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U.K DEFENCE BUDGET CRUNCH

U.K DEFENCE BUDGET CRUNCH
By Julian Nettlefold, Editor, BATTLESPACE

21 Feb 08. We could put the current crisis regarding the debacle over defence spending better than the FT which said ‘Seasoned observers of British defence policy are struggling to identify a strategy behind government decision-making. This has led some to conclude that there is none. On the face of it, there should be relief that the government will soon publish its national security strategy, announced by Gordon Brown when he took over as prime minister last summer.’

The Defence Management Board (DMB), met on Wednesday to resolve the current crisis which some see as the biggest since the early 70’s and bizarrely when our Armed Forces need a large increase in the budget to meet current operational requirements.

To deflect any criticism from previous cancellations such as that of TSR2 in the 70’s and to save valuable Scottish votes in particular, the MoD is believed to have devised a plan whereby the majority of big ticket items will be stretched to delays of two years or more and filling in for urgent equipments will be met by Urgent Operational Requirements (UORs). This neat exercise fulfils two goals, one in that it reduces the Major programme crunch expected in 2009 and cleverly reduces the Defence Equipment Budget by a huge sum as UORs are taken out of the Treasury Budget not the MoD Budget! Nice work Prudence!

The four Programmes targeted are believed to be Typhoon Tranche 3, CVF/Type 45, FRES and OUVS.

The FT reported that Mike Turner, chief executive of BAE Systems, has warned that stretching out the delivery deadlines for planned defence projects will cost the government more money in the long run.

“They will undoubtedly stretch programmes out. Unfortunately it costs money to
stretch programmes out,” Mr Turner said.

“The issue is: long-term decisions have to be taken on the defence budget for
the UK. Are we going to spend more as a nation on equipment that might be many years out to maintain the security of the UK?”

The Society of British Aerospace Companies (SBAC) warned that the decline in
Government spending on defence is putting national security, economic stability and the future of many manufacturing jobs at risk.

The warning comes as the Government’s Defence Management Board met on
Thursday 21 February to decide on delays and possible cuts to major defence
projects. This could result in workers being laid off in the industry and the loss of highly skilled jobs, hitting the country’s skills base. It would also leave the armed forces short of equipment in future despite increased demands being placed on them. Spending on defence has fallen from 4.5 per cent of GDP in the mid 1980s to 2.3 per cent today.

Ian Godden, SBAC Chief Executive, said “We are very concerned that the Government is about to make short term decisions to balance their books with insufficient regard for the industrial consequences or impact on long term value for money. The Government’s Defence Industrial Strategy was set up to prevent this from occurring.

“It was right to reap the peace dividend at the end of the Cold War. However, there are many, varied, threats that still face the UK and our defence spending does not match our foreign policy commitments. Other nations recognise the threats that they face and are steadily increasing the amount that they allocate to defence. We are asking our armed forces to do more with less.

“Defence is a vital part of any Government’s activities, not least because British wealth is generated all over the world, not just at home. It is in danger of being neglected, leaving the country unable to influence our interests at home or overseas.

The high value jobs, scientific benefits and revenue that the defence industry
contributes to the UK will also be eroded if defence is not given sufficient priority.”

Typhoon Tranche 3

We said in BATTLESPACE UPDATE Vol.9 ISSUE 47, 27 Nov 2007

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