UK defence spending received a GBP1.2 billion (USD1.65 billion) boost in the year up to April 2021, thanks to a jump in expenditure on capital projects, including hardware procurement.
The increase in Ministry of Defence (MoD) spending over the figure announced in November 2020 was revealed in documents released on 27 October, as part of Chancellor of the Exchequer (finance minister) Rishi Sunak's cross-government budget settlement.
Sunak reaffirmed the November 2020 plans to increase UK defence spending by approximately GBP24 billion, with further annual increases projected in 2022–23 of GBP700 million, 2023–24 of GBP600 million, and 2024–25 of GBP1 billion above previously announced plans. By 2025 the UK aims to spend GBP48.6 billion on defence, compared with GBP39.8 billion in 2019–20.
Defence sources suggested the budget increases reflect a more relaxed attitude from the UK Treasury (finance ministry) to picking up the cost of additional spending outside the MoD's control, such as foreign exchange fluctuations, staff pay rises, nuclear-related costs, and rising fuel prices. The details of this year's additional spending are not explained in Sunak's documents, and the MoD's annual accounts for last year have not yet been published, despite being due four months ago.
Sunak said that he expected all UK government ministries to reduce civilian payroll numbers to 2019 levels by 2025 as part of a drive to reduce day-to-day running costs by 5%. This would require the MoD to lose just over 1,000 civilian posts.
He also set the MoD “priority outcome metrics”, including boosting the number of procurement projects that are on target for successful delivery against Infrastructure and Projects Authority assessment criteria. He has also set the ministry targets for increasing the number of overseas exercises and appointments of defence attachés and personnel assigned to NATO posts.
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