Keir Starmer is preparing to make targeted spending cuts across multiple government departments to finance a long-awaited Defence Investment Plan.
The prime minister intends to reduce transport and net zero spending by one per cent, raising approximately £6bn for defence costs by the end of this parliament.
Capital spending, which funds infrastructure and building projects across all government departments, will also face reductions under the proposals reported by The Times.
The net zero department, led by Ed Miliband, and Heidi Alexander’s transport ministry are both set to face further cuts under the plans.
The highly anticipated Defence Investment Plan, estimated to provide between £15bn and £18bn of funding, was due to be published last week but talks continued over the weekend in its absence.
The savings will fund the Strategic Defence Review, a ten-year plan involving the creation of a new nuclear warhead, a fleet of combat drones, and next generation Tempest fighter jets.
While many ministers have opposed the cuts, the majority have now accepted them following internal negotiations within government.
Chancellor Rachel Reeves is reported to be “deeply frustrated” with Starmer’s decision to redirect funds toward defence, though she is working with No 10 to reach a solution.
The Ministry of Defence said the Defence Investment Plan will “deliver the best kit and technology into the hands of our frontline forces at speed, while investing in and growing the UK economy.”
The plans follow Nato’s military chief, Admiral Giuseppe Cavo Dragone, urging Britain to accelerate the delivery of its defence pledges last weekend.
Key public services including the NHS and schools are also set to face budget pressures as a consequence of the capital spending reductions being considered.
A one per cent cut to the Department for Health and Social Care’s capital funding alone would amount to £580m, raising serious concerns among health policy experts.
NHS England’s maintenance backlog is already sitting at a record £16bn, and despite Labour raising overall health funding, capital spending has remained stagnant.
“While many people can understand the need to increase defence, this will potentially come at a cost to the quality and access of healthcare,” said Siva Anandacivam, director of policy at the King’s Fund health think tank.