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By Howard Wheeldon, Senior Strategist at BGC Partners

19 May 11. Seemingly stretched to absolute limits and yet through an amazing feat of ingenuity and skill of senior officers somehow still managing to do all that is asked these are not easy times for the Royal Air Force. Increasingly stripped of resource and with equipment and manpower fast running down to absolute limits of required capability necessary to do the job pressures now being exerted on the RAF are to say the very least challenging and formidable. With large scale missions in Afghanistan and now in Libya there can be little doubt that when it comes to matching air power capability and resource against current and anticipated demands that the RAF is now very stretched. Despite full recognition of the huge UK deficit problem and mess that the previous government left behind there does in my view remain a strong case to suggest that the Coalition government needs to reconsider the manner in which UK air power resource is being dangerously stretched.

As we enter a mini-review process of SDSR and that over the next two months will seek to find further potential for cuts we need I believe to change some of the emphasis of how we are attempting to balance the UK defence budget. For a start there needs to be far more effort on the whole process of acquisition and of how all elements of capability delivery are managed and co-ordinated. For years the MoD has over anticipated and under delivered but now at long last since SDSR, since the appointment of Bernard Grey as Chief of Defence Material and since the part time Levene Defence Reform Group steering committee began looking at creating more cost effective ways for the management of defence by the MoD the tide of cost waste could be turning. These are interesting times for the Secretary of State for Defence Dr. Liam Fox meaning that if he gets this right and improves the overall effectiveness of the defence process very considerable cost savings could be achievable. But in our race to cut costs we must take great care not to go throw out what we might later regret in terms of equipment and manpower resources. Perhaps we should stop and think awhile and rather than go too far down the road of slashing further capital equipment and trained RAF resource focus on improving the effectiveness of what we have and maybe force all three of our armed forces units to work far more closely together. Whilst there can be little argument that across parts of the MoD process radical surgery at this point and with the world looking a slightly worse place than it did a year ago a degree more care is need as to how we move forward from here. With the Levene report due in July and Bernard Gray working very hard to bring about change no one should be in any doubt that two years from now the MoD will be a very different place. Meanwhile having already cut back on so much defence hardware and equipment within both the RAF and the Royal Navy the government should now lean very much harder on the Army.

Given a fast changing world in terms of sudden capability need I could argue that proposed and already made SDSR related cuts have already bitten too hard. But I do understand the government position and that the situation in the economy is so serious and that with cost and waste seemingly out of hand that defence must take its share of cuts. More savings can and should undoubtedly be made but given what I have said above these should now progressively concentrate on first on the Army, secondly on the whole process of how defence procurement is decided and finally, making swinging cuts in how the MoD formally operates. I suspect that whilst we await the Levene report that is attempting to refine and deliver much needed radical reform and streamlining of the MoD we should over the next few weeks bite our tongues and be patient. Changing the archaic system that in terms of procurement and operati

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