UK and Italian Responses to NATO's Defence Spending Imperative
In a landscape shaped by persistent threats from Russia's aggression in Ukraine and escalating frictions across the Mediterranean and beyond, NATO's allies confront an urgent call to reinforce their collective defences. The June 2025 summit in The Hague crystallised this resolve, with members vowing to reach 5 per cent of GDP in security spending by 2035 - split into 3.5 per cent for core defence and 1.5 per cent for resilience measures. The United Kingdom and Italy have embraced these goals, though their strategies differ markedly in ambition, execution, and fiscal creativity. This analysis contrasts their approaches, scrutinises spending priorities and resultant capabilities, and considers the lessons Italy holds for the UK, particularly in extracting superior value from each euro or pound invested.
The UK's commitment reflects a steady escalation under Prime Minister Keir Starmer's administration. In February 2025, the government pledged to elevate defence outlays to 2.5 per cent of GDP by 2027, surpassing the alliance's prior 2 per cent threshold. This followed 2024's allocation of £66 billion at 2.3 per cent of GDP, which already outstripped most peers. The Hague summit amplified this trajectory: a firm undertaking for 5 per cent overall by 2035, with 3.5 per cent dedicated to defence essentials. For 2025, projections hold at 2.4 per cent, or about £70 billion, with incremental rises to align with the long-term aim.
Funds flow primarily via the Ministry of Defence, prioritising capital over human resources. By 2028-29, procurement will absorb 43 per cent of the budget - rising from 35 per cent in 2023-24 - while personnel costs fall to 29 per cent through efficiencies. Nuclear safeguarding claims roughly 0.3 per cent of GDP yearly, centring on Trident's overhaul. The September 2025 Defence Industrial Strategy injects £2.5 billion annually into small and medium enterprises to spur innovation and halve average procurement lags of 20 months. Initiatives like a "back British" policy compel contractors to recycle investments into domestic employment, alongside expedited buys for items such as enhanced artillery.
These investments translate into robust enhancements. The 2025 Strategic Defence Review emphasises allied synergy, bankrolling shared acquisitions of advanced fighters and submarines. Standouts include extra Challenger 3 main battle tanks and Boxer vehicles to strengthen ground units, plus the belated but hastening Ajax scout platforms. Maritime strength grows through £10 billion in Type 26 frigate exports to Norway, strengthening UK yards, while £4 billion in Sky Sabre sales to Poland bolsters missile defences. Cyber and unmanned systems garner £1 billion, targeting AI-driven drone fleets by 2030. Collectively, these bolster the UK's expeditionary posture, with the Royal Navy's carrier groups and the RAF's Tempest sixth-generation jet affirming its worldwide reach.
Italy's path, under Prime Minister Giorgia Meloni, embodies pragmatic acceleration amid fiscal constraints. From 1.54 per cent of GDP in 2024 (€29.18 billion), Rome surged to €31.3 billion in 2025 - a 7.2 per cent uplift - hitting the 2 per cent mark via reclassifications like pensions and Carabinieri contributions, totalling €45.3 billion. The Hague pledge commits Italy to the full 5 per cent by 2035, though rollout will be measured, with ambitions to double spending to 3 per cent over four years. Budgets stabilise at €31.2 billion for 2026-27, but a €35 billion procurement envelope spans 15 years, leveraging EU loans and collaborative ventures.
Allocations balance sustainment with modernisation. Personnel and operations hold steady, but procurement claims the lion's share, streamlined by the 2025-27 Defence Planning Document for swift execution. A €100 million special fund upgrades legacy systems, while EU mechanisms unlock further borrowing for hardware. Manpower shortages - around 15,000 troops - are tackled via incentives, and logistics stockpiles, at 60 per cent readiness, receive targeted infusions.
Procurements underscore a Mediterranean focus. Airpower leads with €735 million to grow the F-35 fleet from 90 to 115 jets, enhancing stealth and strike options. €625 million advances the Global Combat Air Programme (GCAP) with the UK and Japan for next-generation fighters. Land capabilities advance via €100 million for Ariete tank modernisations, €50 million for Rheinmetall's Panther main battle tanks, and €130 million for Lynx infantry fighting vehicles. Maritime domain sees €30 million initial outlay for six Kawasaki P-1 patrol aircraft in 2027, bolstering anti-submarine warfare against regional threats. Drones and multi-mission aircraft feature in the planning document, with € billions for unmanned systems and cyber defences. By 2030, these yield eight NATO-compatible brigades and a revamped navy, pivoting Italy from underfunded outpost to alliance linchpin.
| Aspect | United Kingdom (2025–2035) | Italy (2025–2035) |
|---|---|---|
| GDP Target | 2.5% by 2027; 3.5% core by 2035 | 2% in 2025; 3% by 2029, 5% by 2035 |
| Annual Budget (2025/26) | ~£70bn (2.4% GDP) | €31.3bn ordinary (€45.3bn total, 2% GDP) |
| Key Spending Focus | Equipment (43% by 2028); nuclear | Procurement (€35bn/15yrs); air/land modernisation |
| Major Capabilities | Type 26 frigates, Challenger 3, Tempest | F-35 expansion, Lynx IFVs, P-1 MPA |
| Funding Mechanism | Tax adjustments; industrial offsets | EU loans; reclassifications; joint programs |
The UK maintains a GDP-share lead but faces absolute spending pressure from its £2.5 trillion economy, versus Italy's €2.1 trillion base. London's nuclear commitments - 36 per cent of platforms - contrasts Rome's solely conventional forces, with Italy's 140 per cent debt-to-GDP ratio offset by EU fiscal flexibilities absent in post-Brexit Britain. Shared issues include inflation-hit overruns, but the UK's ballooning welfare bill continues to draw in ever larger funds away from defence.
Italy can teach valuable lessons to the UK. Foremost is procurement: Rome's planning document cuts approval times via EU-aligned thresholds, a blueprint for Whitehall to curb delays. Second, fiscal ingenuity: Reclassifying expenditures and tapping €150 billion in EU defence bonds shields budgets from domestic politics - emulating this could insulate UK's Strategic Defence Review. Third, manpower: Italy's blend of bonuses and civic campaigns fills gaps; the UK might weave defence into debates around recruitment and retention. Lastly, partnerships: GCAP's cost-sharing with Tokyo and London accelerates tech; expanding such partnerships could facilitate shared development costs.
Italy's edge in value for money stems from structural advantages. Its robust domestic defence sector - Leonardo for avionics, Fincantieri for vessels - retains 70 per cent of spending at home, versus the UK's 55 per cent amid import reliance. Collaborative bids like GCAP slash unit costs by 20-30 per cent through pooled R&D, while EU loans at low rates (1-2 per cent) finance buys without tax hikes. With absent nuclear commitments, Italy channels 40 per cent to kit versus the UK's 30 per cent post-personnel. Procurement efficiency: Average timelines hover at 12 months, half the UK's, via streamlined bureaucracy. Exports - €15 billion yearly - recoup investments, creating a virtuous cycle. For €31 billion, Italy procures 25 F-35s and 100 Lynx vehicles; the UK, for £70 billion, adds 50 tanks and 10 frigates but grapples with overruns inflating costs 15 per cent.
By adopting Rome's efficiencies, London could amplify its "bangs for bucks" from its defence budget.