Does the UK’s defence investment plan deliver?

A recurrent refrain in commentaries on UK defence policy over decades is the imbalance between resources, commitments and capabilities. Unwillingness to make key decisions about money and cuts means that the defence investment plan has failed to correct that imbalance – so the refrain will continue.

The UK’s defence investment plan (DIP), and the process that led up to it, ooze indecision. The DIP, published on 30 June 2026, was supposed to implement the strategic defence review (SDR), published over a year earlier on 2 June 2025, and provide costed answers to a set of hard questions that defence will face over the next ten years. But it did not answer those questions, it only provided numbers for the next four years, and it failed to deliver on the promises of the SDR.

The SDR itself was not authored by the government, but by three outsiders – Lord Robertson, former secretary of state for defence and former NATO secretary-general, together with General Sir Richard Barrons (former Commander Joint Forces Command) and Fiona Hill (previously a national security adviser to Donald Trump). They will have had a team from the Ministry of Defence (MOD) and worked closely with other government departments, notably HM Treasury. But they would not be responsible for implementing the recommendations of the review and were not told what the budget was.

The DIP was promised for the autumn of 2025. But it was repeatedly postponed because of a prolonged battle between the MOD, which said that £28 billion more than the previous plan was needed to implement SDR, and the Treasury, which said that only £10 billion could be afforded.

Publication was eventually prompted by the resignation of the secretary of state for defence, John Healey, and the imminence of the NATO Ankara summit. The final figure was £15 billion more than allocated in the previous spending review, of which £10 billion was funded by notional expenditure cuts elsewhere and another £5 billion to be found in the autumn 2026 budget.

Paragraph 4 of the plan says that: ‘The SDR is a 10-year blueprint for national security and the DIP will put that into effect.’ But unlike the Equipment Plan (EP) 2023-33, which it replaces, the DIP only presents figures for four years into the future – to the financial year 2029/30. The EP also contained an affordability analysis that is missing from the DIP.

A ten-year horizon is needed because of the long-term nature of defence investments and the need to provide signals to industry. The DIP says that for the years after 2029/30, it is ‘leaving unallocated spending to allow us to respond to the evolving threat and seize new opportunities as technology advances.’

This further indecision seems to imply that spending is unallocated for the commitments specified for the period 2030-35. These include renewing the nuclear deterrent, keeping Typhoon operating till the early 2040s, and buying F-35A aircraft, which will enter service in the early 2030s to enable the UK to deliver US nuclear weapons. Estimates of the cost of these commitments are available, but publishing them would reveal the lack of decisiveness and balance in the budget.

The DIP was intended to turn the words of the SDR into numbers, and numbers – while not necessarily honest – are usually more honest than declared policy. But the indecision in the DIP is understandable given that the government was unwilling to answer six hard questions, three military and three economic.

Three military questions

What new kit to buy?

Ukraine and the two wars that followed the Israeli and US attacks on Iran have upset many assumptions about how wars would be fought. They have highlighted major gaps in anti-drone and anti-missile defence of the UK, and the lack of mass in munitions.

While new weapons, including drones, will be needed for the new wars, technology and tactics are evolving so fast that it is not clear what these weapons should look like, or which legacy weapons will be useful in the new environment.

Thus, while £5 billion will be invested in drones over the next four years, the DIP is vague about the detail of the autonomous elements of platforms like the Collaborative Combat Aircraft and the Common Combat Vessel. These will not come into service for many years, while the government says that the threat is imminent.

What old kit to get rid of?

There is not enough money to meet existing commitments, even before adding the new ones, so much will have to be cancelled. But the legacy systems have established constituencies, and beyond a few destroyers and frigates, there is little indication in the plan of what will be sacrificed.

The DIP still contains commitments over the next four years to the development and production of a range of legacy systems already in the plan. Most importantly, there is £64 billion (excluding workforce costs), over 20% of the four-year total, to fund Defence Nuclear Enterprise – new Dreadnought and AUKUS submarines, a new warhead and other nuclear work.

There is also £8.6 billion for the Global Combat Air Programme (GCAP), a sixth generation combat aircraft being developed with Italy and Japan. Much of the budget is for systems, like GCAP, that will provide capabilities in the mid- to late 2030s, whereas the government says that the threat is sooner.

Many of these legacy systems, like the Ajax armoured cavalry vehicle, are late, over-budget and not meeting requirements. But another £1.1 billion will be spent on Ajax over the four years.

Paragraph 55 of the DIP says: ‘We inherited a plan which was based on small numbers of large, crewed platforms with insufficient investment in autonomous vessels. It was both unaffordable and not what the modern threat demands.’

