Proone, as I'm sure you know, but choose to ignore, its not the actual total real cash amount that is spent its the percentage of GDP. IIRC, NATO mandates that its members spend a minimum of 2.0% and ours in the UK is around that figure, just to ensure we meet NATO Minimum Military Requirements.
Granted yes, its a not inconsequential sum. Yes, naturally, it could be better spent and there has been a phenomenal amount of wastage.
We were punching above our weight by pushing the Expeditionary model after the 1998 SDR, but without the investment necessary in both people and equipment to be able to fulfil it. Hence a lot of the legitimate complaints about overstretch during HERRICK and TELIC. Had these operations occurred during the levels of manning/equipment seen during the cold war, theres a good chance we would have got away with it/not had the overstretch complaints.
The matter of punching above our weight and deciding what we expected our forces to do was meant to be one of the questions that SDSR was meant to consider and answer. Not really sure that this particular brief was really met, but by default it seems that the decision has been taken and that this is the direction we are going to go in. Politically and strategically, compared to the rest of our NATO partner nations, we could argue all day as to whether HERRICK and TELIC have delivered any real tangible benefits to us or to the "host" nations, in the way that operations in Bosnia/Kosovo/Sierra Leone did.
My own personal view is that it will not be a bad thing for us to be a UK Self Defence Force, IF we do it properly and allocated resources both financial and personnel accordingly, from the Infrantry, through the somewhat creaky supply chain through to the shiny pointy FJ fleet. I'm not convinced thats happening at the minute, thanks to the usual combinations of political and ministry incompetence and infighting between the service chiefs, among other factors.
Frankly, I dont see the point in a nation our size being involved in expeditionary warfare. Particularly given the prevailing financial situation.
Next big decision, if this is the future structure that the UK forces are going to have to operate in, is whether it is the right thing to replace Trident with a like-for-like system.
FWIW, my own POV is that we should not.