UK Treasury plans to take control of GCAP spending amid defence funding overhaul

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UK Treasury GCAP spending control

Highlights

UK Treasury plans to assume control of GCAP fighter jet spending as part of a wider defence funding overhaul nearing final negotiation.
Defence Investment Plan expected to inject about £15bn up to 2030, with up to £6bn allocated for GCAP, but a £28bn gap may force military cuts.
Rising GCAP costs, delivery timeline risks, and an expiring interim deal by June end fuel uncertainty, prompting intensified discussions with Japan and Italy.

Defence funding plan nears decision

As reported by the Financial Times, the Treasury is preparing to take control from the Ministry of Defence over spending on the multibillion-pound fighter jet programme as negotiations over the Defence Investment Plan reach their final stage. The move is intended to avoid a repeat of cost overruns on major military projects and is tied to a broader settlement on future defence spending.

Prime Minister Keir Starmer is expected to announce an injection of about £15bn for Britain’s military up to 2030, according to people familiar with the matter. That figure is described as a compromise between the £12bn sought by Chancellor Rachel Reeves and the £18bn that Defence Secretary John Healey and military chiefs argued was the minimum acceptable level.

The settlement is expected to include up to £6bn in extra funding for the Global Combat Air Programme, the sixth-generation stealth fighter being developed by the UK with Japan and Italy. The proposed Treasury role would give it greater oversight of the programme, although officials acknowledge that the international structure and existing external contracts could limit how far spending can be tightened.

The arrangement is not yet finalised, and officials say there is a push to announce the Defence Investment Plan as soon as next week, with June 11 discussed as a target date. If the extra defence spending is confirmed at roughly £15bn, significant cuts to other planned military programmes are still likely because the wider funding gap is put at £28bn over the next four years.

GCAP timeline and industry pressure

British officials believe projected costs for GCAP have risen sharply, and some think delivery could slip beyond the timetable set when the three partner countries launched the joint fighter plan in December 2022. Under the current plan, London, Tokyo and Rome have pledged to have the aircraft in service by 2035, while industry executives maintain that the programme remains on track.

One option under discussion is to classify GCAP as one of the government’s mega projects, placing it under cross-government oversight alongside programmes such as HS2 and Dreadnought. Under that approach, the National Infrastructure and Service Transformation Authority, which sits within the Treasury and Cabinet Office, would provide enhanced support.

A decision on long-term funding is becoming urgent because an interim deal expires at the end of June. Uncertainty over London’s ability to commit substantial sums is causing concern in Japan, where Prime Minister Sanae Takaichi is due to visit the UK next week and is expected to make GCAP a priority in talks with Starmer.

The three countries signed a treaty in December 2023 committing to the programme, which is managed by a separate entity working with Edgewing, the industrial joint venture involving BAE Systems, Leonardo and Mitsubishi Heavy Industries-backed Japan Aircraft Industrial Enhancement. Delays to the Defence Investment Plan are also increasing frustration among allies and defence companies, with ADS chief executive Kevin Craven saying the armed forces, allies and industry are all waiting for greater certainty. The government says Britain remains committed to GCAP and is focused on working closely with Italy and Japan on the next steps toward a full international contract.

Our earlier article covered draft U.S. Office of Management and Budget rules that would tighten political oversight of federal research grants and reduce the role of independent peer review. It explained that the proposed framework could restrict funding for certain topics and activities, raising concerns among universities and researchers about the long-term impact on scientific quality and the U.S. research system.

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