Financial cost of war

This page contains information about the financial cost of the war with Iraq in the UK and the US.

The Iraq Analysis Group carries out ongoing monitoring of UK war spending and has produced a series of briefings and press releases.

  • United Kingdom
    • IAG Briefing: 'The Rising Costs of the Iraq War' (22 March 2006)

      Briefing by the Iraq Analysis Group detailing UK military spending in Iraq

    • Parliamentary discussion of Spring Supplementary Estimates (20 March 2006)
    • Costs of Peacekeeping in Iraq and Afghanistan: Spring Supplementary Estimate (14 March 2006)

      Report produced by the House of Commons Defence Select Committee. Includes a breakdown of estimated costs in Iraq for 2005-06 provided by the MoD (Table 2, page 6).

      The committee expresses discontent with the size of the 'contingency' allowed, stating "Including £146 million contingency in the request for resources, without full supporting detail, is asking Parliament to take too much on trust.". It is also concerned about the lack of detail in the end of year accounts of the MoD.

      On the topic of giving better estimates to parliament, it states "The fact that MoD cannot provide information that is accurate to the standards which it would normally place before Parliament is no reason for not providing Parliament with any information at all." It notes that the MoD sees the treasury as the body to agree costs with, and sees parliament as a rubber stamp.

    • 'The Economics of the UK-Iraq Conflict' (2006)

      By Professor Keith Hartley, Director of the Centre for Defence Economics at the University of York.

    • The Costs of the Iraq Conflict: Briefing Note for Channel 4 TV (11 June 2004)

      By Professor Keith Hartley, Director of the Centre for Defence Economics at the University of York.

    • HM Treasury
      • Budget 2006: Chapter 6 (22 March 2006)

        Budget 2006 announces £800 million of provision for the Special Reserve in 2006-07, set aside from within existing public spending plans, to help meet the costs of Iraq, Afghanistan and other international commitments and further allocates £200 million from the Reserves in 2006-07 to support ongoing peacekeeping activity across the world through the Global Conflict Prevention Pool.

      • Budget 2005 (March 2005)

        Includes links to previous budgets.

        Chapter 6: "In the 2004 Pre-Budget Report, the Government continued to make prudent provision for the costs of the military conflict in Iraq and its other international obligations, adding £520 million to the special reserve for 2004-05. In this Budget, the Government provides a further £340 million for the special reserve in 2004-05 and £400 million for the special reserve in 2005-06. Costs and provision will be reviewed again in time for the 2005 Pre-Budget Report."

      • Pre-Budget Report 2004 (02 Dec 2004)

        'Yesterday I announced £520 million for the Special Reserve for Iraq and our international obligations. And I thank our armed forces for their dedication and courage.

        Having since September 11th doubled the budget to 2008 for security at home, I am releasing a further £105 million for necessary security measures to counter terrorism, enhance surveillance at ports and improve civil resilience. '

      • Spending Review 2004 (July 2004)

        Military expenditure will rise to £33.447bn in 2007-8. When Labour came to power in 1997 it was £20.945bn

      • Budget summary 2004 (March 2004)

        Predicted defence spending for 2004-5 was £27bn out of a total public spending of £488bn. This is the same as 2003-4.

        In 2001-2 and 2002-3 it was £24bn.

      • Pre-Budget Report 2003 (10 Dec 2003)

        'To date the money spent or set aside for the war against terror including in Afghanistan and for our action in Iraq is £5.5 billion. I can tell the house that for Iraq £2 billion has been carried forward into the Special Reserve for 2003-4. And I believe it prudent and right today to set aside a further £500 million for this year, and an extra £300 million for next year: raising our allocations for the war against terrorism and for action in Iraq to £6.3 billion.'

      • Budget 2003 (March 2003)

        6.6 The 2002 Pre-Budget Report confirmed the Government's plans for public spending in 2002-03. The Pre-Budget Report also made a special contingency allocation of £1 billion to ensure that resources were available for the UK's international defence and security needs. These resources allowed the UK's armed forces to prepare, on a contingency basis, for the event that the Iraqi regime failed to comply with the conditions set down in United Nations (UN) Security Council resolution 1441.

        6.7 The failure of the Iraqi regime to comply with the will of the international community as expressed in resolution 1441 led to the commencement in March of coalition military action to enforce these conditions. The Government has therefore increased its contingency provision to £3 billion to ensure that resources are available to cover the full cost of the UK's military obligations.

      • Public spending and services index
      • Statistics on Public Finance and Spending
    • Ministry of Defence
    • News Articles
    • Office of National Statistics
    • Parliamentary questions

      Links to the Hansard records of questions asked in the UK parliament about the financial costs of the Iraq war. Online resource www.theyworkforyou.com was very useful in putting together this list. It puts the UK Parliamentary record, Hansard, into a searchable format.

