Defence Secretary Dan Jarvis has declared that “real progress” has been made this week on the long-delayed defence investment plan, signalling that a resolution to the bitter Whitehall funding battle may be in sight. In a sign that the blueprint for future-proofing the armed forces could be in line for a boost, Jarvis indicated that talks with the Treasury had moved forward in recent days, though work within government is ongoing to “get it right” before publication.
The funding impasse
The defence investment plan (DIP) was originally due to be published last year but has been repeatedly held back amid internal government wrangling over the amount of money needed to finance the military. The core issue remains the finalisation of the plan’s funding, with high-level negotiations between the Ministry of Defence and the Treasury continuing behind closed doors.
The delay came to a head earlier this month when Jarvis’s predecessor, John Healey, quit his Cabinet post. Healey walked out because the DIP was only set to provide an additional £13.5 billion in defence investment, an amount he described as falling “well short” of what was required. According to reports, Healey had been seeking a settlement of £18 billion, but Chancellor Rachel Reeves was reluctant to approve more than £12 billion, with a compromise figure of £15 billion also discussed at the time. Since his resignation, reports suggest a further £1 billion has been added to the DIP’s funding package.
The funding picture is further complicated by warnings from military chiefs of a potential £28 billion shortfall in defence funding over the next four years. The DIP, a 10-year spending programme, was found in December to have a deficit of that size. It is designed not only to replace the previous Equipment Plan but also to expand on it, after those earlier plans had become progressively less detailed and harder to scrutinise.
Jarvis, a former army officer who was appointed Defence Secretary on June 11, told the Press Association: “I have a responsibility to make sure I get it right and that is what I’m working to achieve. I pay tribute to my predecessor, he did a great job for defence, but the responsibility is now mine to deliver that plan, and what I need to do is satisfy myself that I’ve got the right level of resource and the right mix of capabilities.” He added that he is working “very closely” with Treasury colleagues and that there “will always be a strong case, not least given the circumstances that we’re operating in, to spend more on defence, but people will understand that there has to be a balance that is struck.”
Despite the political uncertainty surrounding Prime Minister Sir Keir Starmer’s leadership, the outgoing PM is set to press ahead with publishing the DIP before the NATO summit in Ankara on July 7. The government has already committed to significant defence spending increases: in February 2025 it pledged to lift defence spending to 2.5% of GDP by 2027, and to 2.6% when including security and intelligence spending. Starmer has also promised the largest sustained increase since the Cold War, aiming for 3% of national output in the next parliament. NATO’s long-term target for allies stands at 3.5% of GDP by 2035.
As part of the plan, the UK government will commit over £500 million to transform its elite Commando Force with new high-speed boats, lethal strike drones and larger amphibious transport ships. The DIP is also expected to focus on major long-term “exquisite” weapons projects while shifting towards artificial intelligence, drones and autonomous systems, encouraging domestic investment. It will likely confirm the nuclear deterrent as untouchable and commit to the Tempest fighter jet. The nuclear deterrent already accounts for 20% of defence spending in 2025–26, a figure projected to rise to 25%, with the Dreadnought submarine programme costing £41 billion.
Chancellor Rachel Reeves, speaking on a visit to Ukraine, defended her record and said the DIP will be published “imminently” and “certainly ahead of the NATO summit in Ankara”. She said it would be “a detailed account of how we’re going to spend that additional money to meet the scale of the challenges we face today, and crucially, the defence investment plan will be about the wars of tomorrow and today, not of the past.” Reeves noted that she has already overseen “the biggest uplift in defence spending since the end of the Cold War”, but recognised the need to increase that amount further.
Future leadership implications
The decision to forge ahead with the DIP under the current administration could cause friction with Starmer’s likely successor, Andy Burnham, who may want the final say on future military funding. Burnham, the former Mayor of Greater Manchester, won the Makerfield by-election earlier this month and has confirmed he will stand for the Labour leadership. Some sources suggest he could become prime minister in the coming weeks.
Jarvis, who served as mayor of Sheffield City Region while Burnham was Greater Manchester mayor, has publicly backed him. He told the Press Association: “I’ve worked very closely with Andy Burnham. He was an exceptional mayor of Greater Manchester and I think he will be an excellent prime minister, he understands the importance of national security and making sure that we’ve got the right amount of resource to invest in our armed forces.” Jarvis added that defence should be the UK’s “number one spending priority” and that the DIP will deliver more, with further ambition beyond the plan.
Reeves – who faces potentially losing her job under a Burnham government – also joined other Cabinet ministers in publicly backing the newly-elected Makerfield MP for the leadership. She said the new prime minister, “almost certainly going to be Andy Burnham”, would “absolutely stand by Ukraine”.
Meanwhile, Admiral Sir Tony Radakin, the former Chief of the Defence Staff, has warned that the next leader will need to operate “almost like a wartime prime minister” in light of global threats. Speaking on the BBC’s Sunday with Laura Kuenssberg programme, Radakin contrasted Burnham’s “Makerfield test” with what he called the “Moscow test”. He said: “What do we look like to Moscow? Do we look like a strong member of the NATO alliance? Do we look like a strong nuclear power? Do we look like a strong ally of America? Because those are the elements that keep us safe.” Radakin added that the UK currently “falls short” of the level required to counter Russian threats and is “second from the bottom” in a NATO league table for meeting capability requirements. His successor, current Chief of the Defence Staff Richard Knighton, faces the same challenge of securing adequate funding for the armed forces.
