Starmer trims budgets to fund extra £15bn for defence

Prime Minister Sir Keir Starmer has said a £15bn increase in military spending will be funded by cutting investment budgets in other areas, as he set out the UK’s long-delayed plan to invest in defence.

In one of his final acts as prime minister, Sir Keir said some road and energy projects would not “go ahead as planned” to help raise defence funding to £80bn a year by 2029.

He said the plan would be built on by his successor, widely expected to be Andy Burnham, who is yet to comment on the plan.

The Treasury later confirmed only £10.3bn in savings had currently been identified, meaning Burnham would have to find the remaining £4.7bn in his first Budget in the autumn.

The extra £15bn in spending over the next four years is more than the £13.5bn secured by former Defence Secretary John Healey, who resigned earlier this month in protest at the plans, but less than the £28bn sought by defence chiefs.

In a speech, Sir Keir said the defence investment plan (DIP), initially expected last autumn, would reverse the “corrosive hollowing out” of the armed forces under the Conservatives.

Sir Keir said he had ruled out further borrowing to fund the increase, and instead the money would be found by cutting the long-term investment budgets of other government departments by 1%.

The Department for Transport (DfT) is making a further £700m in savings from roads projects, with the A38 Derby Junctions and A46 Newark Bypass scheme being considered for cancellation.

The Department for Energy Security and Net Zero (DESNZ) is finding an additional £2bn from its budget. More detailed plans are expected in the autumn.

Some details of planned commitments over the next four years include:

The DIP also says the Ministry of Defence (MoD) will attempt to make efficiency savings worth almost £11bn by 2030.

The MoD is planning to deliver the savings by reducing the civil service workforce, cutting back consultancy spending, and expanding the use of technology.

Defence officials say the increase in defence spending is not conditional on the savings being made.

The DIP also says a number of defence programmes have been scrapped, including Storm Shadow missiles, a new satellite system, and Wildcat utility helicopters, which will now be phased out in favour of an “autonomous replacement”.

Sir Keir has pushed ahead with the DIP despite his impending departure from Downing Street after announcing his resignation last week.

Tense Whitehall negotiations over how to fund it have been ongoing for months.

Two defence ministers quit, with Armed Forces Minister Al Carns joining Healey in resigning over the scale of the proposed uplift.

In his speech, Sir Keir nodded to these difficulties, arguing “the hard truth is that there are no easy answers”.

Sir Keir said the plan would now increase the military budget to 2.7% of gross domestic product (GDP) by 2029, and put the UK on track to meet Nato’s core defence spending target of 3.5% of GDP by 2035.

The prime minister said the UK was on track to spend 3% of GDP on defence in the next five-year Parliament – but he did not set a more specific date on this target, something Healey had called for.

The DIP says the plan to hit the 3% target would be set out at the next spending review, which is currently scheduled to take place next year.

The DIP follows the wide-ranging Strategic Defence Review (SDR), which was published in June 2025 and pledged billions in extra spending to fund a shift towards “warfighting readiness”.

General Sir Richard Barrons, one of authors of SDR, said while the publication of the DIP “does count as progress”, it would not “crack the issue” defending the UK “sufficiently well and quickly”.

Speaking earlier, he said: “More has to be done sooner and that requires more money than is currently on the table”.

Sir Keir’s decision to publish the DIP in his final weeks as prime minister could cause tension with his successor, who may want to revise defence spending when they take over.

Speaking earlier, Sir Keir declined to say whether Andy Burnham, who is widely expected to replace him as leader, had seen the plan before publication.

Shadow defence secretary James Cartlidge said the prime minister had left a “legacy of failure”, an “underfunded defence investment plan that’s too little, too late”.

Lib Dem leader Sir Ed Davey said the government had “dangerously short-changed our armed forces”, meaning defence chiefs “have been forced to make hard choices, when they should be given what they need”.

Nato General Secretary Mark Rutte has previously urged the alliance’s members to present “clear, concrete and credible plans” for how they will raise defence spending to 3.5% ahead of a leaders’ summit in Turkey next week.

Rutte welcomed the DIP as a “good step” towards the 3.5% target, saying “stronger UK defence makes us all safer”.

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