Daily Junction.mobi portalWorld · January 22, 2025 · Liam Chen · 17 min
Britain's defence budget reached £57.8 billion in 2024-25, exceeding NATO's 2% GDP target. Yet equipment delays, recruitment shortfalls, and rising costs mean the UK struggles to field combat-ready forces despite increased spending.
Britain's defence budget reached £57.8 billion in 2024-25, representing 2.3% of GDP and comfortably exceeding NATO's 2% spending target. The UK ranks third in NATO by total defence spending (after the United States and Germany) and fifth globally (after the US, China, Russia, and India). On paper, Britain remains a major military power with nuclear weapons, aircraft carriers, advanced fighter jets, and global reach. In practice, the armed forces face severe challenges: the Army has shrunk to its smallest size since the Napoleonic Wars, major equipment programmes are years behind schedule and billions over budget, and the Ministry of Defence (MoD) confronts a £16.9 billion funding gap over the next decade. Meeting NATO's percentage target does not guarantee military capability—and the gap between Britain's defence ambitions and the resources available to deliver them has never been wider.
The UK's £57.8 billion defence budget for 2024-25 breaks down as follows, according to the Ministry of Defence's Annual Report and Accounts:
The largest single programme is the Dreadnought-class nuclear submarines (£31 billion over 30 years), which will replace the current Vanguard-class boats carrying Britain's Trident nuclear deterrent. Other major equipment programmes include:
At the 2014 NATO summit in Wales, all member states committed to spending at least 2% of GDP on defence by 2024. The target was introduced in response to Russia's annexation of Crimea and concerns that European NATO members were free-riding on American military power. As of 2024, only 11 of 32 NATO members meet the target: the United States (3.5%), Poland (4.1%), Estonia (3.4%), Lithuania (3.0%), Finland (2.4%), Romania (2.4%), Hungary (2.4%), Latvia (2.3%), the UK (2.3%), Greece (2.3%), and Slovakia (2.1%).
The UK has met the 2% target every year since 2015, and successive governments have committed to maintaining it. However, the 2% figure is a political metric, not a measure of military capability. It tells you how much a country spends relative to the size of its economy, but not whether that spending delivers effective armed forces. The UK's 2.3% includes:
Strip out pensions, Ukraine aid, and intelligence, and the UK's "core" defence spending falls to around 1.8% of GDP—below the NATO target. This is not cheating (all NATO members use similar accounting), but it shows that the headline percentage can be misleading.
In November 2024, the National Audit Office (NAO) published its annual review of the MoD's Equipment Plan 2024-2034, which sets out what the armed forces want to buy over the next decade. The NAO found a £16.9 billion gap between the cost of the plan (£305.6 billion) and the funding available (£288.7 billion). This gap has grown from £10.9 billion in 2023 and £16.5 billion in 2022, and the NAO warned it is likely to widen further as costs rise.
The funding gap exists for several reasons:
Defence equipment is subject to cost inflation that typically runs higher than general inflation. Factors include:
The MoD's budget has grown in cash terms, but not fast enough to keep pace with these cost pressures. The 2024-25 budget of £57.8 billion is up from £52.1 billion in 2023-24, but much of the increase is absorbed by inflation rather than buying more capability.
Several of the MoD's largest equipment programmes are significantly over budget and delayed:
When programmes overrun, the MoD must either find extra money (which comes from other programmes or capabilities) or accept delays and reduced quantities.
Successive governments have announced new defence capabilities without allocating the funding to pay for them. Examples include:
The NAO concluded that the MoD must either secure additional funding, cancel or delay programmes, or accept capability gaps. Without action, the funding gap will continue to grow.
The British Army has 73,000 regular troops as of January 2025, its smallest size since the Napoleonic Wars (when the Army had around 70,000 regulars in 1815, though this excludes militia and reserves). The target is 82,000, meaning the Army is 9,000 short—a 12% shortfall. The Royal Navy has 33,000 personnel against a target of 35,000, and the Royal Air Force has 34,000 against a target of 35,000.
The armed forces have struggled to recruit and retain personnel for several reasons:
Military pay has lagged behind the private sector and even other public sector jobs. A newly qualified Army infantry soldier earns £23,496 per year, compared to £28,000 for a police constable or £30,000 for a train driver. The 2024 pay rise for armed forces personnel was 5%, below inflation and below the 7% awarded to police and NHS staff.
Service personnel also face:
In 2012, the MoD outsourced Army recruitment to Capita, a private contractor, in a deal worth £1.36 billion over 10 years. The contract has been widely criticised:
The armed forces draw recruits primarily from working-class communities in the Midlands, North, Scotland, and Wales. These communities have been hit hard by deindustrialisation, austerity, and the cost-of-living crisis, and fewer young people see the military as an attractive career. The Army's traditional recruiting grounds—former mining and industrial towns—have shrunk.
The armed forces also face competition from other employers. Unemployment is low (4.2% as of January 2025), and young people have more options than in previous decades. The military's offer—modest pay, frequent moves, risk of injury or death—is less compelling when civilian jobs are plentiful.
The MoD's equipment programme is plagued by delays, cost overruns, and capability gaps:
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