The annual Common Funding Resource Plan (CFRP) consolidates into a single five‑year overarching and comprehensive plan for Council’s consideration and discussion, both the Medium Term Resource Plan (for the Military Budget and the NATO Security Investment Programme (NSIP)) and the Medium Term Financial Plan (for the Civil Budget).
Aim
The purpose of the CFRP is to provide an overview of the common-funded resource demands over the next five years, and to assess the medium term feasibility and affordability of previously endorsed and future common funded programmes and requirements, including personnel. It recommends for Council approval the ceilings for the next year and seeks Council notation of the planning figures for the four outer years (from 2025 to 2028) and the indicative figures for 2029 and 2030.
Strategic context
At their meeting in Madrid, Heads of State and Government endorsed the new Strategic Concept to ensure the Alliance remains fit and resourced for the future, reiterating they will provide all the necessary resources, infrastructure, capabilities and forces to fully deliver on our core tasks and implement our decisions, while building on the progress made to ensure that increased national defence expenditures and NATO common funding will be commensurate with the challenges of a more contested global order.
Building on the 2021 Brussels Summit decision to adjust and broaden the use of common funding, at the 2022 Madrid Summit Allies decided as follows: taking into account affordability, accountability and sustainability, as well as the need for efficiency and further prioritisation, and noting that increases should be gradual and realistic, Allies committed to a financial trajectory for common funding. These commitments were reflected in the 2023-2027 CFRP and inform subsequent annual resource planning cycles up to 2030. The financial trajectory will be reviewed in 2025 taking into account the evolving security and financial environment and budget and programme execution.
Allies have decided to significantly strengthen NATO’s deterrence and defence posture as the backbone of NATO’s Article 5 commitment. This had and will continue to have a direct impact on Alliance resource requirements. Resourcing new political priorities and military requirements is needed to meet the Alliance’s Strategic Concept, NATO 2030 agenda, Deterrence and Defence of the Euro-Atlantic Area (DDA), NATO Warfighting Capstone Concept (NWCC) and associated Military Concepts and Plans. The new DDA Family of Plans and associated force, command and control, readiness and enablement requirements will be central drivers of NATO’s longer‑term Deterrence and Defence posture and will be the basis to define specific, enduring requirements which will be addressed in future common funding resource planning cycles. In this regard, the RPPB recalls that as part of the decision on common funding endorsed at the Madrid Summit the Council noted that requirements and their resource implications may further evolve in the period to 2030 in light of a constantly evolving security environment.
The DDA family of plans and associated requirements for, inter alia, forces, command and control, and enablement, will demand that Allies and NATO provide adequate human and financial resources. In line with the decisions taken by Heads of State and Government in Brussels and Madrid, the Strategic Commands will need to expedite submission of their operational requirements to the Military Committee (MC) and the RPPB to enable timely decisions on the capabilities and adjustments required to broaden the use of common funds in support of the full executability of the DDA family of plans. All stakeholders will need to conduct robust prioritisation, in line with existing policies and procedures, to enable informed decisions on the use of scarce resources and to make full use of all available mechanisms to ensure timely implementation thereafter.
Common funding remains a fundamental element of burden sharing. It is one of the key elements that binds the Alliance, providing essential support to the implementation of the three core tasks and to Deterrence and Defence, while sending a strong political message of cohesion and solidarity.
Overview of NATO common funding
The CFRP is a strategic tool which allows Council and senior decision makers in capitals to have a holistic view, from a NATO Enterprise perspective, on the requirements and main resource drivers for NATO common funded budgets and programmes, and to allocate resources appropriately. The CFRP covers the three common funding sources at NATO: the NSIP, the Military Budget, and the Civil Budget, which resource major capabilities in key areas such as, enabling deterrence, forward defence, readiness and interoperability, advance NATO’s digital and cyber capabilities, innovation, support consultation and decision-making, and enhancing partnerships.
The resource requirements in this 2024-2028 CFRP will support and enable, through the provision of common funding, the implementation of capabilities, services and activities that turn NATO’s strategic priorities and objectives into action.
The Alliance is also exposed to macroeconomic global conditions, affected by global supply chain and labour market fluctuations, which led to a considerable rise of inflation in NATO countries. In the context of the development of this CFRP, the RPPB undertook to develop a Common Funding Inflation Framework to cover how to reflect in real terms the 2022 Madrid Summit decision on common funding. The application of inflation in this and future planning frameworks will not pre-empt CFRP discussions, but will inform deliberations on upcoming CFRPs as one of the parameters to be considered by the RPPB in their evaluation of affordability. Inflation per se is not a requirement and Nations will continue to determine ceilings, planning and indicative figures on the basis of submitted validated requirements, although considering their projected cost evolution as a function of the impact of inflation.
Council has approved the RPPB report on enhancing transparency, accountability, management performance and long-term efficiencies in common funding, which was endorsed at the 2023 Vilnius Summit. The report highlighted the need to integrate efficiencies into the resource planning process.
