The defence budget gap has become a major issue as Andy Burnham prepares to enter Downing Street.
Outgoing Prime Minister Keir Starmer unveiled the government’s new Defence Investment Plan this week. However, the announcement has left Burnham facing a major financial challenge. The plan promises an extra £15 billion for defence by the end of the decade. As a result, military spending will rise sharply over the next few years.
However, officials have only secured £10.3 billion of that total so far. That means a defence budget gap of £4.7 billion remains unresolved. Furthermore, the Treasury confirmed that ministers will settle the remaining amount in the 2026 Budget. Since Burnham takes office later this month, the responsibility will now fall to him.
Sources close to Burnham said the funding shortfall caught his team off guard. Consequently, the incoming government now faces pressure to balance defence promises with wider spending plans. At the same time, economists have warned the problem could trigger difficult choices. These may include higher taxes, deeper borrowing, or cuts in other departments.
Max Werner said the defence budget gap could shape Burnham’s first major decisions as prime minister. He warned the financial pressure may stretch beyond defence alone. Meanwhile, the spending increase marks a bigger settlement than former Defence Secretary John Healey secured before leaving office. His resignation last month followed a dispute over military funding levels.
In addition, the latest plan aims to push defence spending to 2.7% of GDP by 2029. That would be a notable rise from the current level. However, the plan still falls short of NATO’s longer-term target. The alliance wants members to spend 3.5% of national income on defence by 2035.
Therefore, Burnham may soon face even greater pressure from allies. He must decide whether to increase funding further or rethink national priorities. For now, the defence budget gap remains one of the biggest issues waiting on his desk. As his first Budget approaches, the challenge could define the early days of his premiership.
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