Britannia Radio

Air Cdre Andrew Lambert and Allen Sykes

“…we are at war with a peacetime mentality.”

Vice Admiral Sir Jeremy Blackham

& Professor Gwyn Prins,

The Times, 15 May 2009

Published by the United Kingdom National Defence Association (UKNDA), February 2010

UK DEFENCE NEEDS

TREASURY AND MINISTRY OF DEFENCE

JUSTIFIED RESPONSIBILITIES

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Published by the UKNDA as a contribution to the debate on defence funding. Views

expressed are those of the authors.

Acknowledgements

This paper has been made possible only by the contributions of a panel of military experts:

Vice Admiral Sir Jeremy Blackham, Colonel Peter Walton, Commander John Muxworthy,

Christopher Samuel and Andy Smith, all of whom the authors wish to thank. Notwithstanding

so much valued help and advice, responsibility for the contents rests with the authors.

Authors

Air Commodore Andrew Lambert is a writer and commentator on defence, particularly

on Air Power. He is a late Fellow Commoner of Downing College, Cambridge. He has

written widely on the Psychological Aspects of Warfare and is the author of several

monographs on Coercion. He has been Commander British Forces for the Northern No-

Fly Zone of Iraq, Air Commander British Forces Falkland Islands, and Deputy NATO

Commander for NATO Air Operations in Norway. His most recent post was as Assistant

Commandant (Air) at the Joint Services Command and Staff College at Shrivenham.

Allen Sykes is a retired international businessman. He was lead author of the UKNDA’s

first discussion paper, ‘Overcoming the Defence Crisis’, in September 2008, and co-author

with the historian, Andrew Roberts, of the UKNDA’s third paper, ‘The Compelling Necessity

– the case for increasing the defence budget despite the present severe economic crisis’ in

July 2009. He has had a longstanding interest in political and military history, the Armed

Forces, defence strategy and international affairs.

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Putting defence provision in context

Two thousand years ago, Publius Quinctilius Varus, on his way back to winter quarters with an army

of three Legions (totalling 15,000 men), was ambushed in the Teutoberg Forest by an unexpected

coalition of tribes. The entire Roman army was annihilated, and news of the defeat caused mass

panic in Rome. What had seemed so assured and predictable turned into the worst disaster Rome

had suffered, threatening even the security of the Empire itself. For the rest of his life Augustus kept

muttering, “Varus, give me back my Legions.” Perhaps, as a student of history, the Emperor should

have learned to expect the unexpected.

Moreover, were Augustus alive today, he would have been truly amazed that the nearby Britannia,

now a rich country of over 61 million people, could field a combat force of just two Legions. Yet

10,000 men, we are told, is the maximum size that the UK can sustain in Afghanistan. - Limited by

availability of personnel, constrained by cash limits and weakened by wavering political resolve,

Britain’s Armed Forces are too few in number, vastly overstretched and entirely under-resourced.

Increased tasking is achieved by ever-increasing workload and fewer and fewer holidays.

Limited by availability of personnel, constrained by cash limits and weakened by wavering political

resolve, Britain’s Armed Forces are too few in number, vastly overstretched and entirely underresourced.

Increased tasking is achieved by ever-increasing workload and fewer and fewer holidays.

But, unintentionally, our Forces are their own worst enemy since every success they achieve is taken

for granted which then, in turn, results in still further cuts. Our Forces, already small, are still shrinking.

According to the present Prime Minister:

“The first priority of any government is to provide security for its people.” 1

If this means anything it is that defence provision must be directly related to the threats to our

security; that is it must be threat driven not budget driven.

Yet, sadly, his political rhetoric has not been met by his economic largesse. Defence spending, at

just 2.2% of the UK’s GDP, has never been lower. The cash budget allocated to defence is half that

spent on loan interest payments 2, half that on education, half that on health and half that on

Ministry of Justice and the Home Office. It is even (roughly) half the budget for the Department

of Work & Pensions. 3

Foreword

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1 Speech to Royal College of Defence Studies 6 Nov 2009.

2 ‘The cost of servicing the country’s £178 billion budget deficit represents just under double the annual budget for the

Ministry of Defence’, Times Online December 16 2009.

