Britain could fund a dramatic modernisation of its armed forces by reforming the welfare state and cutting waste on redundant equipment like tanks, Defence Editor Mark Nicol argued on the Deep Dive podcast. According to Nicol, a wholesale upgrade costing at least £28 billion is needed to invest in drones and artificial intelligence to counter the Russian threat, even as Labour's Defence Investment Plan remains nearly a year behind schedule.

Mark Nicol's £28 billion minimum and the welfare reform route

Nicol told the podcast that modernising Britain's military from the ground up would cost the Treasury £28 billion at an 'absolute minimum,' as reported in the source article. He expressed frustration that the government has not committed to higher defence spending now, linking the funding gap to the country's spiralling welfare bill. 'If there was a commitment to reform the welfare state, which continues to grow,then you could make a larger commitment on defence today,' Nicol said, directly tying military spending to domestic policy changes.

The source article notes that the Strategic Defence Review, published last year , called for a shift toward advanced capabilities like drones and AI, with the threat from Russia at the centre of future spending. Nicol argued that reforming welfare—a politically sensitive area—could release funds immediately, rather than waiting until the end of the current parliamentary cycle.

Rachel Reeves and the rumoured £13.5 billion markdown

According to the report, rumours persist that Chancellor Rachel Reeves has already negotiated the defence spending figure down from a possible £28 billion to closer to £13.5 billion. If accurate, that would represent a dramatic reduction—less than half of what Nicol describes as the minimum needed. The source article does not provide an official confirmation of these figures, leaving a key question open: how much is the Treasury actually willing to allocate,and will any amount be enough to meet the Strategic Defence Review's recommendations?

The near year-long delay in publishing Labour's Defence Investment Plan adds to the uncertainty. The plan is supposed to outline how the government will fund and deliver the reforms, but its absence, according to Nicol, pushes major investment to the 'very end of the Parliamentary cycle.'

Ajax: the £6 .3 billion symbol of allied redundancy

Nicol pointed to the Ajax armoured reconnaissance vehicle—a £6.3 billion programme that has faced years of delays and left soldiers reporting injuries as recently as last year—as an example of wasteful spending on equipment that NATO allies already possess in abundance. The source article quotes Nicol saying, 'We have so few tanks compared to the Poles, so adding more does not generate value for money or even combat effectiveness.' He arued that Britain should leave certain capabilities, like mass armoured vehicles,to other member states and instead focus on niche, high-tech assets.

This argument echoes a broader trend in European defence: NATO members are increasingly expected to specialise rather than duplicate capabilities. Poland alone fields thousands of armoured vehicles, making additional British tanks less strategically valuable than investing in drones, cyber warfare, or AI—areas where the UK could serve as a lead nation in the alliance.

What Labour's delayed plan still hasn't delivered

The source article leaves several open questions aside from the budget figure. First, whether Prime Minister Keir Starmer's government will embrace welfare reform as a funding mechanism remains politically uncertain; welfare spending is a core part of Labour's social contract. Second, the Strategic Defence Review's focus on Russia—with British intelligence warning of a possible attack on a NATO member by 2030—suggests urgency, yet the Defence Investment Plan is nowhere in sight. Third, the article relies heavily on Nicol's argument but does not include rebuttals from the Treasury or the Ministry of Defence, leaving the reader with only one side of the funding debate. Without official confirmation of either the £28 billion or £13.5 billion figure, the true cost—and the political will to pay it—remains unknown.