The Ministry of Defence set out plans to move away from annual budgeting towards a 10-year Defence Investment Plan and a new procurement model, marking a significant change in how the department plans and delivers military capability.
The approach was outlined during a Defence Committee session on 17 March 2026 on the MoD Annual Report and Accounts 2024–25, where senior officials were questioned on defence reform, acquisition and long-term planning.
Permanent Secretary Jeremy Pocklington told MPs the department is moving “away from the old annual budget cycle” towards a system built around longer-term strategy. He said the Defence Investment Plan would “set out a long term plan for the department” and be underpinned by an Integrated Force Plan linking military requirements directly to funding decisions.
Alongside this, the MoD is restructuring how procurement works. Pocklington confirmed that under defence reform, the military side of the department will define requirements, while the National Armaments Director’s organisation will be responsible for buying and delivering equipment. He said this is intended to “simplify those lines of accountability” and allow the department to “work faster and respond” to changing threats.
Rupert Pearce, the National Armaments Director, said this will be supported by a new portfolio-based structure. Programmes will be grouped into areas such as space and lethality, allowing the department to manage capabilities as connected systems rather than standalone projects. He said this would provide “a much stronger lens” for overseeing delivery across multiple programmes.
He also indicated a shift in how equipment is acquired as the department is aiming to rely less on bespoke development, with Pearce stating “we’re trying to avoid development, so we just go shopping instead of developing,” alongside efforts to introduce faster procurement cycles and more segmented approaches depending on the type of equipment.
The reforms also place greater emphasis on industry engagement and financing, Pearce said the 10-year plan is intended to give industry a clearer demand signal, enabling companies to invest with more certainty, and to support a more strategic relationship between the MoD and its suppliers. He added that work is under way to bring in private capital and improve access to finance, particularly for smaller firms.
Has anybody asked the Treasury about moving away from annuality? This seems to be a repackaging of old ideas: e.g. ‘Customer 1′ and Customer 2’, joint capabilities and the previously unsuccessful attempts by the MOD to move to a longer planning and forecasting cycle. I’ll be delighted to be proved wrong, but I don’t see anything radical here.
Be a good idea if we ever buy any thing apart from spares and service contracts. Better to have a longer term plan of doing next to nothing rather than a yearly one.
I hope it works out better but there does seem to be a of lot talks, plans, projects, ideas, industry open days but not a lot else going on. That could be that the Military mostly the Army, is in such a mess that just chucking money at will not do much and some needs think and then act on how to fix it.
It would be good if the MOD would stop wasting money and update equipment when needed instead of letting it go obsolete then retire that equipment leaving a gap of up to 10 years until it’s replacement is in service like the E3D, Harrier and Puma.
Agreed why was AS90 never up dated? We retire kit with not even an order to replace what is retired it’s a MOD way seems all about short term cost cutting. Look at the USA the M1 Abrams been in service 40 years but been up dated many times not us we keep it until is crap then spend loads buying something new but less if them year after year.. or just going with out.
Project Braveheart was the AS90 mid life extension plan, it was tested and proved to be an outstanding success, it far exceeded NATO accuracy requirents. However, nobody thought about the how much money needed to be spent building new gun sheds to accommodate a 52cal length barrel…
Yet AS90 would have been better etc than m109a7 Aand near as good as PZ2000, save money in short term to cost more later its the MOD way.
You almost wish that ‘Infrastructure’ was one of the mandated Defence Lines Of Development that DE&S process supposedly slavishly follows.
Oh, hang on.
It’ll make it harder to cancel and easier to fund those big ticket items. The new submarines, GCAP, FADS – those are the three most important British development projects going forward, and each operates on a timescale of decades. It’s also good insurance against unpredictable leadership, both on the left (won’t somebody think of the fish in Faslane) and right (AMERICA, baby) of British politics.
Long term certainty of funding is what Defence needs.
Instead, rhe rug is pulled out from under it regularly for short term political needs.
Where is the accompanying 10 year funding ringfenced and agreed by all parties?
“We’re trying to avoid develpment:and go shopping.”
What, like the 12 billion or so you’re pouring into GCAP to develop it? Shopping sounds like more OTS?
Hasn’t the military side always defined requirements? And DE&S, previously DPA, previously the PE, bought the stuff.
Just because that area now sits under the NAD grouping how is it changed?
You are correct Daniele, this could work out 2 ways.
