As we lead in to yet another Comprehensive Spending Review process, one that has the potential to either improve or damage defence it may be timely to remind of some of the damage done to defence by SDSR 2010. In doing so I take fully on board the dilemma that the Coalition Government found itself in after it took office in May 2010. Two years after the devastating financial crisis these were very troubling times and almost all sections of government, with the exception of the National Health Service, were forced into to make ruthless cost savings if they could. Defence was rightly to be no exception but how this was done will I suspect remain the subject of debate for many more years to come.
Referred to as a strategy of austerity, I well recall remarks made by the highly respected Carrington Professor of International Security at Chatham House, Dr Paul Cornish describing the 2010 Security and Defence Strategy Review as being “a tale of promises and fears” as if it were only yesterday.
Thankfully we have now moved on and while the outlook for defence in 2019 may be hampered to an extent by the thought of another Comprehensive Spending Review process in prospect, I can at least conclude that positives still outweigh negatives compared to the position we found ourselves in nine and a half years ago.
Paul Cornish assessment of SDSR 2010 was all too quickly proved to be correct and while the strategy of intent behind the review, as had been previously outlined by the then Foreign Secretary William Hague, had promised a fundamental appraisal of Britain’s place in the world and how we operate in it, what we eventually got in SDSR 2010 was to be a strategy review process and intent that would be seen to be as ruthless as it was challenging to the military and industry alike. At the time I concluded that it was one whose primary content was deep fundamental cuts many of which at that time made little if any strategic sense. It would also be a review that angered serving military personnel because when it came to the offer, pensions and future prospects it impacted on all of them.
In hindsight although we have to accept that efforts to ensure defence was made more affordable and efficient were necessary, just as they still are today, what we got in SDSR 2010 was a mess of ill thought out judgements that I recall were made by a handful of Whitehall mandarins that had little idea or indeed, understanding of what was required to provide adequate defence capability.
Put together in haste and with little consultation with the military let alone industry there was, as Paul Cornish observed at the time, insufficient time given for a root and branch reassessment of need.
All aspects of the military were to be laid bare by SDSR 2010 and in a broad sense, safe to say that it took no prisoners. These were the most drastic cuts in defence for a generation and more and they came from a Coalition Government led by a Prime Minister and Chancellor of the Exchequer who just did not understand the needs of defence.
Although it was Liam Fox who as Secretary of State for Defence at the time who was forced to accept what had been delivered by his civil servants it would be his successor Philip Hammond who as Secretary of State for Defence from 2011 to 2014 would force the cuts through. He did so with alacrity and calmness and it was no accident that he was and remains known as ‘Forensic Phil’. Mr. Hammond’s sole belief it seems was that the cost of defence must be cut no matter what and that the so called £37 billion ‘black hole’ in the defence budget built up over many years must be filled by delaying planned spending. To that end Mr. Hammond was able to save considerable sums over the following three year and rather than allow any savings to be rolled back into defence paid several billions of pounds back to the Treasury.
Such was the shock as to the extent of the proposed cuts in defence announced in SDSR 2010 that the then Secretary of State for defence, Liam Fox was forced to meet with US Secretary of Defense Robert Gates who had expressed serious concern over the UK proposals. Gates was said to have been reassured by whatever Liam Fox told him and I well remember Dr. Fox calling me personally on a Saturday afternoon to provide the reassurance that I and others required. To be fair, much to my surprise, so too did Robert Gates!
Meanwhile and as Prime Minister David Cameron had been forced to decide that cancelling the two proposed Queen Elizabeth class aircraft carriers was no longer an affordable option the Royal Navy was starved of funding. I recall that the Royal Navy was short of around 1,500 personnel and that as a result of this it would no longer be able to meet its full commitment in respect of laid down tasks. The MOD was now also being required to fund the renewal of the nuclear deterrent capability whereas hitherto this had come from separate government funds.
Save from reminding that SDSR 2010 led to many important plans such as Future Rapid Effects Systems (FRES) for the Army being seriously watered down, cancellation of projects such as Nimrod MRA4, premature withdrawal of Harrier and decommissioning of the excellent Type 22 frigates and other ships, I shall refrain from talking further about specific equipment cuts. If some of these cuts were devastating for the military they were equally so for industry too. Sadly the words sovereign capability and its importance to the nation had got lost in the mists of time.
From a UK military strategic position SDSR 2010 was soon seen to be a shambles and it would lead to a formal understanding that in future the UK would no longer be able to deploy on more than one front at any time. Indeed, such was the intent behind the damage and the lack of military observation and objective within the SDSR 2010 architecture Liam Fox’s successor as Secretary of State, Philip Hammond observed to the House of Commons Defence Select Committee three years after SDSR 2010 publication that UK military personnel would not be deployed in a conflict zone again for many years to come. Then came Iraq and Syria.
While we could in theory just about claim to be meeting the 2% spending on defence target, a figure that in 2014 at the NATO summit in Wales would, led by the UK, lead to a commitment of all NATO members to seek to achieve 2% spending on defence, the reality was that if one removed items such as pensions that had been added into the 2% UK spending claim the actual amount that we spent of defence I the UK had slipped to about 1.8% of GDP. Given that we would soon be fighting in Libya as well as Afghanistan, all this was made worse by the fact that the additional cost of deploying military personnel and equipment was now being taken from the defence budget as opposed to Reserve funding that had hitherto been used to pay for conflict involvement by UK military personnel.
There followed the equally horrendous ‘National Security Through Technology’ White Paper that was basically a commitment from government to ‘buy-off-the-shelf’ wherever practical in order to save money. One can imagine what industry thought of that and later the government backed down.
Positive decisions that did emerge from Government such as Mr. Cameron deciding that rather than only have one of the two new aircraft carriers at sea at any one time both would now be fully operational appeared to come off the back of a fag packet and having not been properly discussed. The right decision this may have been but it came with no additional funding made available and the Royal Navy would have to find the personnel required from its own resources and bear the full cost of training them.
One could quite reasonably argue that the budget shortfall of previous years had been the product of past defence cuts and it is certainly true that previous rounds of defence spending plans had been deliberately underfunded in the hope and anticipation that sufficient efficiencies could be found to make up the slack. Defence inflation, in part caused by the government cutting numbers of planned ships such as Type 45 destroyers from the originally planned 12 to just six are an example of that.
That defence procurement has improved and that the taxpayer is getting improved value for money that hitherto can hardly be argued but that cannot hide from the high cost of political decision that often bore little reasoning in relation to well thought out defence strategy.
Enough – I will leave it at that.
CHW (London – 17th April 2019)
Howard Wheeldon FRAeS
Wheeldon Strategic Advisory Ltd,
M: +44 7710 779785