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RUNNING ON EMPTY? MORE DEFENCE CUTS TO COME?

RUNNING ON EMPTY? MORE DEFENCE CUTS TO COME?
By Julian Nettlefold, Editor, BATTLESPACE

15 Jan 08. For those of our Readers listening to the PM Programme this evening, Philip Dunne, M.P. Conservative Member of the Treasury Select Committee put the current Government financial position in clear perspective. He told Eddie Mayer that in effect the Government had spent £100bn more than stated and that the cupboard was bare, casting a worrying pall over the current Public Sector Pay Round in particular.

It is in this worrying time that serious doubts have been cast over many future Defence Projects with the CVF and FRES Programmes holding the headlines. The MoD is still sticking with its contract value of £3.9bn for CVF whilst some observers see £6bn through life as a better estimate with another £500m+ for Portsmouth Naval base facilities, extensions and dredging in particular. In addition, there is a concern whether the required 3000 crew per ship can be recruited.

The Government, as can be seen in the PQ below, is sticking to its guns on CVF in particular and sources suggest that the IAB last week failed to reach a decision on the choice of vehicle and the papers were sent back for further scrutiny to the IPT. It may be that although the NEXTER VBCI vehicle is seen as cheaper for purchase, the through life costings and effect on the U.K. Supply Chain may have been overlooked which places GDUK, which has the most comprehensive U.K. content Programme in place. (See: BATTLESPACE UPDATE Vol.09 ISSUE 51, 27 Dec 2007, U.K TRADE FIGURES UNDERLINE DECLINE IN DEFENCE INDUSTRIAL BASE?). Certainly the Balance of Payments was in a similar critical situation when the Editor worked for Krauss-Maffei in 1991supporting its bid to supply Leopard 2 to the MoD. Although, by dint of the spec., Leopard 2 was cheaper, Vickers clearly had the key advantage in U.K. content which placed the contract firmly in their hands. Whatever happens sources also suggest that the FRES numbers may be drastically reduced to as few as 750 Utility Vehicles with the other variants being subject to more delays with more Bulldog Upgrade contracts being placed and the warrior WLIP Programme speeded up.

House of Lords, Wednesday, 9 January 2008.

Armed Forces: Aircraft Carriers

Lord Luke asked Her Majesty’s Government: What are the projected in-service dates for the two new aircraft carriers. [HL910]

The Parliamentary Under-Secretary of State, Ministry of Defence (Baroness Taylor of Bolton): As announced by my right honourable friend the Secretary of State for Defence in the other place on 25 July 2007, (Official Report, col. 865),the two new aircraft carriers are expected to enter service in 2014 and 2016.

On January 11th, The Society of British Aerospace Companies (SBAC) has expressed concern over unconfirmed reports that the £3.9bn programme to construct two new aircraft carriers may be delayed by up to eighteen months.

The SBAC called on the Government to avoid any such significant delay in the project. The ships, HMS Queen Elizabeth and HMS Prince of Wales, were originally due to enter service from 2012. Following a previous delay this was put back to 2014 and 2016 respectively.

Ian Godden, SBAC Chief Executive, said, “A further significant delay in this project is a very worrying sign of the Government’s intentions when it comes to spending on defence and the country’s security, which is already under considerable pressure. It also runs contrary to the Government’s own Defence Industrial Strategy, which called for continuity of business to maintain skills and excellence in UK shipyards.”

The FT reported that Liam Fox, the shadow defence secretary, on Friday called on the government to clarify the status of two £4bn ($8bn, €5bn) aircraft carriers for the Royal Navy after it emerged that the contract for the flagship vessels could be delayed.

The Financial Times revealed on Thursday that officials at the Ministry of
Defence had b

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