UK Budget 2026: Government confirms full funding for Defence Investment Plan and sets 2030 target for 3% defence spending

The Government has confirmed full funding for its Defence Investment Plan and set a target date of 2030 for defence spending to reach 3% of GDP.

The announcements, made in the Autumn Budget, came alongside new measures designed to unlock up to £5 billion of investment for UK defence businesses.

Chancellor John Healey unveiled the commitments in his Autumn Budget on 28 October – presenting defence as both a national security priority and a driver of industrial growth.

He told MPs: “In today’s budget, I ​am ‌fully funding the Defence Investment Plan, including through capital reprioritisation across Whitehall.”

The plan includes £15 billion of additional investment above previously agreed spending commitments, with £10.3 billion already identified through reallocations across government.

From Russian aggression and conflict in the Middle East to rapidly evolving technology, the threats we face are changing. We’re fully funding our Defence Investment Plan to strengthen the security of the UK and our allies. https://t.co/DHh65dABE8

— HM Treasury (@hmtreasury) October 28, 2026

Defence spending to reach 3% of GDP by 2030

A central announcement was the Government’s target to reach 3% of GDP on defence by 2030, with further details on the pathway to NATO’s 3.5% target due to be published at next year’s Spending Review.

Healey also linked the spending plans to the conflict in Ukraine and announced a further £10 billion package of economic and military support.

He told MPs that he and Prime Minister Andy Burnham had spoken to Ukrainian President Volodymyr Zelensky ahead of the Budget.

£5bn investment boost for defence industry

Alongside the spending commitments, the Chancellor announced a package of measures intended to strengthen the UK’s defence industrial base and attract additional private capital into the sector.

A new defence finance task force will begin work ahead of next year’s Spending Review, while the UK will enter treaty negotiations with Finland, Poland and the Netherlands on a new multilateral defence financing mechanism aimed at supporting defence investment and joint procurement.

The Government also plans to increase private sector participation in defence projects through new financing approaches and public-private partnerships.

For defence manufacturers, technology firms and SMEs, one of the most significant announcements was the decision to give the National Wealth Fund and British Business Bank a stronger focus on defence, dual-use technologies and sovereign capability.

Together, the two institutions will deploy up to £5 billion of investment and lending over the next four years.

Defence investment to support UK industry

Healey linked defence spending to economic growth and industrial development, arguing that increased military investment should create opportunities across the UK supply chain.

More to follow…