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By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

22 Jul 13. (The following is taken from a speech delivered to the 2013 Chief of the Air Staff’s Air Power Conference on the 17th July – Word Copy is available on request). I start with the premise that events since the last defence SDSR 2010 review have determined once and for all that interdependence between the health of the nation and what we spend on defence are not only inextricably linked but now set in stone. Air power capability has over the past three years suffered a very high proportion of burden in an attempt to reduce the overall cost of defence. UK Maritime capability has also been significantly reduced but it is not just the Royal Air Force and Royal Navy that suffered such large scale capability cuts – industry suffered massively as well. Worse perhaps is that through the radical process of change it seems to me that all sides in this process have suffered loss of stability and trust.

The UK economy is now at last showing small signs of recovery but while the profit and loss account may be heading in the right direction be aware that the cash flow and balance sheet statements are unlikely to show signs of sustainable improvement before 2017 at the earliest. Out of necessity rather than judgement spending on defence has over the past three years been severely hit. For all that most would agree that it has been right that the Government should attempt to fill the large black hole in defence budgets. This has, we are told, now been achieved which if true is excellent news. I would however remind that the 2012/13 defence budget was under-spent in the region of £3bn and that little of this amount will be carried over into the current year. Indeed, on the present basis of expectation it seems that budget under-spend for the current 2013/14 year might well exceed £2bn.

Despite reassuring words from some in Government confirming that spending on defence equipment during the period 2016 to 2020 will rise by 1% in real terms I suspect that as we move further toward achieving our ‘Future Force 2020’ ambition there will be further trouble ahead for military and defence. Indeed, while it is correct to suggest that we are now moving in the right direction my fear is bound to be that with SDSR 2015 now less than two years away any hope that we may have for achieving near-term consistency and stability in the UK military and defence arena is bound to remain challenging.

American author Tom Robbins said that “true stability results when presumed order and presumed disorder are balanced”. “A truly stable system” he said “expects the unexpected, is prepared to be disrupted and waits to be transformed”. This may be a good summary of what our armed forces and the defence industry that supplies them have gone through. And while speaking of inconsistencies it may also be true of what we await in proposed changes to defence procurement management.

I am not proposing to dwell on the proposed GoCo or DE&S+ solutions other than to agree that the current system of defence procurement has failed all sides – customer, user and supplier – and that from an industry perspective whatever emerges will be supported by them.

We all crave stability just as we do fairness, transparency and, in the military and defence arena, the return of missing trust. In industry we appreciate that Government does now appear to have an ‘unofficial industrial strategy’ with regard to defence but what a pity that this is sometimes spoilt by MoD and other civil servants and others engaged in procurement persist in singing from a rather different hymn-sheet. Importantly industry really does appreciate the new vigour with which the Government has attested itself in terms of UK defence exports and that national interest is now at long last being put before political correctness.

But we do have another important message for government – while industr

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