to continue. The only benefit that would be easy to cut (basic state pension) is politically toxic.
Overall I don’t think the MoD can complain about this financial settlement, it’s massive. What they have chosen to spend it on is largely of their choosing. Most of it seems ok to me however I can’t agree over the weak response to ballistic missile defence and the F35A buy should be much larger than 12 as should the E7 fleet.
GCAP was the only really massive program that could have been cut but then we must also respect the fact the UK is the only country in the world that can design and lead a multi national fighter jet program other than the USA. Having all of the wests fighter eggs in the US basket is dangerous. It’s probably worth more to NATO and western security that the UK sticks with GCAP than puts an extra Division in Poland
Beyond UK air and missile defence and naval control of the North Atlantic everything else UK forces provide is expeditionary. It makes little difference to UK defence. Personally I think we should invest in UK a defence first and foremost and what ever is left can go to providing NATO forces. Whether those forces are in the form of tier 1 operators or armoured brigades I will leave up to others. This defence review does not do that, if anything it doubles down on expeditionary warfare.
Jim Before you go all its not too bad, sit down, read the report fully and get a calculator out ! Then you realise the boost is not only inadequate but it is going to make this country a complete laughing stock at next weeks NATO conference and the consequences to our economy could be cataclysmic.
The NATO spending commitment is 3% by 2030 and 3.5% by 2035 for direct Defence expenditure plus 1.5% of Defence related total 5%. But it stipulates there should be no hockey stick investment curves so majority of uplift at start or incremental.
What makes me really mad is NATO even without the US doesn’t need to go to 5% OA. They should have gone for straight Defence spending at 3.5% and kept it simple so no one plays magic financing. FYI the combined GDP of European and Canadian would give us an overall budget of approximately $850/900 Billion which is the same as the US ! But no we had to make it complicated.
According to Starmer we will be at 4.2% OA by 2030 as he is already counting all sorts of stuff as our 1.5%.
Now for the scary stuff.
Navy Investment 26/30 £15.94 Billion but goes up to £32 Billion 30/35
Land Investment 26/30 £41.40 but goes down to £36 Billion 30/35
Air investment 26/30 £24.5 Billion but goes up to £70 Billion 30/35 (that’s the one that scares me).
Munitions 26/30 £9.02 Billion but goes up to £20 Billion 30/35
So as you can see that’s £90.86 Billion for this period which doesn’t get us to 3.0% but £158 Billion to get us up to 3.5% by 2035.
Which is exactly the sort of investment plan NATO and Trump warned not to do.
My guess is this is a massive political revenge by Starmer because it’s the next PM who has to pick the pieces up.
It’s OK @ABCRodney, I have just got off the phone to Putin and Xi. They said they planned on kicking off next year, but will hold on until we arrive on the dawn of never. So everything is alright.
Carry on, nothing to see or worry you here!
Q: Why would anyone be surprised that a substantial part of the uplift has to come from a budget statement later this year?
A: The triumph of experience over hope?
The F-35A purchase is completely pointless
Cuts to increase spending, jam not tomorrow but the week after. How this spineless dishonest shower of exceeeement can have the nerve to carry on conning us begs belief. First priority of government is defence and security? No it’s not it’s about buying votes with hollow promises and bucket loads of welfare. Best thing comrade Burnham can do is get the working class heroine to put Russian and Mandarin onto the national curriculum. Unfortunately I suspect Burnham will be more interested in creating Mayors and decorating his new office and will just pray Putin goes away.
I’m speechless. They’ve tried to overwhelm us with vague information, buzzwords, and commitments to hide the underlying cuts.
Cutting real and valuable capabilities in the short term to pursue ‘still in development’ capabilities in the medium-long term. These people need to wobble their heads, then hide them in shame. I’m genuinely quite angry. Hopefully Burnham sees this for what it is and bins it.
Exactly. I’ve read the 81 page plan twice.
The really startling thing is the cost of DNE and associated infrastructure. Together, they will take more than 25% of the entire budget over the next 4 years. No detailed costs are provided beyond 2030.
Equally, the reliance on unproven unmanned platforms in all domains is hugely risky and uncosted.
No country has yet shown whether a 2000 ton drone vessel can really work. Now the propulsion issues have been fixed, why not replace T45 in due course with new build versions. With CAMM to be added, it will be as effective an air defence destroyer as any in the world.
The lessons from the Ukraine war have been misunderstood. Drones have come to prominence because neither side is capable of much else. The Russian army failed to conduct all arms warfare, which if applied properly, would have defeated Ukraine in days.
What the UK needs is to recover its much weakened ASW capability – getting the Astutes back to sea, and speeding up delivery of T26.
What we don’t need is fantasy fleet nonsense like the CCA.
The whole DIP is less a plan and more a political spin. Like you, I’m appalled by the sheer stupidity it displays.
Losing wildcats is another way to avoiding the word CUTS.
The Era of turning up to NATO commitment as a bunch of bums and freeloaders has returned.
Deja vu all over again
‘The task of winning the cold war consists primarily in building up deterrents against a hot war. Similarly, the only deterrents which are likely to be effective are actual preparations for war, such as will convince a potential aggressor that he will surely be defeated. Therefore…our defence effort must be directed towards one single objective, namely, to prepare for the possibility of a major war with Russia. This will not only put us in the best position to defend ourselves if war should come, but will provide the best hope of preventing it.’
Sandys 1952
‘The thinking of the Chiefs of Staff was that a ‘hot war’ breaking out with the Soviet Union would have represented a failure of deterrence, which would then have led in to a distinctive new war…’possession of superiority in long distance rocket artillery may well count for nearly as much as superiority in naval or air power’
Sandys’ found an unexpected ally in the Paymaster-General: his old rival Cherwell. In a meeting where Alexander made clear that further reductions could only be achieved by ‘cutting out substantial sections of valuable defence organisation’, a view supported by the First Lord of the Admiralty and the Secretary of State for Air, Cherwell demurred.
He raised the idea of taking ‘very big risks by gambling on the success of new inventions and new techniques’. He had unmanned weapons in mind…Such ideas, he thought, would have allowed Britain to remove ‘whole groups of armaments’ from its strategic calculations, naturally saving a lot of money’