The recommended ceilings for the Military and Civil Budgets now enable the preparation and detailed screening of the 2024 budgets that will be submitted to Council for approval by the end of 2023. The detailed submissions by Budget Holders must focus on prioritised requirements that align to the actual 2024 needs to meet NATO’s objectives and agreed priorities. The Budget Committee will consider all funding options including the controlled use of any special carry forwards and refundable surpluses as well as the continued focus on efficiencies, to limit the amount of funding to be called with actual contributions.
This is the second instance of the development of a CFRP after the 2022 Madrid Summit decisions on common funding, hence there are several lessons identified from this resource planning cycle that the RPPB will take into consideration towards reviewing the relevant directives, guidelines, processes and procedures.
NATO Security Investment Programme
The NSIP contributes directly to deterrence, defence and security, by supporting capability development and delivery, particularly on air, land and naval facilities, bulk fuel pipeline systems and storage, reinforcement, sustainment and enablement capabilities, core communications, information technology networks, satellite communications and readiness initiatives.
Overall, the approved programme saw an increase in solidity across all years in the planning horizon as compared with the 2023-2027 Medium Term Resource Plan (MTRP).
The RPPB recommends a NSIP ceiling of EUR 1,324.4 million in 2024, noting the planning figure of EUR 1,710.6 million for 2025 and that submitted requirements rise to EUR 3,565.3 million in 2028 and are projected to reach EUR 5,786.4 million in 2030.
Military Budget
The Military Budget contributes, inter alia, to strengthening NATO’s deterrence and defence posture, provide core military capabilities, fulfil responsibilities assumed by NATO in Alliance Operations and Missions, and to foster interoperability of Alliance forces. NATO Military Authorities’ projections are predicated on the development of the Concept for Deterrence and Defence of the Euro-Atlantic Area (DDA) and the NATO Warfighting Capstone Concept (NWCC).
In light of the radically changed security environment, Allies have accelerated strengthening NATO’s deterrence and defence and given the 2022 Madrid Summit commitment on common funding as well as the need to deliver on NATO 2030 requirements, the RPPB recommends a total Military Budget ceiling of EUR 2,128.3 million for 2024, noting that planning figures rise to EUR 3,097.6 million in 2028 and are projected to reach EUR 4,390.6 million in 2030.
The NATO Command Structure Entities and Programmes budget group enables the functioning of the backbone of the Alliance's military structure, the maintenance of common funded capabilities, supports the sustainment of operations and missions and enables immediate responses in times of crisis, including on humanitarian support. Key resource driver changes include the communications and information systems (CIS) and services across the Commands, the improved ability to continue to operate under adverse and hostile conditions, the continuation of the adaptation of the NATO Command Structure and the delivery of additional (NATO 2030 related) requirements. The RPPB recommends a ceiling of EUR 1,217.4 million for 2024, noting that planning figures rise to EUR 1,969.7 million in 2028 and are projected to reach EUR 3,201.9 million in 2030.
The Alliance Operations and Missions budget group covers the NATO Mission Iraq, the Balkans Operations, Operation Sea Guardian and NATO's Support to the African Union. Key resource driver changes for the first two include uplifts of personnel in theatres with the associated additional real‑life support and CIS capabilities. The RPPB recommends a ceiling of EUR 61.0 million for 2024, noting that the planning figures rise to EUR 94.1 million in 2028 and are projected to reach EUR 104.6 million in 2030.
The NATO Alliance Ground Surveillance Force continues to provide valuable Joint Intelligence, Surveillance and Reconnaissance (JISR) to military commanders, particularly in relation to the radically changed security environment on the Eastern flank. The RPPB recommends a ceiling of EUR 264.1 million for 2024, noting that the planning figures rise to EUR 371.5 million in 2028 and are projected to reach EUR 390.5 million in 2030.
The NATO Airborne Early Warning and Control Force is a significant Joint Intelligence Surveillance and Reconnaissance capability that provides a major contribution in the current security environment and has proven a critical capability in NATO's deterrence and defence posture. The recommended ceiling for the combined Provision and Employment budgets is EUR 420.2 million in 2024, noting that planning figures rise to EUR 451.2 million in 2028 and are projected to reach EUR 456.6 million in 2030.
The Defined Benefits Pension Scheme shortfall covers projected liabilities with retirees. In view of the actuarial identification of the corresponding requirements, the recommended ceiling is EUR 165.6 million for 2024, noting that planning figures rise to EUR 211.1 million in 2028 and are projected to reach EUR 237.0 million in 2030.
Civil Budget
The Civil Budget enables NATO Nation’s consultation and decision-making process, oversees policy development and contributes to policy implementation across the Alliance. Key resource drivers in support of deterrence and defence include the accelerated development of interoperability standards, investment into data and Artificial Intelligence capabilities, more training and preparedness, enhanced situational awareness as well as cyber, counter-terrorism, hybrid, energy, data science, innovation and climate change enhanced cooperation with Partners, as well as the salaries of the International Staff, the operation and maintenance of Brussels Headquarters’ facilities and services, the pensions contributions for active staff and projected liabilities with retirees.
As a result, the recommended ceiling for the Civil Budget is EUR 417.7 million for 2024, noting that planning figures rise to EUR 600.7 million in 2028 and are projected to reach EUR 739.8 million in 2030.
