// BBC BUSINESS NEWS — FINANZA
Healey tells departments to make 1% cuts to fund defence
Members of the Finnish army and British army on a training exercise on Nato's border with Russia
Chancellor John Healey has told every government department to find 1% cuts in their capital budgets to fill a £4.7bn hole in the funding of the Defence Investment Plan.
The reductions come on top of the 1% cuts departments were asked to make earlier this year in order to pay for the initial £10.3bn of the plan's overall £15bn price tag.
The plan boosted defence spending; however the chancellor continues to come under pressure to explain how he will meet a further target of spending 3% of national income on defence by 2030.
Conservative leader Kemi Badenoch accused the chancellor of only offering "a plan to have a plan" adding: "I bet [Vladimir] Putin's really scared now."
Setting out his Budget, Healey hinted that meeting that goal would require further cuts, telling MPs it would involve "looking hard at public spending".
He said he would set out how the UK would reach the 3% target by 2030, as well as 3.5% of GDP by 2035, at next year's spending review.
Government departments have yet to decide what will be cut from their capital budgets.
Capital budgets are focused on long-term investments, rather than day-to-day spending. For example, earlier this year, when departments had to make capital budget cuts to fund the initial defence spending rise, a number of major road improvement schemes were scrapped.
Badenoch criticised Healey for not using his Budget to explain how he would boost defence funding to 3%.