Sir Keir Starmer has been warned the military is £28billion short in defence spending. A Ministry of Defence assessment made in 2025 reportedly exposed the multi-billion-pound shortfall to 2030.
Chief of the Defence Staff, Air Chief Marshal Sir Richard Knighton, is said to have delivered the bad news to the Prime Minister in a meeting at No.10 before Christmas. Defence Secretary John Healey and Chancellor Rachel Reeves were also at the sit-down, according to The Times.
The PM was reportedly very unhappy when he was informed about the financial bombshell, as he had apparently believed the finances were already in place.
Sir Keir ordered officials to rethink plans drawn up to show how ambitions for the military detailed in the Government’s Strategic Defence Review (SDR) will be realised.
The massive financial shortfall was blamed on inflation, pay rises for personnel and the cost of Britain’s nuclear deterrent. The biggest impact of the shortfall is said to be on the British Army.
A military source told The Times that officials would need to find some “big-ticket” items to cut, adding that ministers will have to make significant decisions about major issues.
Under pressure from Donald Trump, Sir Keir has pledged to increase core defence spending to 3.5% of GDP by 2035. The increase would still result in a £28bn shortfall, the source claimed.
Reports of the shortfall come as tensions continue to rise in Europe amid Russia‘s war in Ukraine; US President Donald Trump’s designs on Greenland and the potential fallout of the United States’ toppling of Venezuelan president Nicolas Maduro.
Relations between the UK and Russia continued to deteriorate this week as Britain joined a US mission to seize a Russian-flagged “shadow tanker” in the Atlantic.
London argued that the interception of the vessel by US special forces backed by British sea and air support, along with a US pledge of security guarantees for Ukraine, vindicates Sir Keir’s efforts to keep Mr Trump from abandoning America’s allies in Europe.
Others say it is wishful thinking, as the US capture of Mr Maduro and Mr Trump’s renewed desire to acquire Greenland put Sir Keir’s bridge-building efforts under potentially intolerable strain.
Sir Keir and France’s President Emmanuel Macron unveiled plans this week to deploy French and British troops on the ground in Ukraine, contingent upon a ceasefire being reached.
The Kremlin said any troops sent to Ukraine would be legitimate targets. Sir Keir told MPs on Wednesday that the decision on whether troops will be deployed to Ukraine in the event of a peace deal would be put to a vote.
Mr Healey pledged to “make 2026 the year that peace is not only possible, but the year that peace is achieved” in an emergency statement on the same day.
Questions remain as to how Britain will fund that peace, given the financial situation and mood inside the MoD, which is reportedly bleak.
An MoD spokeswoman said: “The UK defence budget is rising to record levels as this government delivers the biggest boost to defence spending since the Cold War, totalling £270billion this parliament alone.
“Demands on defence are rising, with growing Russian aggression, increasing operational requirements and preparations for a Ukraine deployment.”