3 Central Government Supply Estimates 2009/10 Main Supply Estimates for the year ending 31 March 2010.

As the graph 4 below makes clear the true priority given to defence has been declining for years.

When allowance is made for the fact that the cost of ships, aircraft and equipment have increased at

2-3 times the rate of general inflation, defence funding has been falling in real terms at the same time

that threats to national security are increasing.

Despite what politicians may want us to believe, budgetary allocations were, and still are, a matter

of choice: money can be reallocated. Vast sums spent on political vote-winners are irresponsible if

the cost is the nation’s future security. If this graph looks bleak for defence, then most readers will

be surprised to find that the true picture is even worse. Perhaps £3-£4 billion of the money that

remained in that defence budget has been wasted by management incompetence.

In his statement in Parliament on 16 December 2009, the Secretary of State finally announced a range of

long overdue improvements to support the conflict in Afghanistan. Improvements, it has to be said, that

the UKNDA has tirelessly campaigned for.

He then went on to state:

“…In order to pay for the enhancements which will be funded from the core defence

budget and to address the cost pressures … we have to make reductions elsewhere in the

defence programme.”

This shortsighted measure is dangerously irresponsible. It directly contradicts the Prime Minister’s claim.

National security has indisputably been the last priority of the Labour government.

As Professor Michael Clarke, Director of the Royal United Services Institute, so tellingly puts it:

“For the first time, and explicitly, major war expenditure is coming straight from the

current defence budget and not from the Treasury’s contingency reserve - which is there

precisely to fund the sort of ‘contingency’ that war represents.”

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4 Defence Industries Council (DIC) News Release 15 October 2009.

Increasingly, the core defence budget has to fund the additional costs of the conflict in Afghanistan

and, together with deferrals, inflation and penalty clauses, the true value of what has effectively been

spent on defending the country and its future security has been in steady decline.

Of course, Britain is now in the midst of the most serious economic crisis since World War II, and this,

combined with 12 years of uncontrolled public sector spending elsewhere, has left government finances

exhausted. The national debt is soaring as public spending exceeds tax receipts by 25%. Any incoming

government must severely control public spending for many years ahead while simultaneously eliminating

waste and seeking far greater efficiency in what remains. Significant temporary tax rises cannot be ruled

out even though they would handicap much-needed economic growth. In these harsh circumstances

no area of public spending can be exempt from scrutiny. Even though successive governments 5 have

already cut defence funding savagely and dangerously - exposing Britain to serious and growing threats

to national security - this scrutiny will inevitably still include defence.

Economic considerations alone are, however, not the sole driver, and British defence policy cannot be

formulated in a vacuum, immune to events elsewhere. The world is changing, and not necessarily for

the better. The USA will probably maintain its position as the sole effective superpower for perhaps

ten years or more, but the new China, fuelled by economic growth and supported by an impressive

and expanding military arsenal, is sure to expand its power - probably at the expense of the old

alliances. Russia too, increasingly an oil and gas state, will flex its muscles on the European periphery;

while India, with nuclear weapons and a expanding population hungry for more, is sure to want elbow

room. The Middle-East, anxiously awaiting the announcement of an Iranian nuclear weapon, is

potentially explosive; while failing states such as Pakistan, Somalia, and Yemen are breeding grounds

for Jihad. At the same time climate change, and a burgeoning world population, will increase the

competition for scarce resources; these pressures will, in turn, increase the attractiveness of

superpower economic expansion into countries rich in minerals or with fertile soil. As the recent

Copenhagen summit demonstrated, developing nations are already aggrieved and impatient of Western

economic power. Populations that feel themselves disadvantaged or denied their ‘rightful aspirations’

are likely to be seduced increasingly by the attractions of violence, migration or terrorism.

Given the slow asphyxiation of defence and the changing world order, it is right that Britain now questions

its place in the world and rationalises its defence commitments. Both major political parties accept the

need for a far-reaching strategic defence review, but such reviews must assess our country’s needs, not

just pander to our political preferences. Those needs are largely externally determined: the nation has no

choice but to respond or to accept the risk of some very unpleasant consequences. No government can

be forgiven if it fails to assure the future security of the UK and its population. The Review must

necessarily be well-founded, objectively rigorous and based upon a number of sound principles:

First, it must be truly strategic: that is, it must look at the future role of the UK and her

security needs for at least the next 20 years. In that context it must take account of the

many and growing short, medium and long-term threats. Some, of course, can be

dismissed, others may be deflected, but many will have to be countered.