But this could be said of many of the systems still in the budget. In the past, unaffordability was met by cutting logistics, training, maintenance, military housing and other operational expenditures, causing a loss of fighting capability.

In addition, equipment projects were delayed and numbers cut, increasing costs and further reducing capability. As a result, the declared order of battle bears little relationship to reality. For example, none of the five nuclear attack submarines are in operation, and the time it took to send HMS Dragon to Cyprus earlier this year became a joke.

Can the United States be trusted?

This is a question that few are willing to ask because there seems to be no alternative, given that the UK is so dependent on the United States. The Americans provide the missiles for the UK’s ‘independent’ nuclear deterrent, although in the last two test firings, the Trident missiles failed. The United States does not reveal the source code for much software, prompting allegations that there are ‘kill switches’ in the ‘black-boxed’ software of the US-produced F35s and Apache helicopters.

Through the Five Eyes collaboration, the UK is heavily dependent for intelligence on the United States, which, briefly, cut intelligence sharing with Ukraine. NATO as a whole depends on the Americans for much infrastructure.

While there is a hope in the MOD that once Trump is replaced, the United States will become a more reliable ally, there is a recognition that more fundamental UK and US interests are diverging. One indication of the lack of trust is that the MOD is currently developing new missiles, under Project Brakestop, that have no US components. This is to ensure that the Americans will not be able to block how they are used in Ukraine.

Three economic questions

How much defence spending is enough?

There is currently a NATO target of 3.5% of GDP on military spending and another 1.5% on security-related infrastructure. The UK government has committed itself to 3.5% by 2035, but in the meantime, it will spend 2.7% of GDP by 2030, up from 2.3% in 2025.

It is not clear whether these are NATO qualifying definitions or MOD budgets, which are smaller. This is low relative to Poland, which is almost at 5% of GDP already. UK defence spending is planned to increase – in real terms – by 27% between 2023/24 and 2029/30.

These are not large numbers in historical context. The Korean war raised the UK share of military expenditure in GDP from 7.21% in 1950 to 10.93% in 1953. Other forms of public expenditure fell, taxes increased and the UK went from a public sector surplus of 4.6% of GDP in 1950 to a deficit of 3.1% of GDP in 1953.

Despite this, the debt-to-GDP ratio fell from 201% of GDP in 1950 to 156% in 1953. This fall was the result of financial repression – interest rates were kept low – and inflation, which went from 4% in 1950 to 11% in 1952.

In real terms, the Korean war rearmament probably did great damage to UK industry, particularly export industries, and slowed reconstruction at a time when France and Germany were taking off into sustained growth.

Guns or butter?

The Korean war was financed by reducing other government expenditure, raising taxes and borrowing. These are the three options.

The traditional economic argument is that wars, which constitute temporary increases in expenditure should be financed by debt. But the current increase seems likely to be a permanent one, and despite some government claims, it is unlikely to be an investment that will raise future growth (see Aikman, 2026, for a discussion of how to pay for increased defence spending).

There is an issue of how much increased military expenditure will increase GDP. This military multiplier is controversial and depends on the amount of spare capacity available and the extent to which total factor productivity is increased.

One recent study finds a large effect over the longer term in the United States because military spending shifts government expenditure towards research and development (R&D) (Antolin-Diaz and Surico, 2025). The DIP features R&D primarily through the development of platforms. The £1.6 billion investment in UK Defence Innovation (UKDI) over the next four years is to accelerate the development, scaling and adoption of advanced and dual use technologies rather than fundamental research.

Implementing the plan: what to procure and how to procure it?

Here, trust in the United States is again an issue, since it is the only Western source of certain types of equipment. Mark Rutte, the NATO chief, says that Europe is sustaining 195,000 US defence jobs through $300 billion in arms orders. The UK lacks the defence industrial base to produce equipment or munitions on the scale required and government indecision has inhibited the investment that would be required to acquire scale.

There is another round of procurement reform in progress with the establishment of the National Armaments Director Group, and reforms to single-source contracting. Given the history of reform set out in my book Defence acquisition and procurement: how (not) to buy weapons, one might be sceptical of the effectiveness of the latest effort given the incentives in the system.

There are successes. Taskforce Kindred, which has organised support for Ukraine, seems to have worked effectively, but it has not faced the standard procurement constraints and it has been financed by the Treasury.

Conclusion

A recurrent refrain in commentaries on UK defence policy since the Second World War has been the imbalance between resources, commitments and capabilities. Paragraph 2 of the 2026 defence investment plan says: ‘The DIP provides a unique opportunity to reset the entire defence programme to deliver the recommendations within the SDR.’

But the unwillingness to make the necessary decisions about money or cuts means that the DIP has neither delivered on the recommendations nor corrected the imbalance – so the refrain will continue.