Ministers are facing a backlash from military chiefs and the defence industry over delays to the multi-billion pound plan to boost the armed forces.
The publication of the Defence Investment Plan (DIP) was expected this Tuesday, 2 June, to coincide with the one-year anniversary of the Strategic Defence Review (SDR), The i Paper understands.
But the plan – which was originally due for release last autumn – has been held up once again due to an ongoing Whitehall battle over funding.
As the plan was once again delayed, Russian drones hit an apartment block in Romania in the early hours of Friday morning, causing alarm across Nato.
Defence insiders said the attack needed to focus minds in Whitehall about the need to get the plan published.
A former general warned the July Nato summit in Ankara had to be a “huge driver” for getting the DIP published to reassure allies, the UK military and the country’s defence industry.
The ex-military chief added: “The government must know it will get attention it won’t enjoy if it hits the [SDR] anniversary without finalising the DIP.”
The DIP is expected to cost as much as £18bn, although there has been a disagreement over whether the government can afford the price tag, with alternatives of £12bn and £15bn being proposed.
However the plan itself is still being held up because the funding has not yet been approved by the Treasury.
A defence industry insider said: “Defence companies by and large that think they have a good system or products worth buying are hoping it is worth the wait, but investors are looking at the UK vs many other countries in Europe and asking if we’re serious.
“And that’s bad for all of us, because we’re going to need a lot of private capital as an industry in addition to governments spending more.”
Shadow defence secretary James Cartlidge warned the Labour leadership debate, in which Andy Burnham and Wes Streeting are fighting over a soft-left agenda where defence has so far not been discussed, risked taking the urgency out of the issue for the government.
He said: “Delays to the publication of the Defence Investment Plan are causing ongoing uncertainty for the defence industry, threatening jobs and the viability of UK SMEs [small and medium-sized enterprises].
“With Russia testing the boundaries of Nato in Romania, and nearly a year since the Strategic Defence Review, we need a plan to keep the UK safe.”
The Conservatives are planning to table a Commons amendment that would require the DIP to be released within a month of the Armed Forces Bill getting royal assent – to highlight the delay.
The Institute for Fiscal Studies said the government would have to cut spending, increase taxes or borrow more to fund the DIP.
Rachel Reeves’ fiscal rules allow for her to borrow more to fund investment, but the IFS said this would be unsustainable in the long-term, meaning the Chancellor would have to go for spending cuts or tax rises.
While the extra funding for the DIP is intended to be over four years, the wider context of global insecurity and conflict means that the extra demands for more money for defence will be persistent into the future.
Bee Boileau, research economist of IFS, said: “Like any new government spending commitment, there are broadly three ways to fund an increase in defence spending (spending less on other things, increasing taxes, or borrowing more).
“The government could choose to do any of these things (or some combination of them) to fund any top up to the defence budget. Their exact choices won’t need to be specified until the Autumn Budget – although the government could choose to tell us alongside any announcement.
“Much of the recent increases in defence spending have been for investment spending. The current fiscal rules give a bit more space for investment spending, which may make some additional borrowing more feasible within the fiscal rules.
“However, it is unlikely to be sustainable to fund a permanent increase in defence spending through permanently higher borrowing.”
It is understood the DIP will “100 per cent” be published at some stage but there is no date confirmed for publication yet.
A government spokesperson said: “The Defence Investment Plan will deliver the best kit and technology into the hands of our frontline forces at speed, while investing in and growing the UK economy.
“We are working to finalise the Plan and it will be published as soon as possible.”
