Information about key areas of the Defence Budget.
The Government plans departmental spending through the process of the spending reviews. As part of most recent settlement, the Defence Budget is set to increase from a baseline of £32.6Bn in 2007/08 to £36.9Bn in 2010/11 in Total Departmental Expenditure Limit (Total DEL). In real terms (i.e. after inflation) it represents average annual growth of 1.5%. By 2010/11 the Budget will be some 11% higher in real terms than in 1997, and represents the longest period of sustained growth since the 1980s.
The Defence Budget
| £million |
2007-08 |
2008-09 |
2009-10 |
2010-11 |
| Resource Budget |
32,618 |
33,602 |
35,165 |
36,702 |
| Capital Budget |
7,404 |
7,871 |
8,187 |
8,871 |
| Total Departmental Expenditure Limit (DEL) |
32,579 |
34,057 |
35,365 |
36,890 |
| Of which near cash |
29,411 |
30,763 |
31,921 |
33,628 |
The extra resources have allowed us to proceed with two new aircraft carriers, the Queen Elizabeth and the Prince of Wales, which will be the largest vessels ever operated by the Royal Navy. We will also proceed with ordering more armoured vehicles for the Army and have recently ordered a sixth C17 Globemaster for the Royal Air Force to increase its strategic lift capacity.
We are also proceeding with a number of other equipment programmes, both to introduce new capability and replace older systems, which will ensure that our Armed Forces remain equipped to meet not only the challenges of today, but of tomorrow as well. The Settlement also ring-fenced £550m from the sale of Chelsea Barracks to be reinvested in improving Service accommodation.
The Ministry of Defence is committed to making value for money savings worth £2.7Bn over the CSR period to reinvest in Defence. Initiatives to achieve this include: a 5% year-on-year reduction in the MOD’s administrative overhead, including a 25% saving in the Department’s Head Office in London and the continued simplification of single Service Budgetary and headquarters structures.
OperationsThe additional net costs incurred on operations (for example in Afghanistan and Iraq) are not paid for from the Defence Budget, but rather by the Treasury Reserve. Since 2001, the Reserve has provided an additional £9.5Bn on top of the Defence Budget to cover operational costs. This reflects over £3.6Bn that has been approved for Urgent Operational Requirements. This is a process designed to provide commanders on the ground with the equipment they need quickly.
International ComparisonsAccording to the latest figures (2007), the UK is the second highest spender (in cash terms) on Defence in the world behind only the United States.At 2.5% (2006) of GDP, the Defence Spending of the UK is above the NATO European average. We spend about the same proportion as France and more than Italy and Germany.Further information on international comparisons can be found in the Stockholm International Peace Research Institute (SPIRI) Yearbook in the related links section of this page.
Government Expenditure
Long DescriptionGovernment spend by function in £bn - please click on image to see larger version.
This chart sets out Government spending by function, which means some elements of the Defence Budget (such as pensions) are stripped out. In 2006/07, spending on Defence measured in this way represents some 5.8% of total UK Government expenditure.Further information on the CSR settlement can be found in the related links section of this page. Information on historical spending on Defence is published by HM Treasury in the Public Expenditure Statistical Analyses (PESA) which is also linked.