The government expected to be led by Andy Burnham later this month will need to identify an additional £4.7 billion to fully fund the UK’s newly unveiled defence investment programme, according to Defence Minister Luke Pollard.
The funding shortfall emerged after outgoing Prime Minister Sir Keir Starmer announced a £15 billion defence package covering the next four years.
While the plan outlines a major boost to military spending, the Treasury has confirmed that only £10.3 billion in savings have so far been identified, leaving the remaining amount to be found in the next Budget.
Autumn Budget Expected to Address Missing Funds
Speaking to BBC Breakfast, Pollard said the responsibility for securing the remaining money would fall to the next chancellor, regardless of who ultimately takes the role.
He explained that more than £4 billion would be allocated during the autumn Budget, describing it as standard government practice to announce long-term spending plans before setting out the detailed funding arrangements during a major fiscal statement.
Pollard added that the previous administration had frequently followed the same approach.
Burnham Yet to Reveal Funding Strategy
Andy Burnham, who is widely expected to become prime minister on 20 July, has not publicly explained how he would cover the funding gap or whether he intends to increase defence spending beyond the current commitments.
Speculation also continues over the future leadership of the Treasury.
If Burnham moves into Downing Street, Chancellor Rachel Reeves is widely expected to leave the post, with Energy Secretary Ed Miliband considered a leading candidate to succeed her.
Pollard noted that Reeves had previously built financial “headroom” into last November’s Budget to prepare for unexpected costs, giving the next chancellor flexibility when making spending decisions later this year.
Burnham Briefed Shortly Before Announcement
Pollard also revealed that Burnham was informed about the defence funding gap only a day before the Treasury published the financial details.
According to the defence minister, Downing Street had maintained regular communication with Burnham’s advisers and updated the Labour leadership contender as the spending figures were finalised.
A source close to Burnham described the funding shortfall as another significant financial challenge awaiting the incoming administration.
Defence Secretary Defends Spending Approach
Defence Secretary Dan Jarvis acknowledged that further discussions would be required with the next prime minister to secure the necessary resources for the armed forces.
However, he argued that it was entirely appropriate for the remaining financial decisions to be made during the autumn Budget rather than alongside the announcement of the defence strategy.
Jarvis said publishing the long-awaited Defence Investment Plan had removed months of uncertainty and insisted he remained determined to ensure the armed forces receive the investment needed to meet the government’s commitments.
Defence Spending to Rise Over Coming Years
Sir Keir’s plan commits the UK to steadily increasing defence expenditure from 2.6% of national income in 2027 to 2.7% by 2030, taking annual defence spending to nearly £80 billion.
The outgoing prime minister also reaffirmed his ambition for Britain to spend 3% of GDP on defence during the next five-year Parliament, although he stopped short of providing a firm timetable.
The strategy also aims to place the UK on course to achieve NATO’s long-term target of spending 3.5% of GDP on core defence by 2035.
Spending Cuts Elsewhere to Finance Military Investment
Rather than increasing government borrowing, Sir Keir said the additional defence spending would be financed by reducing long-term capital investment budgets across other government departments by 1%.
Among the measures already announced is a further £700 million reduction in transport spending, placing major road schemes—including the A38 Derby Junctions project and the A46 Newark Bypass—under review for possible cancellation.
The Department for Energy Security and Net Zero is also expected to contribute an additional £2 billion in savings, with detailed proposals due later this year.
Road Project Cuts Spark Political Opposition
The proposed reductions to transport investment have already triggered criticism from politicians representing affected areas.
East Midlands Mayor Claire Ward described the potential cancellation of road projects as “completely unacceptable,” while Reform UK MP Robert Jenrick called for an urgent explanation from the Transport Secretary over the uncertainty surrounding the A46 Newark Bypass.
Foreign Office minister and Lincoln MP Hamish Falconer also expressed disappointment over the project’s future, while Mid Derbyshire Labour MP Jonathan Davies warned that reducing infrastructure investment could slow economic growth.
Incoming Government Faces Difficult Spending Choices
With the Defence Investment Plan now unveiled, attention is shifting to how the next administration will balance increased military commitments against growing pressure on public finances.
The autumn Budget is expected to become the first major test for the incoming government as ministers decide how to bridge the £4.7 billion funding gap while managing competing demands across transport, energy and other key public services.
