Is Andy Burnham facing a £5bn defence funding hole?

By Ben Chu  and  Tom Edgington , BBC Verify Published 27 minutes ago The Defence Investment Plan (DIP) increases military spending by £15bn over the next four years and Prime Minister Sir Keir Starmer has described this as "a historic shift", although critics say that this new money is still insufficient to keep the country safe. Attention has turned now to how the extra spending in the DIP will be funded, with the Treasury revealing that the savings identified from other departments do not cover the full planned rise for defence. This has resulted in talk of a "£5bn defence black hole" which could be a problem for Sir Keir's presumed successor Andy Burnham. BBC Verify has looked into these figures to put them into context. Is there a £5bn hole? The Treasury has released a table showing that in the four years to 2029-30 defence spending will rise by an average of £3.75bn each year compared with its previous plans following the publication of the DIP. The government has added up those annual increases to produce the figure of £15bn of extra spending on defence over four years. The Treasury table also shows that around £1.2bn a year of that annual £3.75bn a year rise still has to be found and will be outlined in the Budget later in the year. Adding up these annual funding shortfall figures over four years gives a total of £4.7bn. However public finance experts say it's better to talk about budget shortfalls in annual terms, rather than cumulative totals spread over several years, which can produce exaggerated and confusing numbers. So a clearer way to discuss the size of the DIP funding shortfall is around £1.2bn a year. It is true that the next Budget - due in the autumn and Burnham's first assuming he becomes prime minister - will have to fund that gap whether through additional spending cuts, tax rises or additional borrowing. Is £1.2bn a big number? Total Whitehall departmental spending in 2026/27 is projected to be £678bn so £1.2bn represents only a small fraction of that - 0.17%. £1.2bn is an even smaller fraction (0.1%) of total tax revenues which are forecast to be £1,170bn in 2026/27. However, it's probably more appropriate to compare the funding gap figure to the amount of headroom - or leeway - that the Chancellor Rachel Reeves left herself against meeting her chosen fiscal rule, which is to balance day-to-day spending with tax revenues by the final year of the Parliament. The 2026 Spring Statement left her headroom of around £24bn against meeting this goal, so £1.2bn would represent around 5% of that. Will Starmer's plan for defence help UK hit Nato's spending target? Published 18 hours ago Will Andy Burnham's devolution plan raise economic growth? Published 1 day ago What's happened to UK defence spending? Published 11 June Ruth Curtice of the Resolution Foundation said this does create a relatively large figure in the context of budget gaps, pointing out to BBC Radio 4's Today programme that a decade ago all the new