Second, the Review must assess how and where the country will be allied. Is the future strategy

to be found in a re-worked NATO, based on a trans-Atlantic collective security or, as the IPPR

contend 6 upon an EU orientation. What would our future allies offer, and what, in turn, would

the UK be expected to contribute? When and where would Britain have to act alone?

Third, the Review must be entirely honest in fully recognizing that that most of Britain’s wars

in the last 100 years were unforeseen, including all of the last five wars since 1997 (Bosnia,

Kosovo, Sierra Leone, Iraq and Afghanistan). Hence, whatever levels of assurance the Review

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5 As the graph shows, the recent previous Conservative administrations, while better than Labour, were also neglectful.

6 The Final Report of the IPPR Commission on National Security in the 21st Century, dated June 2009.

team attach to their strategic threat assessments they will need to be clear that the most likely

challenges the UK will face in the next 20 years will continue to be entirely unexpected,

surprising and unfunded. Whatever capabilities and force levels that have been elaborated,

it will be vital to have sufficient margin in all three services to meet the unpredictable.

Fourth is the issue of transparency. Once the range of threats and their counters have been

elaborated then the electorate must be fully informed and the appropriate resources made

available by statute of Parliament. Defence provision cannot be subject to short-term

political fiat - merely a wish-list conjured up by a Treasury defence team to meet regional

employment or other economic criteria. The whole country must sign up to the

methodology of meeting Britain’s strategic needs. Never again must defence be a milch cow

for profligacy elsewhere.

Finally, the Defence Review of 2010 must be established as part of a regular, longer-term,

4-5 year series of reviews that set the defence in context to meet the evolving geo-political

situation, The Reviews and their conclusions must not be subject to manipulation for shortterm

political expediency.

In his thoughtful Defence Green Paper 7, published on 3rd February 2010, the Secretary of State identified

many of the threats and challenges that will confront this country in the years ahead. Sadly, however, his

assessment is that the threats to our national security have irrevocably changed. Some threats, such as

inter-state conflict have radically declined, with other threats, such as international terrorism, having

replaced them. If this is an accurate representation of his sentiments then he and his staff are being naive.

Nothing has been disinvented; it’s just that it is currently not very lucrative to attack the West (particularly

the USA) conventionally, so terrorism becomes the only option. However, were the West to lower its

conventional guard then, as Georgia found to its cost, conventional attack is very much still on the table.

Equally sadly, the Secretary of State accepts that Defence Funding will continue to languish at the

bottom of the league, despite his own acknowledgement 8 that the world is a “more uncertain place

than previously”. His solutions to this funding dilemma are:

1. Ignore the threats from other states, including against our NATO Allies.

2. Continue to rob Peter to pay Paul for the costs of the war in Afghanistan.

3. Reform the Services (– but how?)

4. Increased role specialisation and greater integration with allies (but thereby accepting

the loss of national capabilities, constraining our independent operations).

It is clear, therefore, that the Strategic Defence review does not start with a clean sheet of paper. The

current government has indeed placed the fiscal cart well in front of the strategic horse. Where the

arguments should advocate increases, there is acquiescence; where there should be concepts to enable

this country to expand should the need arise, there is a vacuum.

Fortunately, there are other voices in this debate. This paper will, we hope, inform and contribute to

that debate, echoing such opinions as those expressed by the Financial Times recently 9

“One thing must be clear at the outset: Britons will not want to take themselves to the

margin of world affairs. This is a nation with an activist foreign policy and a desire to

be engaged in the world. It should not retire into splendid isolation. Instead, it must

answer the question of how best to project military power in the future.”

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7 Cm 7794 ‘Adaptability and Partnership: Issues for the Strategic Defence Review’ – the Defence Green Paper, February 2010.

8 Ibid., p5.

9 ‘Decision time for UK’s military role’, Financial Times 27 December 2009.

