Published one month ago, because I have yet to meet its new Defence spokesman, I had actually chosen to avoid making specific comment on the Labour Party’s – ‘Dossier of Waste in the Ministry of Defence 2010 -2021 – in part because I was inclined to believe that had a similar ‘Dossier of Waste’ in the MOD been published by the Tories twelve years earlier covering for example the period 1997 to 2010 when Labour was charged with responsibility for MOD spending, the total of waste could well have been substantially worse.
However, given publication of the MOD end year accounts last week and conformation that the MOD apparently wasted £2.3 billion in scrapped military procurement projects and Balance Sheet write-offs, a figure that represents 12.5% of the supposed additional five year £16.5bn defence budget boost and which we are constantly told was the largest increase for 30 years, made me think again.
According to the Labour Party ‘dossier’ losses include £1.4bn of equipment written off in respect of the MOD’s Integrated Review of Security, Defence, Development and Foreign Policy’ published in early 2021 and that had signaled a shift in emphasis from conventional forces to what was termed, cutting-edge warfare.
We have of course become rather too used to defence budget black holes and assertions made by the National Audit Office (NAO) that the MOD’s system for delivering major equipment capabilities is broken.
The MOD spends in the region of £40bn annually on the overall defence requirement of which around half of this is spent of equipment. There was by the way, no mention in the Labour report of the unsubstantiated claims made back in 2010 that the ‘Coalition Government’ which came into office that year had inherited a £38bn ‘black hole’ in the defence budget from labour (a black hole in this respect is a term often used to describe a funding gap covering the following ten years in the MOD 10 Year Forward Plan).
It is also worth pointing out here of how between 2011 and 2013 the Secretary of State for Defence Philip Hammond shrank this by pushing back and delaying cash spending on programmes to the point that there was an underspend of at least £5bn – money that went back to HM Treasury as opposed to being allowed to stay in the defence budget allocation – despite ‘Forensic Phil’s’ claim that any annual underspend was rolled forward into future year spending allocation.
In 2011 the NAO claimed that cuts to defence spending contributed to a £466 million rise in the cost of the UK’s 15 largest military equipment projects in a single year. Pushing cash spending back by delaying programme spend and that for example included a need to stretch the life of the Royal Navy Trafalgar class submarines is another example of why costs rise above original estimates. Another classic example was the decision to design and potentially retrofit EMALS (Electromagnetic Aircraft Launch System) to one of the two then in-build Queen Elizabeth class aircraft carriers for the Royal Navy – a ridiculous project that with over £1bn spent was thankfully abandoned (as far as I am aware, the EMALS system has still not been proven to work satisfactorily on US Navy ships).
I am not about to vouch as to whether Shadow Secretary of State John Healey’s claim that an additional £4bn has been wasted since the current Secretary of State for Defence, Ben Wallace has been in in post or not. It would, for example, be unfair to blame the current Secretary of State for the Ajax Armoured Fighting Vehicle, nor indeed his predecessor.
How many billions has been wasted on what is now called Ajax and was originally called ‘Scout’ – a project that started under the Labour Government as long ago as 2007 – a £500 million contract with General Dynamics UK was signed in July 2010 for the build of seven prototypes by then Coalition Government Defence Minister Peter Luff in July 2010 before in 2014, a fixed-firm contract was signed covering build of 589 vehicles at a cost of £3.5bn – the rest is now all but history except knowledge of the overall cost to the MOD of what has so far been one of the most disastrous MOD land systems procurements in living memory.
Back to the Labour Party dossier of which whilst there is much that I can hardly argue I do not agree with all the underlying sentiment. It is easy to criticise how someone else does it without the slightest knowledge of how they might have managed a similar situation.
