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Current defence expenditure

The Ministry of Defence regularly publishes details of defence expenditure over the last several years. The headline figure for defence spending is the Total Departmental Expenditure Limits (TDEL): ‘the sum of the resource and capital expenditure, minus depreciation and impairments and fixed assets written on/off’.

The latest outturn of data from the Ministry of Defence shows that in 2019/20 £39.8 billion was spent on defence. This was a nominal increase of around £1.8 billion on the year before and a real term increase of around £1 billion.

The Prime Minister announced on the 19 November 2020 that the defence budget would increase by £16.5 billion over four years above the Conservative manifesto commitment to increase the defence budget by at least 0.5% above inflation. The Spending Review 2020 describes the funding settlement as being ‘an increase in defence spending of £24 billion in cash terms over the  next four years against the 2020/21 budget’.

According to the BBC, Ben Zaranko of the IFS, has suggested that these figures are potentially misleading. He believes that it ‘would be more accurate to say that by 2024/25, defence spending will be £7 billion higher’ in real terms compared with 2019/20.

By describing the increase as £24 billion in cash terms against 2020/21 the Government seems to be talking about cumulative increases – it appears the Government may have taken the cash difference between 2020/21 and each subsequent year and added them up. This is opposed to the more conventional method which simply takes the difference between a starting and ending year.

This is similar to what happened a couple of years ago with NHS spending as covered by FullFact. The way the figures have been presented by the Government in the Spending Review 2020 are not factually wrong, although they are not necessarily how people usually describe increases or decreases in funding.

The conventional method shows that, based on the spending plans published Spending Review (and updated by Budget 2021), defence spending in 2024/25 will be around £47.4 billion in real terms (assumed 2019/20 prices). This is £7.5 billion more than the budget in 2019/20 and £5.6 billion more than the budget for 2020/21.

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