"Money may not be there": Calls for Royal Navy, Army and RAF funds as meeting set to deal with £28bn shortfall

The Unite union, which represents workers in the defence sector across the country, is pushing for the Defence Investment Plan (DIP) to be released and fully support. As reported in the Financial Times, Number 10 is considering whether it should relax its fiscal rules to fully adopt the DIP - delayed since the autumn of 2025.

Unite general secretary Sharon Graham said: “Keir Starmer promised when he announced defence spending that it would be good for British growth, British jobs, British skills and innovation. Unite has been calling for the Defence Investment Plan to live up to this rhetoric.

“So far we have had promise after promise and now at the final hurdle we are being advised that the money may not be there. The first priority of a government is to defend its people. That means investing in the British defence industry here at home. Unite has called for a change in the fiscal rules to allow the government to borrow to invest. What are they waiting for?’

What problems are the government facing?

Concern arose about the DIP in January, after the Chief of Defence Staff, Air Chief Marshal Sir Richard Knighton, reportedly met with the prime minister to discuss a £28bn shortfall in defence over the next decade. Appearing before the defence select committee, he cast doubt over whether the recommendations in the Strategic Defence Review (SDR) could be fully funded alongside the UK’s current commitments to the Royal Navy, Army, RAF and wider sector.

This is despite government pledges to raise defence spending to 2.6 per cent of GDP by 2027, and meet Nato’s target of 3.5 per cent on core defence spending by 2035. The Financial Times reports that officials are examining creative solutions to override the funding gap within the armed forces. Sources said advisors will make progress on formulating a blueprint within the next few weeks, and discuss the multi-billion pound shortfall.

The SDR recommendations, fully accepted by the government, cost at least £67.6bn to implement through to the late 2030, the FT said. While the DIP is facing delays, decisions on key contracts are lapsing. This includes the new-medium helicopter programme.

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Tanmanjeet Singh Dhesi, chair of the defence select committee, said the country’s sovereign capability to produce helicopters could be under threat due to “government indecision”, following reports in The Times. Speaking in the House of Commons yesterday (February 2), he added: “Apparently, the Treasury has deemed that they may not be essential to operations going forward. Can the secretary of state confirm if it’s the MoD, or the Treasury, which decides on defence procurement priorities. When will the decision to award the medium-lift helicopter contract finally be made?”

Defence secretary John Healey responded: “His committee will know a great deal more about this than the Times. He will know that there’s a current contact process underway, and a competitive process for the medium-lift helicopter. We’re working flat out to finalise the defence investment plan, and as part of that plan, we’re dealing with a programme of record, a previous commitment to equipment that was hugely overcommitted, underfunded, and in some cases, unsuited to the threats we face.

“For the first time for nearly 18 years, this is a defence department taking a line by line approach and building up our plans for the future.”