Defence commitment puts departmental budgets in firing line

By the Editorial Team · Thursday, October 29, 2026

The UK government announced plans to raise defence spending to 3 percent of GDP by 2030, with further increases aiming to meet NATO's 3.5 percent target by 2035, potentially requiring over £11 billion more annually and budget cuts in other public sectors. This shift responds to security concerns about Russia but raises debates over funding stability and the impact on non-defence government services as detailed spending plans are prepared.

The United Kingdom is set to increase its defence spending to 3 percent of gross domestic product (GDP) by 2030, Chancellor of the Exchequer John Healey announced, signaling potential reductions in other government departments’ budgets to meet this target. Healey is expected to provide detailed plans for achieving this goal in next year’s comprehensive spending review, alongside measures to reach the North Atlantic Treaty Organization (NATO) benchmark of 3.5 percent of GDP by 2035.

Currently, the government allocates approximately 2.6 percent of GDP to defence, with a previous commitment to raise this to 2.7 percent by 2030. The revised target of 3 percent by 2030 reflects concerns about a possible Russian attack on NATO by that date, according to government officials.

Economic assessments underscore the scale of the financial commitment required. The Institute for Fiscal Studies (IFS) estimates that raising defence spending to 3 percent of GDP by 2030–31 would necessitate an additional £11 billion annually. The Office for Budget Responsibility (OBR) projects that meeting the 3.5 percent NATO target by 2035–36 could require about £35 billion more in spending, measured in 2026–27 terms.

Healey emphasized that the increase in defence spending would be pursued in a “fiscally sustainable way,” suggesting some funding will come from cuts to other areas of public expenditure. “That will include looking hard at public spending, as I have done to fund the defence investment plan today,” Healey told Parliament. He also mentioned plans to employ innovative financing strategies, involving private sector participation and international partners.

The OBR’s analysis indicates that, after accounting for protected spending on areas such as the National Health Service, defence, and education, non-protected day-to-day government spending could face real-term cuts averaging 2.6 percent annually in the last three years of the forecast period unless additional funds are found. Specifically, an £11 billion increase by 2031–32 would be necessary to prevent real-term reductions in these unprotected areas from 2028–29 onward.

The announcement drew mixed reactions across the political spectrum. Conservative Party leader Kemi Badenoch and Shadow Defence Secretary James Cartlidge described Healey’s statement as a deferred plan, with Cartlidge highlighting that the Ministry of Defence (MoD) budget has been reduced by £2 billion over the next two years compared to previous forecasts, largely due to lower-than-expected pension expenditures. Cartlidge questioned why those savings were not being redirected to bolster military capability amid recent significant cuts.

A defence insider sought to reassure that the revised funding would not alter planned investment in capability or day-to-day operations. However, critics remain concerned about funding stability.

Economist Paul Johnson of the 2030 Prosperity Alliance criticized the budget framework as overly optimistic, calling it “myopia on steroids,” and describing the government’s projections as reliant on questionable plans to cut public services from 2028 onward to maintain fiscal rules.

Healey also addressed a £4.7 billion shortfall in the defence investment plan inherited after the resignation of former Defence Secretary Ben Wallace, whose departure was linked to concerns over missed spending targets under Prime Minister Sir Keir Starmer. Part of this gap will be covered by reallocating funds from capital budgets across government departments.

The government’s commitment to enhanced defence spending reflects a strategic prioritization amid growing international security challenges, but the implications for the broader public sector budget remain a subject of debate as detailed plans are finalized.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.