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UK Defence – Get Ready For More Smoke and Mirrors By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

Ahead of my being away on visits for the rest of this week, here are just few not dissimilar afterthoughts in relation to the situation that UK defence now finds itself in. Can I also say here how grateful I am for the large number of responses that I received following publication of UK Defence (283) on Monday.

Bad enough that inflation has risen to 2.9% and that this represents a four-year high and also that this vitally important sector of government responsibility hardly featured at all either during or post the election campaign. Right now it is hard to imagine anything other than the situation for defence being likely to get worse. By that I mean that defence will, like other sectors of the economy, find itself squeezed. As I said in UK Defence (283), given what has occurred over the past six days there is in my view scant chance that real and underlying requirements for defence might be better prioritised from here on in. If there is any positive news it can only be that recent events have shown the need to improve the UK’s underlying security infrastructure and intelligence activities. Be in no doubt that the government will genuinely respond to the need to increase security and policing.

I have no wish to sound defeatist in relations to defence but unless and until the public is right behind it governments are not about to prioritise and spend more on defence. Yes the positive rhetoric will be there but given the long history of fudging and even the very clear visibility of how stretched our armed forces, I fear that very little will change in respect of responding to needs. Right now we are back to affordability and further pressure to do more with less.

 

For all that, I can at least say that Sir Michael Fallon back at the helm in MOD Main Building we at least have a steady pair of hands on the defence tiller as opposed to an unknown quantity. Sir Michael has an uncanny ability to make it sound as if all is well in defence when it is clearly not. He knows as well as the rest of us do that not only is defence underfunded but that his SDSR 2015 funding ambitions in regard of finding £11 billion of cuts to fund expansion never stacked up. Right now defence is rather like a boat that is leaking. Before long the danger is that it may begin to list!

 

But even having said that I welcome the fact that Mr. Fallon has remained in position – for now at least – because whatever view you take of him he remains on top of his brief. There is an old adage of course that new brooms sweep clean but that makes me all the more certain that we should be pleased that it will be Mr. Fallon and his team that will be picking up the defence pieces over the coming months.

 

So, is another defence review in prospect? On Monday I talked about the possibility of a mini review or new chapter to SDSR 2015. Well, something is on the way to be sure although it may initially be more like an internal budget or financial review of defence –one that nevertheless can be expected to be very demanding not only of answers but of solutions as well.

 

One of my many respected readers suggested to me yesterday that looking back, there was only ever a vanishingly small probability that the so-called efficiency targets required as part of the overall funding requirement for SDSR 2015 could have been found from existing defence programmes or from more and even deeper civil service cuts together with MOD real estate base closure and sale. Such concurs with views that I have previously expressed many times.

 

While we are short on facts because the MOD has as yet been unclear as to the impact of currencies on the capital budget and of just how much in dollar terms it has covered forwards, what we definitely do know now is that SDSR 2015 was not only over ambitious but also seriously underfunded as well.

 

Thus once again today we appear to be staring into another big underfunded defence black hole and one that is now faced to take on the additional burden of sterling’s fall from grace. Arguably, we might even be talking of an even greater underfunding situation than when the Coalition Government took over in 2010 under David Cameron. That General Election result was, you will I am sure remember, quickly followed by large scale change as the new Coalition Government continued to back the findings of Bernard Gray’s procurement review analysis and also authorised actions recommended in respect of Defence Reforms by Lord Levene. We have come a long way since then – some would say one step forward and two steps back. Who can forget those wonderfully colourful expressions in respect of defence procurement such as ‘conspiracy of optimism’!

 

Of course, problems that the new Government has are already well known and are certainly not restricted to defence. Health goes through the same sort of drama every year but the difference here is that politicians know that the public is always behind health and thus somehow, the Government of the day finds more money to pour down the gaping drain that is NHS.

 

Another factor that defines defence alone is that the cancerous effects of underfunding and that initially show themselves in defence programme delay and that are followed by more defence inflation and finally, even greater levels of underfunding is a spiral that does no-one engaged in defence any good. And yet I fear that is exactly where we might be heading, back in that downward spiral.

 

Bad enough that the May government lost its majority in the House of Commons but the agony could be about to get worse for government spending departments because of the partnership that will likely soon be confirmed between the Tories and the DUP. By this I refer to perfectly understandable reasoning that allows the DUP to ask for its pound of flesh for supporting Mrs. May in the House of Commons, but a dreadful realisation that if too much is granted to Ulster others will quickly clock on to demanding the same. I can almost hear the shrieks from Scotland, Wales and the English regions calling for whatever has been given to Ulster must be given to them.

 

However one looks at defence in the short term there is a perfect storm brewing out there and I fear that with there being little chance of additional funds being made available for defence other than what has been promised defence will once again be forced to shrink even more. Whatever, we are in for platitudes, obfuscation and more smoke and mirrors.

(Commentary will return next Monday)

CHW (London – 13th June 2017)

Howard Wheeldon FRAeS

Wheeldon Strategic Advisory Ltd,

M: +44 7710 779785

Skype: chwheeldon

hwheeldon@wheeldonstrategic.com

@AirSeaRescue

 

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