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U.K. PLACES CARRIER ORDER

U.K. PLACES CARRIER ORDER – DEFENCE SPENDING ON THE RISE
By Julian Nettlefold, Editor, BATTLESPACE

25 Jul 07. As expected, the UK Government today signalled its intention to purchase two new aircraft carriers, offering unprecedented capabilities for the UK’s Armed Forces, after the MoD agreed its budget for the next three years from April 2008. (See: BATTLESPACE UPDATE Vol.9 ISSUE 26, 29 June 2007, Sources suggest that the MoD will place an order for the two CVF Carriers). This order also enabled the formation of the much discussed Shipco, the new BAE/VT JV for military shipbuilding.

In addition to the CVF Order the Government announced the Comprehensive Spending review showing a rise in defence spending. However, the slant towards spending on the Royal navy, leaves a yawning gap in the desperate requirement for more equipment for the already overstretched Army in Iraq and Afghanistan.

Today’s settlement of the Comprehensive Spending Review for defence gives the department an annual budget of £34bn in 2008/9, £35.3bn in 2009/10 and £36.9bn in 2010/11.

This is an additional £7.7bn for Defence by 2011, equating to 1.5% average annual real growth against our CSR baseline, which excludes the cost of operations and the time-limited Defence Modernisation Fund. The Treasury will continue to fund the additional cost of operations over and above the Defence Budget, having already invested some £6.6 billion in supporting the front line since 2001.

Defence Secretary Des Browne said: “This CSR means an additional £7.7bn for Defence by 2011 – the longest period of sustained real growth in planned defence spending since the 1980s. It is evidence of the Government’s commitment to defence and to the men and women who serve with the utmost bravery in our Armed Forces.

“It also means that we can confirm that we will now place orders for two 65,000 tonne aircraft carriers – the largest ships ever sailed by the Royal Navy. The carriers rrepresent a step change in our capability, enabling us to deliver increased strategic effect and influence around the world at a time and place of our choosing.”

The key outcomes for defence:

* allows MOD to proceed with two new aircraft carriers, which will be the largest ships ever sailed by the Royal Navy and a key part of modern expeditionary capability;

* investment of £550m over the CSR years in Service accommodation, drawing on income from the anticipated sale of Chelsea Barracks. This confirms our plans to spend £5bn over the next ten years on upgrading and maintaining Service families and single living accommodation.

* provides £1bn over the CSR years to maintain a Strategic Deterrent, which will not be at the expense of conventional capabilities that the Armed Forces need;

Lord Drayson said: “When I launched the Defence Industrial Strategy in December 2006 I said that 2007 was the year in which I wanted to see results. Today’s announcements deliver just that. Confirmation by BAE Systems and VT of the creation of a Joint Venture, brings together both surface ship build and support, and provides exactly the through life provider we identified as necessary in the DIS and marks a major step in the creation of a globally competitive UK maritime industry”.

“The DIS is first and foremost about clarity from government allowing industry to deliver value for money. The announcement today of this very significant new warship order together with the formation of the BAES/VT Joint Venture go a long way to clarify the future for UK naval shipbuilding over the next 10 years, even down to saying what will be built in which yards, and to delivering the capability we need in the naval sector against clear time and cost goals.”

This unique project will be a very considerable test of the UK maritime shipbuild industry. It creates a through-life entity managing major surface warships from design to disposal.

HMS Queen Elizabeth and HMS Prince of Wales are expected to enter service

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