1. It’s a 10 yr plan that is backended with funded that does not materialise
2. With defence inflation indexing being applied (min 10% annual inflation) there will always be a black hole at the end of the 10 yrs.
3. It all needs to be ringfenced otherwise HMT can’t help themselves in dipping “in year” cost reductions.
4. Governance of this really does need to be through the Defence Select Commitee, it really is that important
Am I confident any of this will happen, no. If I was to place a bet it would be that they make a big announcement with funding commitments so far down the line that it becomes meaningless. This seems to be this governments speciality
I’ve followed Defence for 36 years, we’ve had defence “reforms” before. So sadly, I’m not confident that this will be any different, but hope to be wrong.
I agree mate, its all just more hot air and endless bullshit.
Sweeping all the smoke and mirrors out of the way and back in the real word:
A: No increase in defence spending
B: No DIP
C: No defence plan whatsoever tbo, apart from more cuts and sticking plasters over the growing cracks.
The big problem is when Osbornian cuts are needed to ‘balance the national budget’
There is a very strong argument for long term investment plans for roads, railway electrification, digging tube tunnels and all sorts of things as it is always cheaper to build to a steady roll/drumbeat than to start from scratch.
Unfortunately, HMT clings to the, discredited, delusion that ‘The Market’ will step in and produce trained people and kit magically. Up to a certain, very limited, point that works but when it is really big projects like HS2 not using the HS1 team or approach – procrastinating on the start of HS2 was incredibly expensive.
So a lot of other sectors should have ringfenced long term investment plans but that won’t happen as it ultimately reduces HMT’s power or as they see it ability to ‘spend it better’.
What I would like to see is a degree of ‘fire and forget’ included in the Ten Year Plan. This could ringfence 65% of committed expenditure to key programmes in the procurement folio regardless of which party or parties are in power. The remaining 35% would be negotiable for both political and tactical requirements. I’d take 65% over ten years rather than the current nonsense. The RN needs an act of parliament to ensure one new surface combatant is ordered every 24 months regardless of party, and this ten-year plan could be one way of achieving such an outcome.
The biggest issue is services hiding costs to get projects green light and then expecting the magic money tree to bail them out down the road.
That trick has been going on forever and was why BW cut E7 from 5 -> 3 when the RAF ‘hid’ £1.5Bn of costs on the project and it had to come from somewhere.
In fairness, project costs are difficult, and car makers have got it down to a fine art. Even so, crises come along, like the current troubles in the Middle East, and costs are blown to hell. That said, defence is an essential expenditure, and greater cost tolerances come with the territory, and there must be some abuse of the public purse; it just needs to be better disciplined through good programme management.
We are talking capital programs here and not munitions.
If government wants to expend munitions they need to be funded.
I think blaming the RAF for “hiding costs” is a completely laughable joke and doubt your ability to sustain that argument.
The fact is the DE&S is the responsible organisation for procurement, and the government of the day (including the treasury) is responsible for the demand to cut costs on the program despite the contract for 5 having already being signed. They signed a contract at a cost and as soon as they tried to renegotiate the contract, they were always in a losing position.
How they believed Boeing would take the hit for a reduced order is beyond me. As soon as the original order was made in 2019, they primed their supply chain, sourcing 5 airframes and 5 sets of radars as well as other systems.
When the government realised that they could not get out of the contract without a significant penalty, then they should have provided the shortfall in funding from treasury reserves to honour their commitment.
Governments seem to find plenty of money to pay for the people who arrive on boats every day and plenty of money to spend on the Ukraine war, so how this decision to cut to 3 was ever thought of as a good idea is beyond anyone with half a brain. The projected savings from a cut to 3 airframes from 5 was a drop in the ocean.
Hi M8 the bit in the article that just made me laugh was 2 words put together.
“Procurement works”
Be serious !
I think the majority actually does, of low value stuff.
That’s the bit that worries me, it isn’t boots, assault rifles or bullets that eat up the budget it’s the £Billion projects like Ajax and 🤞🏻CR3. It’s just taking way too long to get the final production / modification going and inflation may well bite it.
In theory 10 year cycle is a great step in the right direction and should result in less increased costs coming from having to delay stuff out of the current financial year.
However as with everything the devil is in the detail and I can’t see any movement giving a public sector entity that much freedom.
A 10 year plan just lets them shuffle spending commitments outside the OBRs 5 year remit. Feels like an accountancy wheeze.
