“The Answer is No”: Knighton Admits SDR and Current Programmes Don’t Mix

The Chief of the Defence Staff (CDS) for the British Ministry of Defence, Air Chief Marshal Sir Richard Knighton has told the House of Commons Defence Select Committee that the country’s planned modernisation of its armed forces is unaffordable under the current budget. 

Speaking to the Committee on January 12, Sir Knighton said, “I think your question is that if we wanted to do everything that is currently in the programme and do all the extra things in the SDR [Strategic Defence Review], could we do that with the budget that we have got? And the answer is no,” in response to a question from Mr Derek Twigg, a Labour Party MP. 

The exchange continued: 

Derek Twigg: “So we are talking about cuts to programmes.”

Sir Richard Knighton: “What you have to do is make judgments about what you prioritise: how big the contingencies are going to be—”

Derek Twigg: “Are we talking about reducing programmes, changing programmes or taking programmes backwards?”

Sir Richard Knighton: All of those things are options under consideration. But so is the level of ambition that we might take. These are just straightforward–” 

The session ranged back and forth between procurement, reserves and readiness, but the CDS’s comments highlight a growing pain point for the British armed forces. They are facing a number of capability gaps in both legacy platforms, like medium lift helicopters, howitzers, and reconnaissance vehicles, as well as more modern equipment like drones and loitering munitions. 

Years of deferred spending, which is where allocating money to a budget within one year is deferred to the next, have hollowed out some of the MoD’s platform programmes and increased their costs. Sir Knighton observed that maintaining this strategy might be one route to resolving the delta between what is planned, and what funding is available.

“We have to make a judgment around the right balance between investing in the transformation that is called out in the SDR, investing in filling in some of the hollows that the SDR referred to, and how quickly we are able to address those challenges and transform. All of that, taken together, is a complex set of circumstances. The judgments you make will determine how much money you need or what you can do inside the cost envelope. It is hard. It is a difficult set of problems,” Sir Knighton said during the session.

The SDR: A lot of up arrows, no downs

Walking around trade shows and conferences in 2024 and 2025, I would ask attendees how things were going. The conversation would usually go something like this: 

“Hey Mr Smith, how’s it going? I haven’t seen you since the last DVD!” 

“Oh it’s going well, you know, just waiting for the Strategic Defence Review.” 

For months, the British defence ecosystem from the MoD, to the defence industry, and various defence journalists, waited for the Strategic Defence Review (SDR). We waited because the MoD could not make any big decisions without it. And there were a lot of big decisions to be made. 

It’s always the way in the UK. And as we all waited in the pre-SDR limbo, the MoD started to hold back on making any big public statements. Finally, it was published in June 2025 and set forth ambitious recommendations that were deemed necessary to keep, or make, the UK a credible force. However, this SDR, unlike previous iterations, was an external document. Which means it was not prepared by the government and its authors were not expected to provide cost estimates for their recommendations. The British Government also did not have to accept its findings, but the Labour Government did. All 62 of them. Including, but not limited to: 

• 12 new F-35As 
• Up to 12 SSN-AUKUS nuclear submarines 
• Six munitions factories 
• £6 billion in munitions procurement
• Up to 7,000 long-range missiles 
• And £1 billion for homeland air defence. 

There was one problem: There was no money. Running a quick estimate on the above, which are just some of the recommendations, it would cost around £28.5 billion ($38.97 billion/€32.84 billion) to resource just these six recommendations. And that is with an extremely generous estimated price of £1 billion per SSN-AUKUS. It is very likely to be much higher. To give some perspective, that represents a greater financial commitment than Italy’s entire defence budget for 2026, which is expected to include a significant uplift for GCAP. It is significantly larger – by billions of pounds – than the entire budget of the Netherlands (€26.8 bln). It would take many of the smaller EU states to combine their entire defence budgets just to resource this planned expenditure. It is a phenomenal cost, and there was no indication of the trade-offs that would have to be involved. 

• SDR: UK to build six new munitions factories – Calibre Defence 
• SDR: F-35As and tactical nukes for the RAF? – Calibre Defence 
• SDR: UK sets goal of 12 SSN-AUKUS boats from late 2030s – Calibre Defence 

According to Sir Knighton, this is precisely the work that is now under way. Ministers and the MoD have to find a way to afford the plans set out in the SDR and what should be prioritised or de-prioritised. 

