Scotland's reignited defence spending row explained

The Fraser of Allander Institute, on the other hand, questioned the government’s presentation of the figures, particularly the minister's claim that devolved revenues have grown faster than devolved expenditure.

So what does it all mean? Here is Scotland's defence spending row explained.

Does Scotland's defence cost £5.1 bn or £2.1 bn?

The £2.1 bn figure

This is the amount the UK Ministry of Defence says was spent with Scottish industry (procurement contracts) in 2023-24. These are contracts with companies based in Scotland, building, supplying or servicing hardware etc. It includes the economic value of jobs supported at the Clyde shipyard or at Leonardo in Edinburgh where radar systems are built.

This number shows deeper, local economic impact rather than the full breadth of defence activity. However, it does not include the salaries of service personnel, the cost of maintaining Faslane or RAF Lossiemouth, or the wider resources devoted to operations and capabilities that are located elsewhere but still contribute to Scotland’s security.

The £5.1 bn figure

In GERS, this represents Scotland’s population-share allocation of reserved UK defence spend. It is not a sum that reflects only money physically spent in Scotland but spending which plays a direct role in defending Scotland.

This includes things like operations, research, the nuclear deterrent, infrastructure, personnel, and defence-related functions across the UK that serve Scotland’s security. For example, RAF aircraft based in England providing air policing for the North Sea approaches.

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Why are the numbers unclear?

The tension between the numbers arises because both sides of the debate tend to use whichever figure supports their political arguments.

Pro-independence or critics of unionist policy point to the £5.1bn figure as showing Scotland "earns" that much defence spending, arguing Scotland doesn’t see enough of it.

Scottish Finance Secretary Shona Robison has argued that reporting only procurement ignores much of the defence activity that benefits Scotland, and that the full GERS-allocated figure reflects services and security that cannot be neatly localised.

However, the former secretary of state for Scotland, Ian Murray and others have contended that presenting the £2.1bn figure (procurement only) as though it’s the full defence benefit is misleading, since many defence functions benefitting Scotland are UK-wide or based elsewhere but serve Scottish security. He has argued that defence is a UK-wide system that cannot be broken into neat local accounts.

Those pushing back say you can’t measure benefit purely by procurement – many defence assets (personnel, bases, operations) are shared UK-wide, and some contracts, support and infrastructure outside Scotland still contribute to Scotland’s defence.

Is there broader fiscal context?

In short: yes. The debate plays out against a difficult financial picture for Scotland.

Key findings from GERS 2024–25 include:

• Scotland’s net fiscal deficit widened by £5.1bn, hitting £26.5bn (11.7% of GDP).
• The UK’s overall deficit was much lower at 5.1% of GDP.

Revenue growth in Scotland has lagged behind spending, especially outside North Sea oil and gas.

Spending has risen sharply in areas such as health, welfare, and child payments.

The Scottish Government has told The Herald that an independent Scotland’s fiscal outlook would depend on economic growth, policy choices, and decisions about spending priorities, including defence.

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So, which figure is 'correct'?

Ultimately, it comes down to what you classify as defence spending and that can be complicated.

Ed Arnold, Senior Research Fellow of European Security at the Royal United Services Institute said: “It's a difficult figure to calculate. A lot of it is not even in the UK.

"A lot of the shipbuilding which is predominantly done in Scotland they’re part of consortia where quite a lot of the work is being done is actually done out in Spain and it varies on vessel type so it is a very difficult thing to sort out.” 

The defence analyst added: “The issue with the figures is also that it doesn’t express the value creation which Scotland plays an oversized element to that.” 

Both figures are correct in their own context — but neither tells the whole story alone.

The £5.1bn shows the scale of Scotland’s notional share of UK defence spending. This captures the full range of services Scotland receives as part of the UK’s defence system but does not translate into direct spending in Scotland.

The £2.1bn figure measures the tangible economic footprint in Scotland—jobs, contracts, and industry—but leaves out personnel, infrastructure, and UK-wide operations that also defend Scotland.

To get a fuller picture, the figure would need to include procurement, jobs, and industry in Scotland as well as taking into account the integrated nature of defence. The full cost of these values are woven into UK-wide totals and are not broken down in the GERS tables.

Scotland does not receive a flat-out cheque for £5.1bn but it also does not depend on security worth only £2.1bn of local procurement.

The reality lies somewhere in between. Defence is delivered as part of an integrated UK system, where assets, operations, and spending are spread across the country.

The dispute is less about which figure is “right” than about how defence is defined—and how each side of Scotland’s constitutional debate chooses to frame it.