Kemi Badenoch, the Conservative leader, has warned that Labour's recently announced defense plans are "completely unravelling" due to a significant funding shortfall. Downing Street has acknowledged that savings crucial for the £15 billion, four-year defense initiative have yet to be identified.
Prime Minister Keir Starmer unveiled the long-delayed Defence Investment Plan on Tuesday, asserting it would bolster Britain's armed forces against potential threats. However, Treasury documents indicate that approximately £4.7 billion of the required funding is unfunded and will need to be secured in the upcoming Budget. Additionally, final decisions on departmental savings totaling £10.3 billion have been deferred until the autumn, after Starmer is no longer Prime Minister.
Concerns have been raised that the funding gap could lead to the delay or cancellation of up to 20 hospital construction projects. Labour Members of Parliament are already voicing opposition to the scrapping of three road schemes, which represent the only identified savings thus far, and are urging Andy Burnham to reconsider these cuts.
Downing Street stated that Burnham was briefed on the outline of the defense plan, but allies of the potential future Prime Minister indicated he was not informed about the funding deficit. One ally described Burnham as "furious" about being left to address an issue Starmer has reportedly considered for a year.
Further complicating the situation, Air Chief Marshal Sir Richard Knighton, Chief of the Defence Staff, has stated that spending needs to increase to 3.5 percent of GDP to fully implement last year's strategic defense review, a figure considerably higher than the 2.7 percent agreed upon by Starmer.
Ruth Curtice, chief executive of the Resolution Foundation, estimated that an additional £25 billion would be required to bridge the funding gap. She described this as an "enormous sum of money," equivalent to a 3 pence increase in the basic rate of income tax, necessitating a national discussion on how to fund it.
During parliamentary exchanges, Badenoch criticized Starmer's plan, stating it "has completely unravelled, because he has not found the money to pay for it." She added, "We all know that he is leaving this mess to his successor."
Badenoch suggested that the £4.7 billion deficit is nearly equivalent to the welfare savings that Starmer abandoned last year due to opposition from Labour backbenchers. She argued that Starmer was "too weak to cut welfare when he had the chance" and that the proposed defense plan is "too weak, it is too little and it is too late."
Sir Keir Starmer, however, described the plan as "the most significant upgrade in defence spending since the 1980s" and maintained that it is standard practice for governments to finalize funding for new initiatives at the Budget.
Questions also persist regarding the funding for the remaining portion of the package. Government departments have been instructed to reduce their capital budgets by one percent. The Department for Transport is set to cut an additional £700 million from its roads budget, and the energy department is losing £2 billion.
While Downing Street confirmed that the initial phase of the New Hospital Programme would not be affected, it could not rule out cuts or delays to 18 projects in subsequent phases. The King's Fund, a health think tank, warned that such delays could negatively impact patient care and described potential cuts as a "false economy."
Sir Keir suggested that Burnham might use the government's fiscal "headroom" for part of the shortfall, which would involve increased borrowing. However, Rachel Reeves cautioned against this approach, emphasizing that increased spending is contingent on adhering to fiscal rules. She argued that "A Britain spending beyond its means is a weak Britain – one that is more vulnerable to global shocks," and that such weakness could be exploited by adversaries, to the detriment of national security.
