Our #ICAEW #chartoftheweek is about defence this week – the subject of our second chapter in this year’s #IFSGreenBudget. This examines how the evolving defence and security position might affect defence resources and spending, and the pressure this could put on the public finances.
Our chart reflects the ‘peace dividend’ following the end of the Cold War, with the UK’s regular forces falling by more than half from 320,700 in 1980 to 146,560 in 2018.
The savings were used to fund a growing welfare state – with defence falling from 15% to 5% of total public spending over the last fifty years just as health and welfare spending has increased from around 25% to over half. Defence and security spending now stands at 2.1% of GDP.
This long-term decline will have to end if the UK is to meet its commitment as a member of NATO to spend at least 2% of GDP on defence and security. Indeed, changing perceptions of potential threats may lead to defence spending starting to increase. To read all about defence – and public sector assets (our first chapter), go to www.icaew.com/technical/economy/ifs-green-budget-2018. See the launch presentation online, read the full report or find out more at our follow up webinar on 25 October at 1pm – to register go to events.icaew.com/pd/11508.