Stockpile weapons with European allies to tackle defence funding shortfall, report says

The Institute for Public Policy Research (IPPR) think tank has claimed that joint procurement with allies on equipment and munitions could save billions of pounds.

Stockpiling weapons with European allies could help Andy Burnham with the shortfall in the Government’s controversial Defence Investment Plan, new research suggests.

The Institute for Public Policy Research (IPPR) think tank has claimed that joint procurement with allies on equipment and munitions could save billions of pounds.

This would cut costs by combining orders and reducing duplication between European countries.

These measures could create up to £3.4bn in fiscal savings and additional headroom under the current DIP, IPPR estimates.

Laura Chappell, associate director at IPPR, said: “Andy Burnham has a real opportunity as he looks to improve Britain’s defence spending.

“Working with allies, including in Europe and Canada, not only offers the opportunity to procure more efficiently and support reindustrialisation, but it helps us to build the defence alliances we need for the future.

“The UK needs to rely less on US security guarantees. Planning, procuring, and building defence industrial capability with non-US partners can help support this strategic shift.”

The report comes with Mr Burnham and his Chancellor John Healey under pressure to find more money for defence.

Mr Healey has already written to departments, saying they need to be “disciplined on spending, looking at the tough choices and being ready to shift funding away from unproductive or legacy programmes that no longer reflect this administration’s priorities”.

Mr Healey will face significant challenges as he finds more money for Mr Burnham’s devolution priorities and increased defence spending amid warnings the Iran war will further squeeze the public finances.

He will also have to set out how the Government will fund £5 billion of defence spending announced in May’s Defence Investment Plan (Dip) without details of how it would be paid for.

The Chancellor will come under pressure to increase that funding further, having resigned as defence secretary ahead of publication of the Dip, arguing it did not provide enough money for the armed forces.

The Treasury is reportedly looking at how to utilise Rachel Reeves’ changes to her fiscal rules, to unlock additional borrowing.

Mr Healey, the Rawmarsh and Conisburgh MP, would not commit to raising defence spending to 3 per cent of GDP by 2030, but suggested it could form part of next year’s spending review.

“At the spending review, we will set out a clear path to meeting our 3.5 per cent Nato commitment in 2035 and we will set a target date on that path for 3 per cent,” he said in a recent interview with The Times.

IPPR said that to hit the Dip in 2029-30 the Government would have to find £900m, however to raise defence funding to 3 per cent of GDP would require an additional £13bn.

William Ellis, senior economist at IPPR, explained: “Buying equipment jointly with allies and building genuinely shared stockpiles could create up to £3.4bn of additional room under the debt rule, while helping to expand the industrial capacity Britain needs.

“But cooperation cannot make defence free. Reaching 3 per cent of GDP by 2030 would still require around £13bn more each year in today’s prices.

“The government will still have to make honest choices about tax, spending and borrowing.”

The Ministry of Defence said it does not comment on stockpiling for operational reasons.