UK Defence Budget Faces £28 Billion Shortfall Over Four Years

The Ministry of Defence has identified a projected funding gap in its budget, with a shortfall of £28 billion anticipated over the next four years. This assessment comes as the UK government continues to plan for future defence spending and policy implementation.

According to reports, Air Chief Marshal Sir Richard Knighton informed Prime Minister Keir Starmer of the Ministry’s funding assessment before the end of 2025. The Defence Investment Plan, which outlines the delivery of the Strategic Defence Review, has experienced delays and is now scheduled for publication by March.

The Strategic Defence Review, which provides the framework for UK defence policy, was announced in July 2024 and published in June 2025. The review sets out priorities and objectives for the Ministry of Defence over the coming years.

The UK government has stated its intention to increase defence spending to 2.5% of GDP by 2027, with a further target of reaching 3% in the following parliamentary term. These commitments are intended to align spending with the objectives outlined in the Strategic Defence Review and the forthcoming Defence Investment Plan.

What the numbers show

• The Ministry of Defence projected a £28 billion funding shortfall over four years
• Defence spending was £53.9 billion in 2023/24 and £60.2 billion in 2024/25
• Projected defence spending for 2028/29 is £73.5 billion
• Equipment expenditure in 2023/24 reached £25.2 billion
• The Public Accounts Committee previously identified a £16.9 billion shortfall over ten years

In the 2023/24 financial year, the Ministry of Defence reported total spending of £53.9 billion, with equipment expenditure accounting for £25.2 billion. For the 2024/25 period, defence spending increased to £60.2 billion, and projections indicate a rise to £73.5 billion by 2028/29.

The Public Accounts Committee previously assessed the Ministry’s Equipment Plan and identified a £16.9 billion funding gap over the ten years leading up to 2033. This earlier assessment highlighted ongoing challenges in aligning planned investments with available resources.

The Defence Investment Plan, which is intended to set out the implementation of the Strategic Defence Review, has not yet been released as initially scheduled. The plan is now expected to be published by March, outlining how the Ministry of Defence will address its priorities and funding requirements.

As the Ministry of Defence prepares to release its updated investment plan, the government’s stated targets for increased defence spending remain in place. The forthcoming plan and spending commitments are expected to shape the UK’s defence policy and resource allocation in the coming years.

* This article is based on publicly available information at the time of writing.