      • Question from Bob Spink (18 Jan 2007)

        Defence Expenditure: Iraq

        Adam Ingram replies: The costs of operations are calculated on a net additional basis and audited figures are published each year in the MOD's annual report and accounts. The total of the annual audited figures for the costs of operations in Iraq for the years 2002-03 to 2005-06 was £4,026 million. An estimated cost of £860 million for 2006-07 was included in the winter supplementary estimates published in November which is available in the Library of the House. Final figures will be published in the MOD's annual report and accounts for 2006-07.

      • Question from Vince Cable (30 March 2006)

        Adam Ingram replies: The cost of replacing military equipment damaged and destroyed in Iraq is estimated at around £100 million, including £40 million for aircraft and £28 million for helicopters. We do not currently plan to replace any tanks or armoured vehicles as we assess their fleet sizes are sufficient to meet planned out of service dates. These figures are included in annual estimates of the net additional cost of the operation as they are incurred.

      • Question from Vincent Cable (06 March 2006)

        Latest breakdown of MoD costs in Iraq:

        (numbers in £ million)

        2002–03 Operations in Iraq 629 Expenditure on Capital Equipment 218 Total 847

        2003–04 Operations in Iraq 1,051 Expenditure on Capital Equipment 260 Total 1,311

        2004–05 Operations in Iraq 747 Expenditure on Capital Equipment 163 Total 910

        Total £3,068million

        The estimated cost of £1,098 million for operations in Iraq for 2005–06 were included in the Spring Supplementary Estimates published in February

      • Question from Rob Wilson (02 March 2006)

        Cost of sending DfID staff and external consultants to Iraq:

        Mr. Rob Wilson:

        "To ask the Secretary of State for International Development what the cost to his Department was of (a) preparing and (b) deploying contracted (i) civil service and (ii) non-civil service (A) UK and (B) non-UK civilian personnel to Iraq between April 2003 and December 2005; and what the salary costs of these staff were in this period. [54296]"

        Hilary Benn:

        "Between April 2003 and December 2005, DFID spent £210,000 preparing DFID civil servants and consultants for deployment to Iraq. This covers pre-deployment hostile environment training, plus necessary equipment such as satellite phones, body armour, flak jackets and helmets. Our records do not disaggregate this figure between our own staff and project consultants or between UK and non UK personnel.

        DFID civil servants working on the Iraq programme in this period have cost £4.4 million. This includes salaries, overseas allowances, transfer costs and travel. Of this amount, £3 million was disbursed on salaries. Again, our records do not disaggregate these costs between those staff working in London and those working in Iraq, or between UK and non UK personnel.

        Most non-civil service personnel deployed to Iraq are engaged not individually, but through bigger contracts to implement projects. The total cost to DFID of all consultancy contracts in Iraq during this period was £31.4 million. Our records do not disaggregate this figure between fees, reimbursables and programme costs, or between preparation and deployment costs. Consultants receive fees rather than salaries, so it may be helpful to know that the average fees paid for a consultant working for DFID in Iraq are between £700 to £1,250 a day.

        In addition to the above costs, DFID also meets essential life support costs for all DFID staff and consultants who work in or visit Iraq. This includes security, transport, medical services, food and accommodation; we expect to disburse £55 million on this life-support between April 2003 and the end of the current financial year, ending 31 March 2006. This support is necessary and integral to the effective delivery of the humanitarian and reconstruction programmes that we run. "

      • Questions from Rob Wilson (27 Feb 2006)

        Cost of FCO security contracts and setup costs.

        Mr. Rob Wilson:

        "To ask the Secretary of State for Foreign and Commonwealth Affairs what the cost was of private security companies contracted to his Department and operating in Iraq, between April 2003 and December 2005. [54290]"

        Dr. Howells:

        "The total contractual costs of private security companies contracted to the Foreign and Commonwealth Office and operating in Iraq, between April 2003 and December 2005, was £110,342,718.

        Mr. Rob Wilson:

        "To ask the Secretary of State for Foreign and Commonwealth Affairs what the cost was of (a) securing and (b) setting up the British Embassy buildings and compounds in (i) Baghdad and (ii) Basrah following the handover of sovereignty to the Iraqis; and what the cost was of securing the office for the UK representation in Kirkuk. [54294]"

        Mr. Straw:

        "Work to create our present Embassy and Consulate-General facilities in Baghdad and Basra respectively began under the Coalition Provisional Authority and is now nearing completion at an estimated total capital cost of £55 million, of which approximately 20 per cent. can be attributed to the capital costs of security works and installations. In Kirkuk the UK representative is located on the US compound, where office accommodation is provided at no capital cost. "

      • DFID Spending In Iraq (13 July 2005)

        DFID total monthly cost to the UK of civil operations in Iraq since March 2003.

