Our overview of the Ministry of Defence (MoD) examines its spending and performance. It brings together insights from our reports and other publicly available sources including the MoD’s annual report and accounts.

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Key takeaways

Objectives

Purpose: The Ministry of Defence (MoD) exists to protect the UK by ensuring its security and safeguarding its national interests and prosperity.

Strategic Defence Review (SDR) 2025: The SDR set out the government’s intended direction for Defence centred on ‘warfighting readiness’, NATO, resilience, innovation and growth (‘warfighting readiness’ refers to the armed forces’ ability to deploy, fight and sustain armed conflict at scale). The MoD is now implementing these ambitions through the Defence Investment Plan.

Defence Investment Plan (DIP): The DIP is a summary of the major investment choices the government has made for Defence for the next four years, with the aim of transforming the armed forces, strengthening the UK Defence industrial base and enhancing the UK and NATO’s response to the threat from Russia.

Financial management and reporting

Running costs (2025-26): Running costs were £59.2 billion, up from £52.8 billion in 2024-25.

Comptroller and Auditor General’s (C&AG’s) audit opinion: The MoD published its Annual Report and Accounts 2025-26 before Parliament’s summer recess, and the C&AG’s audit opinions were unqualified.

Spending Review settlement: Including the additional funding provided in the DIP, spending is projected to increase by 18% in real terms between 2025-26 and 2029-30.

Major projects

Government Major Projects Portfolio (GMPP): In March 2026, of the 20 MoD projects that remained in the GMPP following the National Infrastructure and Service Transformation Authority’s (NISTA’s) April 2026 reforms, eight were rated ‘red’, 10 ‘amber’ and two were exempt from public reporting.

Productivity

Defence Reform: The Defence Reform programme moved from organisational design to live operation on 1 April 2026.

Efficiency savings target: The MoD plans to make £10.7 billion of efficiency savings between 2026-27 and 2029-30.

Resilience

Internal controls: The Government Internal Audit Agency (GIAA) concluded that the effectiveness of the MoD’s governance framework, risk management and controls during 2025-26 was ‘limited’.

Principal risks: The MoD added ‘warfighting’ as a new principal risk in 2025-26.

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