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.
I would have thought the treasuery would be pleased with the cuts that are coming, although why we are having an SDR is beyond me. Most of the “decisions” about the maybe, at some time, in the future, after the review “improvemnets” are for the future.
As many have said the range of threats has increased the resources haven’t.
It is as simple as that really.
One of the reasons that UK defence appears expensive is the huge range of niche activities and enables that we have each of which would be a nightmare to re establish if it was let go.
Because of this and because UK forces structures are defined to fight a big war this then soaks a lot of overhead.
Conversely when more money is spent it will appear to deliver better value as the overhead won’t grow in proportion.
I know that answers a question you previously asked, in another thread, so it is OT.
In a way I think we have to be thankful that these enablers and force structures were not primed so much as then responding things would be a lot slower and much more expensive.
Geoff, we are having an SDR because we have a new Government. It would be surprising if there were not some capability enhancements as Labour have said they are definitely ramping up to 2.5% of GDP spend (some day!). As with all defence reviews there will of course be some cuts to take the joy off hearing about the enhancements.
Time will prove as to who is right re the SDR Graham but that wasn’t really my point. It was that so many decisions are being made ahead of the SDR as to make it almost pointless. As for the 2.5 per cent they have not promised anything except a lot of sometime , maybe’s. All they have to do is agree with Tory palns to reach 2.5 by 2030 at the latest.
That everyone will be issued with anti-glare rose tinted glasses will be the only thing to come out of the revue, as sure as night follows day.
In reality the only thing that would count, would be an immediate increase in hard cash of the defence budget to 2.5% to reflect the increased risks to the UK.
That’s not asking for the world is it?
The Treasury, greatest threat to national security known to man.
The Treasury know the price of everything and the value of nothing.
The Treasury knows the price of everything and the value of nothing.
Gonna have to increase spending eventually! Once Trumpy forces a peace deal in Ukraine (which Pooptin desperately wants as he is burning through men and material) give it 3-5 years and Russia re-arms, watch the next invasion be the Baltics and then subsequent NATO response. But by then I’m sure these Labour clowns will be gone, having kicked the defence can down the road!
The Treasury rules the roost when it comes to Defence and the bottom line is this Labour government do not want to spend more money on defence and would prefer to rely on our partners to take up the slack. Expect the SDR will mean only one thing smoke and mirrors but will ultimately mean cuts! The only thing will be where? As we are scraping the bottom of the barrel already and our enemies consider us to be weak.
£3 billion a year to Ukraine for as long as it takes ? It would appear Donald the maniac has ended that imbecilic scam. So it takes !!! a month or two !! or less ! When, (and I never in a million years thought I’d say this) the Doves replace the hawks.
God bless all the souls who’ve perished on the alter of the American/Nato war machine. ❤️✌️
How’s the weather in St Petersburg today, Comrade? The big hawk here is your psychopathic Russian dictator, hell-bent on seizing and occupying neighbouring territory to Make Russia Great Again. Straight from Adolf’s playbook. The poor Russian people, saddled with yet another idiot leader prepared to sacrifice a generation on the battlefield to have a place in history. It won’t end well for him, the West could crush Russia economically and militarily.any time of its choosing…
They,ll answer in the Next S.D.R. god help us.
This is an important point that UKDJ is raising. Money allocated to defence last year but not yet spent, for any one of a number of reasons, needs to be factored into the following year’s budget.
It may be that we allocated money for the new Chinooks or Jupiter helicopters or T31 frigates, that wasn’t spent because the progress was behind schedule and budget expectations. Perfectly normal in a business, where you just roll the money over to the next financial year, so it’s there to pay up when needed.
It is a rather rum state of affairs when the Treasury reallocates the pot of money to two years ahead. Begs the question, what do we pay LM, Aerospatial, Babcock etc with in the meantime? – they ain’t going to give us a one-year holiday on paying their invoices!
It can only come from some other part of the defence budget, so we go short somewhere else – despite the money having already been allocated to defence.
In the absence of a credible – and it has to be credible – response from the Treasury, this feels like sleight of hand by the Treasury accountants, a pastime they are very good at.
It means the actual defence spend in 2023/3 was a good bit less than HMG has claimed, as there is no sign that HMG adjusted the figures retrospectively – or reduced the percentage of GDP spent on defence to a more accurate, lower figure. It means that other budgets have had to be cut this year to find money to pay the bills, as the Treasury has effectively seized the unspent part of the budget. And it means the DS can pretend next year that here is this new pile of money for defence, when actually it is money already given to defence finally but held onto by HMT and only released two years later at a politically opportune time.
The Treasury could of course quosh such allegations by providing a full and honest answer to UKDJ’s question. Their continued silence speaks volumes.