I wasn’t aware of that 5 year rule? Thanks.
Could well be to get around the OBR. The issue the current government has is the output of it’s capital investments don’t form part of the OBR calculations and the government is perceived to have less cash than they actually do. Allowing some extra headroom in the budget could be a positive as it allows more money to be potentially spent on defence within the balancing of the books cap.
Hope it happens as ‘planned’, hope it’s funded properly at an enhanced level, hope it gets started quickly… a lot of hope, one more hope – hope it’s not wishful thinking.
Does anyone remember DERA, DPA and DLO . To be resurrected as UKDI , Options & Commissioning and Core under NAD Group. DE&S is retired 31 March and rebranded as NAD group under 3* Director Generals. My concern is ‘military’ defining requirements. That does not work well
‘Defining requirements’ usually means ‘business requirements’, which in the military context is e.g. ‘what we need to prevent’ or ‘what we need to destroy’. That has to be translated into mechanisms of achieving those effects, and those then need to be translated into procurement decisions. It is in achieving those translations that things can go wrong, and it doesn’t look too clear where those ‘lines of accountability’ will then lie.
Unfortunately Ian, ‘ business requirements’ is when the tail starts wagging the dog, thats how we end up derailing all our procurement decisions, as the DTI seems to dictate the actual equipment procured, instead of the armed forces.
So presumably the plan is not to order anything for ten years? 🤔
Currently it seems to be to not plan anything for ten years.
👍😊
Only going to end in tears.
Since when have such activites run smoothly in the UK Snivel Service ?
This all means nothing without real £s.
No ten year plan for anything lasts more than a couple of years.
The world changes frequently, and often suddenly and dramatically (drones took about 3 years to do so), and so must our defence posture. This ten year plan will in effect become a rolling, 2 or 3 year adjusted plan. Not much better than the current annual events.
If it has the effect of preventing MOD delaying work in order to move the outlay into the next FY because they’ve spent their budget for this one (and incurring greater overall cost as a result), then that has to be a good thing.
Is the UK armed forces or any armed forces capable of viewing what equipment they will want or need in ten years from now. Does a ten year plan inevitably lead to the kind of slow grind MIC style process that takes a decade or more to deliver anything all because the ten year plan said so.
I don’t remember drones being mentioned in the SDR2015 much even though everything Ukraine is doing existed in 2015.
I like the idea of this fully worked out plan with cross party support but it’s not very democratic to be apparently committing parliaments two elections in the future to spending commitments today. If mad Vlad drops down dead tomorrow, the Ayatollahs give up and China suddenly becomes a democracy are you telling me that people have to keep sucking up higher taxes and major spending cuts to fund 5% of GDP on defence spending because a labour government took a decision in 2026.
The lead time on developing e.g. new frigates is of the order of 10 years, so they already have to plan over the relatively long-term. Aligning spending plans to the same time-frame is fairly logical.
I think that’s right Ian. A lot of new equipment will take years to develop and get into production. Not just the big developments like GCAP, Dreadnought and the T83s, but weapon systems like FC/ASW etc. Even the limited development involved in the Castle MCMV and Proteus MROS, or the floating Dock at Faslane, is taking a few years to get anywhere.
It seems sensible to scope and budget the whole procurement plan over 10 years. I assume it will still be reviewed and adjusted where needed on an annual basis. So something that turns out to be a damp squib, like possibly Ajax or Watchkeeper in the past or small unmanned UUVs in the future, gets the chop, while new technologies and requirements get fitted into the rolling plan.
One advantage is that programmes will be locked in and orders placed, giving MOD and Treasury a lot less scope to fiddle with the sums annually.
.
It’s only logical if you can align all plans, some programs take ten years or thirty years. Others should be done in ten weeks.
SDR 2025 Foreword
‘…it sets a new vision for how our Armed Forces should be conceived—a combination of conventional and digital warfighters; the power of drones, AI, and autonomy complementing the ‘heavy metal’ of tanks and artillery…
The SDR is the Plan for Change for Defence. It sets out the following new ambitions:
Move to warfighting readiness…UK innovation driven by lessons from Ukraine—harnessing drones, data, and digital warfare to make our Armed Forces stronger and safer…’
The issue is around all of the cost blowouts caused by the ‘in year’ savings that are required and the re-profiling of the spend on major projects that slows them and costs fortunes. That is what is eating huge chunks of the defence budget and getting away from that is essential. Slowing down SSBN and SSN production has cost monumental amounts of money. Not investing the in nuclear docks and spares has hammered SSN availability. Not ordering T26/31 early enough has wasted monumental amounts of money of T23 LIFEX which would have paid for a full class of T26s or another batch of T31. The amounts wasted by being cheap in the short term are absolutely enormous.
