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15 Jul 02. Defence Secretary Geoff Hoon today welcomed the biggest increase in the defence budget for 20 years and stressed that the extra money will be invested in battle-winning military capability.

The budget will rise by £3.5bn between now and 2005-06 as a result of Spending Review 2002, which was announced by the Chancellor today.

Responding to the settlement, Defence Secretary Geoff Hoon said: “This is an excellent settlement for defence. It reflects the Government’s commitment to strong defence and to the continued modernisation of the Armed Forces.

“The strategic environment is changing. As well as international terrorism, we face a range of other potential risks. This settlement means we can now invest in delivering the strategies and technologies required to meet these challenges.

“We will invest in mobility and precision-strike capabilities, and others that are vital for expeditionary operations. We will also increase our contribution to security at home. And we will work increasingly closely with our allies and partners, in NATO, the EU and elsewhere, including our important new relationship with Russia.

A White Paper, a New Chapter to the Strategic Defence Review, setting out how the U.K. plans to adjust defence capability in the light of the sort of threats that were seen on 11 September 2001 was unveiled by Geoff Hon on September 18th.
He announced an acceleration of the Watchkeeper UAV Programme (See Watchkeeper decision in August), upgrades to E-3 AWACS, Nimrod R1 and Canberra surveillance aircraft, new Support Helicopters, Special Forces equipment enhancements and an
acceleration of the FRES Armoured Vehicle programme.

£578m of the additional money will also allow the MOD to modernise its business information systems, especially in the Defence Logistics Organisation. The MOD will continue to look hard at ways of improving efficiency to ensure that the tax-payer gets better value for money from defence spending.

The MOD’s SR2002 settlement represents the biggest sustained real increase in defence spending plans for 20 years. It increases the Total Departmental Expenditure Limit for defence by £3,453m by 2005-06, compared with 2002/3. In real terms, this increase represents 1.2% average annual growth over the next three years, and real new money of £725 million in 2003-4, £798m in 2004-5 and £1,047 million in 2005-6. It is equivalent to 1.7% average annual real growth on the previous (SR2000) budgeting system.

Following the events of 11 September, the Defence Secretary commissioned work on a “New Chapter” to the SDR to ensure that the UK had the right forces and the right capabilities to meet the additional challenges facing the UK. This work is now complete and will be announced very shortly. It has confirmed that the original conclusions of the SDR (taken together with lessons learned since) remain valid, but that further additional funding is necessary to ensure that our Armed Forces have the equipment and capabilities needed to respond to a changed world. SR2002 provides £1bn of new capital and £0.5bn of new resources for these new equipments and capabilities.

Comment: Well this response to the September 11th threat is better than nothing (See BATTLESPACE Volume 5, Issue 4, April 2002, ‘DON’T MENTION THE WAR!, The effects of the 2002 Budget on UK Defence Spending). But, it looks as if it maybe a rerun of the BOWMAN saga if this goes wrong and industry will be very wary of entering any joint development projects for Networkcentric technology after the BOWMAN experience. Of the £3.5bn, £578m goes immediately to the DLO, £1.5bn to Falcon and associated systems of which £400m was budgeted which leaves approximately £1.5bn for modernising the surveillance aircraft, speeding up Watchkeeper, buying Support Helicopters and equipping Special Forces. The BOWMAN system is the bearer for this project but the bandwidth restrictions of BOWMAN will require g

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