MoD 'facing £1bn-a-year funding shortfall'

Ewen MacAskill ​ Defence correspondent​
An F-35 fighter plane. Photograph: George Frey/Getty Images

The Ministry of Defence has said it could not verify the accuracy of a report that it is facing a £10bn funding shortfall as a result of escalating costs of new ships and jets.

The MoD has struggled over the past decade to maintain a credible military force in the face of Treasury cuts that have seen the army, navy and air force shredded. It has also been squeezed by huge budget miscalculations over the cost of the Trident nuclear programme, the purchase of the F-35 fighter from the US and two new aircraft carriers.

The Times, citing defence industry sources, said the MoD was facing plugging a £1bn hole each year for the next decade because the Trident nuclear submarine programme is set to exceed £41bn as will new jets for the carriers.

One of the casualties, according to the Times, would be a reduction in the size of the Royal Marines.

An MoD spokesperson said: “It is unclear how the figures presented by the Times have been calculated and, therefore, we cannot verify their accuracy.”

The spokesperson said the MoD’s £35bn defence budget is continually monitored. In the 2015 defence review, the MoD announced an £11bn investment package that the military at the time welcomed as a reverse in policy after years of cuts.

But the MoD has admitted that its investment programme is based on delivering efficiency savings that are proving hard to achieve.

Defence spending is a sensitive issue, one that will be raised on Friday when the defence secretary, Sir Michael Fallon, meets his US counterpart James Mattis in London.

The MoD proudly maintains that it spends 2% of GDP on defence, unlike other members of Nato such as Germany, France and Italy.

But critics within the armed forces as well as outside say the UK has made serious strategic mistakes in spending on expensive projects such as Trident and two aircraft carriers at the expense of conventional forces.