“The SDR…did lay out priorities for improvement and modernisation, and for filling in hollowness that it reflected on, [but] it did not give us specific areas in which we should disinvest or seek to slow down investment. That is the work that we have to do through the defence investment plan,” Sir Knighton explained. 

However, the National Audit Office’s report in 2024, which examined the MoD’s equipment plan noted that: “there is a £16.9 billion deficit between the MoD’s capability requirements and its budget, despite the MoD having increased the Plan’s budget by £46.3 billion. This is the largest funding deficit in any of the 12 Plans the MoD has published since 2012. It is also a marked deterioration in the reported financial position since last year’s Plan, which the MoD judged to be affordable but this Committee concluded was not and that is characterised by optimism bias. The real deficit, however, is even larger, because some parts of the Armed Forces have not included costs for all the capabilities government expects the MoD to provide, but only those they can afford. The Army, for example, could need around £12 billion more to fund all the capabilities the government seeks.”

Waiting for the DIP

The UK’s defence ecosystem had another problem, and that became clear at later conferences. At DSEI, the conversations would go like this: 

“Oh Mr Smith, good to see you again. How’s project X going? 

“It’s ok, waiting for the DIP.” 

No, the DIP isn’t a delicious snack brought out at defence shows, it stands for the Defence Investment Plan. The SDR had set the direction, but had not outlined any priorities or trade-offs. The DIP was needed to state where the Labour Government would be spending its money, and where it would not. Because the SDR was not an internal document, and because the government had accepted all of its recommendations without a detailed costing plan, that is the work that now has to be done. Given that there was already a budget shortfall, according to the National Audit Office, and that the SDR added the potential for £28.5 billion in additional procurement, one can imagine that the process of creating the DIP is far from straightforward. 

• The Dreadnought Class, the nuclear successor – Calibre Defence 
• No Spear 3 for British F-35B before 2030 – Calibre Defence 
• British Defence and the Pink Mountain 

This fact was acknowledged by Admiral Sir Tony Radakin in a September 2025 speech at the Institute for Government, “The 2020s will continue to be tough,” he told the audience, as he handed over the CDS role to Sir Knighton. “The SDR predominantly had up arrows and increased demands, and very little in the way of down arrows. That means difficult decisions, including potentially further cuts, are likely to be required in the short term.” Sir Knighton worked to avoid stating things so clearly, but recently retired senior officers often feel they can be more candid in what they say. 

And so, we have continued…waiting. Every so often a rumour will circulate; “I heard the DIP was sent to Number 10, but sent back.” Others returned from MoD meetings dejected, “there’s no money, we’re waiting for the DIP like you,” they had been told. This claim would get refuted on the grounds that the UK is so wealthy it would be impossible for there to be no money. Then Sir Rich Knighton gave evidence to the Defence Select Committee as detailed above. 

Nothing has changed by the evidence given to the Defence Select Committee, and like the SDR, the British Government doesn’t have to do what the Committee says. But the admission that there are difficult times ahead is an important one. If and when the DIP eventually emerges it will have to account for the growing delta in the MoD’s finances, either forcing the Chancellor to borrow more money – a lot of money – to cover the commitments, or there will be some immense trade-offs. 

Calibre comment: Don’t say cuts.

The DIP is now supposedly due in March, 2026. It will hopefully finally reveal what trade-offs are to be made. It is of course difficult and somewhat futile to predict what the compromises will be. But, from a purely objective perspective, it is reasonable to argue that the UK’s nuclear deterrent, anti-submarine warfare, and offensive counter-air capabilities are the most important when it comes to deterring Russia. Whilst the British Army is a core part of NATO’s forward presence, its size and equipment largely pales in significance when compared to the collective procurements of the Nordics – which functionally operate as one area in their defence – Germany, and Poland. It follows that the DIP could focus its immediate funding on the Royal Navy and Air Force, but there are several key capability gaps in the British Army, that would leave it dangerously exposed. By Sam Cranny-Evans, published on January 26, 2026. The lead image shows the Prince of Wales aircraft carrier during Operation Highmast in 2025. Credit: LPhot Helayna Birkett/UK MOD © Crown copyright 2026.