Funding boost for armed forces

The first budgeted real terms increase in the defence budget for over a decade was announced today by the Chancellor Gordon Brown, reflecting the Government's commitment to strong defence and the continued modernisation of Britain's Armed Forces.

As a result of this new injection, the defence budget will rise from £22,975 million this year to almost £24,978 million by 2003-04.

The settlement provides the resources the Ministry of Defence needs to take forward implementation of the Strategic Defence Review (SDR) - the fundamental restructuring of our forces to meet the challenges of the modern world - taking account of operational lessons learned and other priorities which have emerged since SDR was announced in 1998.

It will ensure that our Armed Forces have the equipment and training they require to

move quickly to crises and to make a real difference when they get there. Procurement techniques have been dramatically overhauled and levels of efficiency achievement have been good, meaning that resources freed up can be reinvested in the front line.

Welcoming the announcement, the Secretary of State for Defence Geoffrey Hoon said:

"The growth in the defence budget is a vote of confidence by the Government in the quality and effectiveness of our Armed Forces. It shows that this Government is serious about defence. It is recognition of the important and magnificent work done by the Armed Forces since this Government came to power: in Kosovo; in Sierra Leone; in the Gulf; East Timor and elsewhere, helping people who cannot help themselves.
"The settlement also recognises that whilst the British Armed Forces have risen to every challenge, doing so has imposed strains, and has exposed deficiencies. The Government is serious about relieving those strains, and correcting those deficiencies. The new money will help to do that.
"We will also ensure that we continue to improve the efficiency of defence, freeing up resources wherever possible, and disposing of assets - land, buildings, fighting equipment and stores - that we no longer need. We are not alone in that. All Government Departments are being asked to do the same. With an increasing Defence Budget, every penny of efficiency savings and from asset disposals can be used to improve defence capability."

Together with the new cross-cutting conflict prevention budgets, this settlement provides the resources to ensure that our Armed Forces remain the best in the world.

Over the Spending Review period the process of implementing the SDR will continue. The SDR's conclusions have already been reinforced, by the successful operations in Kosovo, East Timor and Sierra Leone and elsewhere. New, world class equipment such as the Apache and new Strategic Lift, and initiatives such as Joint Force Harrier and the Joint Rapid Reaction Forces will further improve operational capability over the next few years.

Notes for editors

1. MOD Spending Plans:

£ million	2000-01	2001-02	2002-03	2003-04
Total Resource Estimate*	22,975	23,570	24,198	24,978
of which: Current Resource DEL	17,750	18,076	18,485	18,731
Capital Resource DEL Budget**	5,225	5,494	5,713	6,247
* Departmental Expenditure Limit ** Capital spending shown here includes expenditure on fighting equipment (1)

Note:

(1) National accounts classify some defence expenditure as current on the grounds that they are military assets. Following the introduction of resource accounting it has been agreed that this expenditure should be treated as part of the capital budget, which adds some £3.5 billion a year to the capital budget.

2. For details of the Ministry of Defence's performance against objectives and priorities see the 1998/99 Performance Report. If you have access to the Internet, you can visit the MoD's web-site at

External links

MOD website

3. In addition to the headline figures for 2001/02, the Defence Budget will benefit from an additional £250 million from the Reserve on the successful launch of the DERA Public Private Partnership.

4. The Public Services Agreement (PSA) commits the Department to continuing to achieve greater value for money from defence expenditure through:

the delivery of 3 per cent efficiency each year;
Smart Procurement savings of £750 million across the period; and

at least £600 million from assets sales (in addition to DERA) by March 2004.

5. For more details please contact the MOD Press Office on 020 7218 3257.

External links

Further Information: Ministry of Defence