However, figures of write off’s that they highlighted such as that of £147 million on Sentry E3-D AWACS capability which was termed the previous year by the MOD as an ‘advanced notification constructive cost’ (this of course, being made before the announcement last week that two RAF Sentry E3-D aircraft have been ‘sold’ to Chile – I also believe that one aircraft is going back to the US to be used for training purposes) – I rather suspect that given that the aircraft are already 30 years old and written off in the accounts in respect of asset value and that very little has been spent on capability upgrade save the necessary grounding four years ago in order to sort a potential galley fire risk, that the £147 million presumably refers to costs attached to US aircraft maintenance contracts and maybe also closure costs relating to the existing UK Sentry E-3D maintenance and repair operation at RAF Waddington?
Another inclusion in the Labour Party dossier is £21.6m attached to the withdrawal and sale of a Royal Navy Mine Hunter – HMS Quorn. Did we sell this vessel or give it away? Given that the vessel, the final Hunt class ship, was built as long ago as 1988 I find it difficult to believe it carried any value on the MOD balance sheet.
A £595 million write off of the Warrior Armoured Fighting Vehicle sustainment programme, one that MOD has walked away from in my view fore no acceptable reason is one that gets my blood boiling. To avoid a potential, heart attack I will make no further comment save that the decision to scrap Warrior is nothing short of disgraceful.
Amongst other large programmes highlighted include a £231m write down in relation to Land Equipment Fleet Optimisation (please let me know whether this is more hidden Ajax or Warrior), £95m on cancellation of ‘Fire Shadow’, £50m on cancellation of ‘Project Soothsayer, £104m on Warthog vehicle disposal, £413mwrite off taken in respect of the premature withdrawal and scrapping of Type 22 frigates, £1.1bn on Harrier GR withdrawal and give away of many of these a/c to the US Marine Corps, £3.7bn on Nimrod MRA4 contract cancellation, £94 million on the premature withdrawal of HMS Ark Royal, £35 million on the General Dynamics Bowman radio redundancy and disposal write off, £3m on Osprey body armour contract cancellation and so on and so on!
I note that the Labour Party dossier suggests that the Royal Navy currently has 13 Frigates and 6 Destroyers. Wrong! Having been towed from Plymouth to Portsmouth ahead of its sale for scrapping, Duke class Type 23 HMS Monmouth needs to be removed from the list of 13 Frigates.
Still to come presumably will be write down costs on the disgraceful premature withdrawal of the remaining 14 (at 2019) C-130J Hercules aircraft (despite the prospect of all of these aircraft, at least one of which has I believed recently been re-sparred) being sold to third parties, Sentinel aircraft disposal, more write downs in respect of Mine Hunter vessels and withdrawal of another Type 23 Frigate before the first in-build Type 26 replacement HMS Glasgow is commissioned along with premature withdrawal of Tranche 1 Typhoon aircraft capability.
It gives me no pleasure to write on defence related matters in negative form but when the cap fits, wear it. Of course, there is much that none of us no and as I said before, it is so easy to criticise. For the most part, the MOD does a really good job and while it has ample military minds to mix with some excellent senior civil servants it is steered by political decisions that are often not based on realities, reasoning, the ability to properly meet capability and capacity requirements.
Defence may well be a political choice until the enemy is at least at the back gate but within the politics of UK defence today I see too much style over substance, budgets ruling over those of capability need and requirement and planning.
Had I of course been writing about Labour’s own control of defence budget spending between 1997 and 2010 I would no doubt have been asking why when the 1997/8 decision that was agreed by the then Chief of the Air Staff and First Sea Lord in respect of reviving of Carrier Strike in a joint capability plan and that was subsequently signed off by the then superb UK Secretary of State for Defence, George (now Lord) Robertson of Port Ellen, consisting of two carriers planned – each of 40,000 tonnes – and of how these were subsequently allowed by 2009 at the end of the Labour Government to have grown to 65,000 tonnes!
CHW (London – 7th February 2022)
Howard Wheeldon FRAeS
Wheeldon Strategic Advisory Ltd,
M: +44 7710 779785