      • Question From Mike Hancock (04 July 2005)
      • Question From Vincent Cable (21 June 2005)
      • Question from Keith Simpson (Mid Norfolk, Con) (22 March 2005)
      • Question from Keith Simpson (Mid Norfolk, Con) (22 March 2005)
      • Question from Mr Mudie (21 March 2005)
      • Question from Tam Dalyell (Linlithgow, Lab) (21 March 2005)
      • Question from Defence Select Committee (16 March 2005)
      • Question from Derek Conway (26 Jan 2005)
      • Question from Frank Dobson (13 Jan 2005)
      • Questions from Dr. Cable and Harry Cohen (17 Nov 2004)
      • Question from Sir Menzies Campbell (15 Nov 2004)
      • Question from Lord Lester of Herne Hill (25 Oct 2004)
      • Question from Mr. Hancock (04 Oct 2004)
      • Question from Mr. Pike (07 July 2004)
      • Question from Jeremy Corbyn (21 Apr 2004)
      • Questions from Dr. Cable and Tam Dalyell (01 Apr 2004)
      • Treasury committee (24 March 2004)
      • Questions from Mr. Swayne and Mr. Evans (04 March 2004)
      • Question from Mr. Cummings (22 Jan 2004)
      • Question from Jeremy Corbyn (20 Jan 2004)
      • Question from Harry Cohen (03 Dec 2003)
      • Question from Mr. Letwin (20 Nov 2003)
      • Question from Mr. Jenkin (18 Nov 2003)
      • Question from Tam Dalyell (Linlithgow, Lab) (03 Nov 2003)
      • The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw) (30 Oct 2003)
      • Question from Mr. Keetch (23 Oct 2003)
      • Question from Mr. Chris Smith (20 Oct 2003)
      • Question from Mr. Douglas Hogg (Sleaford and North Hykeham) (14 Oct 2003)
      • Question from Mr. Flook (14 Oct 2003)
      • Question from Matthew Taylor (18 Sept 2003)
      • Question from Mr. Keetch (19 May 2003)
      • Question from Mr. Stephen O'Brien (02 Apr 2003)
      • Question from Dr. Jenny Tonge (10 Feb 2003)
  • United States
    • CRS report on cost of war, prepared for US Congress (Oct 2005)

      This report published by the Congressional Research Service (CRS) concluded that $251 billion had been assigned to spending on the Iraq War. The research uses Congressional appropriations and Department of Defense (DOD) DFAS monthly obligations reports. The report claims that due to the anticipated nature of the war, the DOD transferred money from peacetime funds and also from funds appropriated for Afghanistan or general war. Transferral of monies from peacetime funds is permitted under certain circumstances as outlined in appropriations legislation.

      [As of Oct 2005] The US's National Priorities Project "Cost of War" information and counter is now based upon this latest estimate of congressional appropriations totalling $251billion by 31 March 2006.

    • costofwar.com

      A running total of what US taxpayers are spending on the Iraq War.

    • War In Iraq versus Containment (15 Feb 2006)

      Paper by Steven Davis, Kevin Murphy, and Robert Topel. Analyses the cost of the Iraq war compared to an alternative scenario of 'containment'. They estimate the cost of the war (as seen at a pre-invasion point) to be between $100 - $870 billion, whilst the cost of containment (which implies a large US militrary presence existing in the area at a cost of $14.5bn per year) at $300bn. However, they add $50-$400 billion extra to cope for some 'contingencies'.

      They also analyse which option would be best for the Iraqi population. However, as the previous set of estimates, such an analysis is unhelpful, since they themselves define the outline of the alternative scenario - assuming the continuation of sanctions, a small chance of a substantive regime change (3% each year), a lack of need to station ground forces in the Middle East, etc. Whilst such judgements may not be wrong, it makes the piece largely irrelevent for policy discussion.

    • The Economic Costs of the Iraq War (Jan 2006)

      Economics Professor Joeseph Stiglitz and budgetry expert Linda Bilmes analyse the cost of the Iraq War. They estimate the pojected total direct costs to the US government at being $700bn in a conservative scenario, and $1trillion in a moderate one. They then estimate that additional macroeconomic factors will add another $100-$200bn.

    • The Economic Costs of the War in Iraq (Katrina Kosec and Scott Wallsten) (Sept 2005)

      ~30-page working paper published by the American Enterprise Institute and the Brookings Institution (AIE-Brookings Joint Centre). Analsyses and attempts to monetise the direct and avoided costs of war in Iraq.

    • The Economic Costs of the War in Iraq (Katrina Kosec and Scott Wallsten) (Sept 2005)

      ~30-page working paper published by the American Enterprise Institute and the Brookings Institution (AIE-Brookings Joint Centre). Analsyses and attempts to monetise the direct and avoided costs of war in Iraq.

    • BBC News: 'Bush seeks extra $82bn for wars' (15 Feb 2005)
    • Cost Analyses of Operations in Iraq and Afghanistan

      "CBO's studies of the long-term implications of current defense plans also contain estimates of the costs of military operations and other activities associated with the global war on terrorism, as do alternative budget scenarios in Chapter 1 of CBO's The Budget and Economic Outlook: Fiscal Years 2007 to 2016."