The UK government is under growing pressure after declining to deny reports that a major funding gap has emerged in plans to make Britain’s armed forces fully war ready.
According to multiple reports, the Ministry of Defence believes it will need an additional £28bn over the next four years to meet projected costs, far exceeding the money currently allocated. The shortfall is said to have been identified during an internal assessment carried out last year.
The MoD’s long-awaited defence investment plan has now been delayed, with Prime Minister Keir Starmer reportedly ordering officials to revise the proposals. The plan was originally due in autumn last year but is now unlikely to be published before spring.
Defence investment plan pushed back
The delayed document is expected to outline how new military equipment and defence infrastructure will be funded over the next decade. It follows a wide-ranging review of Britain’s military capabilities published in June last year, which pledged billions of pounds in additional spending.
That review committed the government to increased investment in ammunition stockpiles, next-generation fighter jets, drones and new attack submarines, as ministers set out ambitions to move the UK towards full war-fighting readiness.
Reports suggest the £28bn funding gap was presented to the prime minister and chancellor Rachel Reeves shortly before Christmas by Sir Richard Knighton, the chief of the defence staff, during a meeting in Downing Street.
Government declines to deny funding gap
Downing Street has refused to comment on specific meetings but acknowledged that the armed forces face mounting pressures, including the potential deployment of British troops to Ukraine to help enforce any future settlement to end the war with Russia.
When pressed on whether there was a £28bn gap in defence funding, the prime minister’s spokesperson declined to deny the figure, instead restating the government’s existing spending commitments.
Under current plans, the MoD budget is due to rise by 3.6% in real terms by 2029. Most of the increase is earmarked for long-term investment in new equipment rather than day-to-day spending such as salaries and administration.
Labour defence spending pledges under scrutiny
Labour has pledged to increase defence spending from 2.3% to 2.5% of national income by 2027, a move estimated to cost an extra £6bn a year. The party has also committed to raising spending to 3.5% of GDP by 2035, in line with Nato targets agreed at last year’s summit.
However, defence analysts and MPs have repeatedly warned that these pledges may fall short of covering existing commitments, let alone new ones.
The investment plan is intended to replace the rolling ten-year equipment plans that were published annually until 2022, when the MoD halted their release due to the impact of high inflation on costs.
Previous warnings over MoD finances
An official analysis published in December 2023 found that the MoD’s most recent equipment plan was set to exceed its budget by £16.9bn. A subsequent parliamentary report identified spiralling costs linked to maintaining the UK’s nuclear deterrent, along with inflation, as the main drivers of the overspend.
The delay to the new investment plan has also postponed the release of a separate strategy detailing £6bn in productivity savings expected between now and 2029.
An MoD spokesperson said the department was working at pace to finalise the investment plan, adding that the current government had inherited an underfunded defence programme from its predecessor.
