{"id":24370,"date":"2018-11-06T17:57:19","date_gmt":"2018-11-06T17:57:19","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2018\/11\/06\/uk-defense-spending-faces-9-billion-hole\/"},"modified":"2026-08-07T22:00:27","modified_gmt":"2026-08-07T22:00:27","slug":"uk-defense-spending-faces-9-billion-hole","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/global\/europe\/2018\/11\/06\/uk-defense-spending-faces-9-billion-hole\/","title":{"rendered":"UK defense spending faces $9 billion hole"},"content":{"rendered":"\n

LONDON \u2014 The UK Ministry of Defence has issued a new Defence Equipment Plan, detailing how the government will spend \u00a3186 billion ($243 billion) on military wares over the next decade amid an expected \u00a37 billion ($9.1 billion) shortfall.<\/p>\n\n\n\n

The plan sets out to ensure that sufficient funding for all major programs is applied, while in turn meeting the UK\u2019s pledge to maintain a commitment to 2 percent of GDP on defense. Of that amount, 20 percent is earmarked for equipment.<\/p>\n\n\n\n

Both the MoD itself and the National Audit Office (NAO) have highlighted that there is an affordability challenge in the new plan, however, with the coming four years predicted to pose the biggest test to the procurement proposal. Annual budget variances between 6.5 percent and 10 percent are expected during that time, according to government analysts.<\/p>\n\n\n\n

The plan says that the central estimate for the cost of the plan at April 2018 exceeded the allocated budget by an average of 3.7 percent over the coming decade, adding that this prediction will fluctuate as projects play out. <\/p>\n\n\n\n

The NAO\u2019s published response to the new plan claims that it remains unaffordable, and forecasted that costs of \u00a37 billion will come due over the coming ten years. Most of that shortfall, 84 percent, will be felt in the first four years.<\/p>\n\n\n\n

\u201cThis variance could increase or decrease depending on different circumstances, with the department estimating a worst-case scenario of costs increasing by \u00a314.8 billion should all the identified risks materialize. However, some of its analysis remains optimistic and costs could increase further,\u201d NAO analysts wrote.<\/p>\n\n\n\t