RUSI Briefing says UK defence spending due to fall below NATO target of 2% of GDP in 2015

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A new study for RUSI shows that – on current spending plans and growth projections – the UK’s defence budget (excluding spending on any new operations) is set to fall to an estimated 1.88% of GDP in financial year 2015/16. The finding comes amidst calls by the UK government at the Wales NATO Summit for all member states to meet the alliance’s target of spending at least 2% of GDP on defence.

The new RUSI Briefing Paper, authored by RUSI’s Director of Research and UK Defence Policy, Professor Malcolm Chalmers, shows that existing Ministry of Defence (MoD) planning assumptions (for modest real-terms growth in its budget after 2015/16) would also, in the context of projected GDP growth, see spending falling to around 1.7% of GDP by 2020/21.

Even this scenario may be over-optimistic because of wider government plans for spending cuts after 2015/16. Further cuts in the 2015 Spending Review (of between 4% and 10% in real terms over five years), Chalmers argues, could see defence spending falling further, to between 1.5% and 1.6% of GDP in 2020/21. 

Given the risk of further such cuts, Chalmers argues that it would be in the Ministry of Defence’s interests to support the holding of the next Strategic Defence and Security Review in parallel with (rather than subsequent to) the 2015 Spending Review. This would help to ensure that government leaders (in both 10 and 11 Downing Street) are fully aware of the capability consequences of proposed spending cuts before they are finalised.

Because of the short time involved in such a schedule – perhaps only three months after the election before key capability choices need to be made – the MoD will need to complete much of the detailed work on the feasibility and cost-effectiveness of a range of possible policy options in advance of the May 2015 general election. Without such work, government ministers could find themselves – as in the last SDSR in 2010 – being forced to make key decisions without adequate supporting data.

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