Why Starmer's defence plan leaves next PM with £4.7bn headache

The government's Defence Investment Plan has left Sir Keir Starmer's successor facing a significant financial headache that will need to be resolved at the autumn Budget.

The £15bn spending increase for the armed forces over four years - described by the Prime Minister as "a platform on which I know my successor will build" - contains a major funding shortfall. The Treasury has confirmed that only £10.3bn of the £15bn committed has actually been identified, leaving a remaining £4.7bn to be found at the next Budget.

This task will likely fall to Andy Burnham, expected to become Prime Minister next month. Defence Secretary Dan Jarvis admitted that "we need to do more beyond today's announcement" but would not confirm whether Burnham had been told he would need to find the £4.7bn gap should he reach the top job.

The shortfall has overshadowed what was intended as flagship defence policy. John Healey, the previous defence secretary, resigned over his unhappiness with the amount of money attached to the plan. His allies claimed that "Treasury trickery" had inflated the figures. Healey made clear in Parliament that he still did not believe the £15bn package was enough.

Jarvis, who replaced Healey weeks ago, managed to secure an extra £1.5bn from the Treasury, credited to a collegiate relationship with Chancellor Rachel Reeves. However, he acknowledged the overall increase remained insufficient.

The investment plan also relies on £10.7bn of defence efficiencies being found by 2030, with little detail provided on how this would be achieved. Almost every Labour MP who spoke during debates said the money currently available does not go far enough.

Burnham has held constructive talks with Healey about defence spending, but security constraints meant he was not fully briefed on the proposal and did not sign off the complete plan. The extent to which he understands the full financial challenge awaiting him remains unclear.