UK facing £28bn defence spending gap claims

The government is refusing to deny reports that plans to make Britain’s armed forces “war ready” will require billions more than it has allocated so far.

The Ministry of Defence (MoD) believes it will require an extra £28bn over the next four years to meet its forecast costs, according to The Times and The Sun.

The department’s investment plan has been delayed, with Sir Keir Starmer reportedly ordering a rewrite of the proposals.

The plan was initially supposed to have been completed in autumn last year, but could now not emerge until the spring.

The document is due to set out how new equipment and defence infrastructure will be funded over the coming decade, following a wide-ranging review of Britain’s capabilities published in June last year.

The review pledged billions in extra spending for extra ammunition, next-generation fast jets, drones, and new attack submarines, as ministers pledged to move the UK to “war-fighting readiness”.

According to the reports, the projected £28bn shortfall was made by MoD officials in an internal assessment conducted last year.

Sir Richard Knighton, the chief of the defence staff, delivered the forecast to Sir Keir, Chancellor Rachel Reeves in the run-up to Christmas at a meeting in Downing Street, it is reported.

The prime minister’s spokesman said he would not discuss “specific meetings,” but acknowledged that the armed forces were facing additional demands, including a potential deployment to Ukraine to police any deal to end its war with Russia.

Asked several times if he could deny there was a £28bn spending gap, he said he could only reiterate the spending pledges already made by the government.

The MoD’s budget is due to rise by 3.6% in real terms by 2029, under departmental spending plans fixed last year.

The increase was weighted towards the long-term investment budget, which pays for new military kit, rather then the day-to-day budget that covers things like administration costs and salaries.

This is not the first time that there have been warnings about the MoD’s ability to fund its spending commitments.

The investment plan is meant to replace decade-long “equipment plans” released on a rolling yearly basis until 2022, when the department halted publication whilst it assessed the effect of “extraordinary inflation” on its plans.

An analysis published by the department in December 2023, under the previous government, found that the MoD’s most recent equipment plan was forecast to exceed its budget by £16.9bn.

A report by MPs published the following year said the biggest cause of that shortfall came from spiralling costs from maintaining the UK’s nuclear weapons system, alongside inflation.

The delay to the investment plan has also delayed the release of a separate document detailing yet to be specified “productivity savings” within the department worth £6bn between now and 2029.

An MoD spokesperson said it was working “flat out” to finish the investment plan, adding that Labour had inherited an “underfunded defence programme” from the previous government.