Hi SB, Yep spot on about how stupid MOD is forced to waste the overall budget by the annual penny pinching of HMT. The sums wasted on the Astute procurement are eye watering due to the slow, staged payments and lack of investment (worst kept secret is we could have had 10 for the overall Budget if it hadn’t been delayed and then properly funded).
But I’m just not convinced going over to a 10 year Budget Plan will avoid that on its own, IMHO it needs something else alongside it.
One of the causes of the shortfalls in Capital Budget is the way Operations are funded, so if something happens that requires a deployment the Treasury tells MOD to find the money out of their existing budget, which in turn has a knock on effect. It’s only if something serious happens that HMT has to put its hand in its pocket, in some years no extra is provided as its a whole series of small matters that all mount up.
Same thing applies to the unknown tech that appears during the course of the 10 year plan, if it needs to be funded it either means cuts elsewhere or extra funding (good luck on that one).
I actually think that either of those scenarios should have to be put to Parliament and not be down to the Treasury Officials, its then up to the elected representatives to either fund it or not via a supplement.
Which spookily is what used to happen pre WW2 and before we had Treasury Officials who make no secret of loathing Defence Spending.
I actually like how France Deals with it a 5 year funding plan and a 10 year equipment plan !
Proof is in the pudding, but I see this as a good start. Never thought I would hear myself saying that. Just as long as it can roll over. The reason being that if the MOD wants something really expensive, like an extra 50 Challengers, for example, they can roll over unspent money from this year and combine it with the following year to order them all the next year without impacting what needs to be paid for that next year. My wife used to work in the US Defence industry and although their budgets are huge, many projects and Departments have an annual budget. If they don’t spend it all the lose that unspent money and their budget is normally reduced by that amount the next year. So what happens is they splurdge at the end of the fiscal year on stuff they may or may not really need right now so as to not lose their budget. That’s what I want to avoid.
More action and less words needed from these Politicians.
The threat is real and now.
The wish to go shopping rather than do development is nonsense, especially if you want to expand the UK defence industry.
Whilst it might be possible to rely on the commercial sector for a limited range of niche products, the big stuff has to include development costs. There is no other customer for warships, heavy armour, combat aircraft than MOD.
As for greater reliance on industry, have the shambles of Ajax ( GDUK) and Warrior upgrade(LMUK) not been learned?
Nor, looking at the design and build timescales of new warships, submarines, combat aircraft is 10 years long enough. These expensive core assets need a 20 year plus commitment.
We rely on industry for all defence programmes, one way or another. The shambles of Ajax and LMUK weren’t the fault of industry. They were down to politicians and the MOD constantly changing specs. and timescales.
No.
GDUK used hulls that weren’t built properly, the main underlying cause of the current problems.
LMUK initially ignored BAEs conclusion that CTA would require a new turret. Hence the delays and the refunds paid to MOD.
The specification changes you mention are not unusual but neither contractor was able to deliver on time to an acceptable standard.
Both contractors demonstrated serious incompetence. Neither had a proven track record of delivery and should never have been awarded the contracts. It’s what happens when you have allowed your own sovereign production capability to be closed down. Contrast these failures with France’s success in building Jaguar and integrating the CTA.
Thanks for the info. There were quite a number of changes though, I thought.So the contractors are at fault as well but does nobody monitor these programmes? Perhaps I am being naive.
It all works if the Defence environment (good or bad) remains relatively static, such as the Cold War years when a silmilar set-up existed. What happens if there is an unanticipated change of threat (9/11) or Technology ( AI?) in the 10 year plan and suddenly a new major Requirement emerges ? OK if the change is small (in monatry terms ) but nothing in Defence is cheap and large contingencies will need to be included in the 10yr Financial plan – which will be a source for the Chancellor to dip into to pay for unexpected changes in other Depts.
It is a good idea if
1) it becomes law
2) any changes to it via an independent defence review or cross party group of MPs.
3) the funding is not influenced by the treasury .
4) Only developing where necessary can only be a good thing. The Ajax fiasco being a prime example where we develop our on and end up spending a fortune for a vehicle that is worse than useless while everyone else buys off the shelf.
