2025 spend figures released

Homeland January 30, 2026

Editorial credit Alex Segre Shutterstock.com

The UK Ministry of Defence (MOD) has published its “Departmental Resources 2025” report, providing a comprehensive audit of defence expenditure and establishing a financial baseline for the nation’s military capabilities.

The annual guide is designed to ensure transparency and accountability to Parliament and the public, detailing spending trends and expenditure types in comparison to other government departments. For industry stakeholders and those within the UK defence supply chain, this report serves as a critical point of reference, documenting the fiscal “status quo” prior to the full implementation of the Strategic Defence Review (SDR) and the government’s commitment to reach a 2.5% GDP spending target.

The data, which primarily reflects the 2024-25 financial year, outlines the MOD’s budgetary landscape before the most recent shifts in industrial policy. A central component of the report is the distinction between Resource Departmental Expenditure Limits (RDEL) and Capital Departmental Expenditure Limits (CDEL). For prime contractors and sub-contractors, the CDEL figures are particularly significant, as they represent the capital allocated for long-term investment in new equipment, advanced technologies, and critical infrastructure. Conversely, RDEL figures provide insight into the day-to-day operational costs, including personnel pay and the maintenance of existing platforms, which remain a substantial driver of activity for firms specialising in equipment support and sustainment.

Further analysis within the report provides a “commodity-level” breakdown of where defence funds are allocated. This granular view reveals the scale of spending across various sectors, including inventory management, infrastructure development, and research and development. For Small and Medium-sized Enterprises (SMEs) looking to enter or expand within the sector, these figures highlight the consistent demand for support services and logistics that underpin the UK’s sovereign capabilities. The report also accounts for Annually Managed Expenditure (AME), which includes more volatile costs such as pensions and provisions, ensuring a full accounting of the department’s financial liabilities.

As the Ministry of Defence prepares for a faster rate of spending growth later in this Parliament, these statistics provide the foundation upon which future procurement and modernisation programmes will be built. The 2025 guide confirms that while the department operates with necessary levels of data sensitivity, the current financial trajectory is focused on sustaining readiness while preparing for the integration of next-generation assets.

Key Statistics

In the 2024/25 financial year, total Defence Spending (Resource and Capital DEL minus depreciation) reached £60.2 billion.

This represents a nominal increase of £6.3 billion from the previous year, which equates to a 7.7% increase when adjusted for inflation.

Defence is now the 4th largest area of UK government expenditure, moving up from 5th place in 2023/24. Under HM Treasury accounting, Defence spending (£79.8 billion) accounted for 6.7% of total government spending in 2024/25

The main areas of expenditure include:

1. Equipment Expenditure

The MOD spent an estimated £27.4 billion on equipment in 2024/25, representing a significant portion of its total budget. This expenditure is categorised into:

• Specialist Military Equipment (SME): Items used exclusively for military purposes, such as warships. Spending in this area increased by £906 million (9.3%) compared to the previous year.

• Property and Other Equipment: This block saw the largest absolute year-on-year increase, rising by £2.2 billion (32%) to cover property and non-military equipment like IT systems.

• Equipment Support: This includes the maintenance, repair, and updating of existing assets, which saw a nominal increase of £1.1 billion in 2024/25.

2. Personnel Costs

Combined personnel costs account for just over a quarter of all MOD expenditure. In 2024/25, these costs totalled £15.8 billion.

• Service Personnel: This area saw its largest nominal year-on-year rise since 2011/12, increasing by £1.2 billion (10.3%).

• Civilian Personnel: Costs increased by £75 million (2.9%) in current prices, though this represented a slight decrease when adjusted for inflation.

3. Operations and Peacekeeping

The MOD spent £3.4 billion on operations and peacekeeping in 2024/25. This covers the “net additional costs” incurred beyond standard departmental running costs, such as deployment and specialised weaponry. Key expenditures included:

• Support to Ukraine: Totalled over £2 billion annually for the last three years, with £2.9 billion committed in 2024/25.

• Israel Conflict: Costs reached £46 million for deterrence and humanitarian aid efforts.

• Other Operations: Including activities in the Wider Gulf, Iraq, and the Middle East.

4. Research and Development (R&D)

Net expenditure on R&D reached £3.1 billion in 2024/25, a 12% increase after adjusting for inflation. This includes:

• Research: Spending increased by £204 million, primarily driven by work undertaken outside the department (extramural).

• Development: Spending rose by £222 million, also largely due to external activity.

5. Consultancy

While a much smaller portion of the budget, the MOD spent £82 million on consultancy in 2024/25. This funds external specialist skills for transformation programmes, legal advice, and specialised training that cannot be found within the permanent workforce.

Image: Editorial credit Alex Segre Shutterstock.com

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