Times rumour that Ajax will go ahead to protect jobs.
Hummmmmmm, that okay if they can fix the issues!
Until the defence budget is taken out of the control of the parliment we will always have problems with procurement. If we look at history the only time when procurement seemed to operate in a positive way for the various defence departments was in time of war when a need for a replacement or new kit is recognised a comity from the Army, Navy or RAF is formed from personnel who know what is needed who then talk to industrial leaders and between them they come up with a cost and a delivery plan.
At the moment there are to many people with their fingers in the pie along with the privatisation of large swaths of the MoD budget with most of the proffits going overseas, this has to stop ASAP, we could start with looking at who gains from these contracts (follow the money). Then we need to limit the proffits of these contracts to 10% along with proven investment in the UK Defence infrastructure.
But before all the above can happen the UK needs to agree what the Army, Navy and RAF need (how many AFV’s, ships and aircraft) along with how many personnel will be needed as a minimum. Once that has been established the funds and a pathway agreed. This should have nothing to do with GDP as the cost to put right the defence of the UK will be far above the current 2.5 to 3% but then once the basic defence infrastructure and personnel are in place the costs will come down significantly.
When I joined the army in 1975 MoD had something called the Long Term Equipment Plan (LTEP). Guess what? It was a 10 year plan! It was a rolling plan and was updated every year. No Idea when 10 year equipment plans were abandoned. It was renamed simply the Equipment Plan (EP) some years ago.
We had it up to 2023.
We abandoned them because they took 6 months to produce after the start of the financial year, which MOD claimed wasn’t up-to-date enough. In the interests of transparency they said they wanted to replace them with something more timely: the DIP. You can’t make this stuff up, you really can’t.
It will make no difference until we kick the civil service out of the country try and get their meddling and anti British behaviour out of government and spend enough money. At the moment with an anti British America allied to Russia we have to realise that we need to catch up probably about 50% of GDP for the next 10 years
Steven, the quantity of equipment needed is known. When a Staff Requirement for a new equipment is written by a uniformed Requirements Manager the numbers of equipment required for deployable units, the Training Organisation and where relevant the Repair Pool and Attrition Reserve are detailed.
The issue is downstream. Example – the MoD bought 386 CR2s after the Cold War had finished for the much smaller Cold War Army sized at 120k regulars. The global financial crisis of 2008-9 led to swingeing cuts in Camerons 2010 SDR and arbitrarily 40% of the tanks were taken out of service. Some deteriorated so badly they were scrapped. Then 14 were gifted. The regular army today is 73k. So we have 213 tanks on the active list today, and 75 other tanks totalling 288 tanks. These will be replaced by 148 CR3s.
So how many tanks do we need today? 386, 288, 213 or 148?
This is what I was talking about above until we decide what is needed to maintain our armed forces at a level were they can do what is/will be expected from them along with the personnel so we can man the equipment in a capable manor (not have ships tied up due to lack of crews) for example if we are going to maintain a carrier fleet of 2 with at least 1 ready to go to sea then there must be at least 4 escorts and 1 SSN along with a fleet tanker and a fleet dry good support ship ready to go to sea at all times all fully maned an trained they then have to be replaced when the operation is over then we also have other commitments so we are looking at at least 20 to 25 escorts (frigates and destroyers) 8 to 12 SSNs 4 to 6 Fleet tankers and 4 to 6 dry goods supply ships along with the personnel to keep these vessels fully maned.
Then if we do the same with the RAF and the Army we will have a good idea of what is needed and the levels of man power will be needed. Then we have to put our money where our mouth is and set out a path to put this into practice. It is going to take a lot more that 3% GDP but once it is in place then the over heads will be significantly reduced.
The long delayed Defence Investment Plan (DIP) is now due to be published in May, the latest delay apparently due to the now blindingly obvious need for the UK to greatly increase munition stocks and related reduction capabilities, particularly for air defence systems and the Army’s “war fighting division”. Presumably investing an extra few £ billion in munitions will mean something else will reluctantly have to be axed. The likely one year disconnect between publishing SDR and publishing DIP surely indicates that the former has been at least partially overtaken by events and needs an update already.
Not sure what you think has changed so greatly over the past year. Increased air defence was always an SDR focus.
Oh the irony – the history of defence ten year plans is not good.
Wouldn’t it be nice to say “no wars for ten years”?