The question that has now to be asked is “Do the people of the UK really have the stomach to act on

the world’s stage, or would they prefer to be just a middle order player in the European family of

nations, giving up their nuclear deterrent and Security Council seat?” This is a stark choice and the

British people need to make it. But it must be an informed choice: free from the punditry of chattering

‘experts’; free from dogma; and free from platitudinous sound-bites.

Facile comparisons such as ‘hospitals or guns’ need to be replaced by true cost-benefit analysis. What,

for example, is the marginal increase in benefit from another £1 billion spent on a Health Service of

£82 billions compared with that same £1 billion spent in a seriously underfunded defence budget of

well under half? Or, conversely what are the real implications of £1 billion removed? The debate will

need informed leadership from the highest level so that principles can be properly adhered to and then

capabilities honestly resourced and guaranteed. It is undeniably true that we can have Armed Forces

much smaller than those that we have now, but at a heavy strategic price and increased risk. What

we can no longer afford is pretence: – pretence that the risks to our security are few and easily

controlled; pretence that we can shelter under another power’s umbrella; pretence that a state’s

“intentions” are more important than its military capability; pretence that we can send too few armed

forces into a battle, any battle, for which they are untrained, underequipped or unsupported.

In this grim situation the question has to be asked what in the national interest can reasonably be done

to streamline defence and ensure maximum value for money – what the Treasury team should

justifiably expect from the Ministry of Defence team, and vice versa. This short paper suggests areas

where the microscope of scrutiny should focus, where things could be done better, and where,

conversely, only fools, or those with a hostile agenda, would dare to tread.

7

In the interests of keeping this briefing paper as short as possible it will not be repeating the

substance of the two key recent UKNDA reports, which comprise References 1 and 2.

Both papers were widely circulated to political leaders, MoD, defence chiefs, etc.

Further electronic copies – in colour, plus enclosures, are available from either the UKNDA

website www.uknda.org or from Mrs Mary Huggins maryhuggins@btinternet.com who

can also supply printed copies.

The main political parties repeatedly proclaim that national security including the defence of the realm is

the first priority of government. Both the present Labour Government and its Conservative predecessor

failed to make adequate provision, hence the present severe defence funding crisis. Both parties are

committed to a wide ranging Strategic Defence Review immediately after the next general election, now

only a few months away. This leads to the fundamental defence question of our time as global threats grow.

Will either or both of the two main parties genuinely commit to fund whatever an objective

Strategic Defence Review shows to be necessary for Britain’s long-term security?

Britain is in the midst of the worst economic crisis since World War II. 12 years of this Labour Government’s

uncontrolled public sector spending has left government finances exhausted and the national debt soaring.

Severe cuts in public spending are inescapable.

Simultaneously, Britain with its NATO allies is involved in a major war in Afghanistan which would risk

being lost if troop numbers were not to be increased substantially – mainly American – and a powerful

new rehabilitation process is followed, as has now been agreed. Many other major threats also exist,

and are growing.

In this doubly grim economic and military situation, the incoming government must determine, in the

national interest, what the Treasury and Ministry of Defence (MoD) can responsibly and justifiably expect

from each other. This takes place against a 12 year background of massive sums having been spent on

health, education and welfare services with no significant attempts at reform, or to achieve value for the

public purse. In contrast, over the same period, the MoD, beginning with an initially inadequate budget

for its responsibilities, has had virtually no increase in real terms funding. Indeed many experts say

defence funding has declined in real terms. If this was not enough of a handicap, the MoD has had to

fight one minor, two medium size, and two larger wars – all unforeseen – on its inadequate budget. The

result is greatly impaired capability in all three Services, damaged morale, serious equipment and

manning shortfalls, unnecessary loss of life and casualties, and, not least, a loss of respect for the first

time by the American military as Britain’s Armed Forces suffer in reliability.

This short report addresses the mutual problems for the Treasury, the MoD, and indeed the whole Cabinet

of the incoming Government.

The report accepts that there is major scope for improvement in the MoD performance which would be

desirable and necessary at any time, but is absolutely essential, and achievable, given the right approach.

While economies in overall Service manpower, pay, training budgets and overall equipment quality and

quantity are not possible or sensible given the inadequate funding for at least 12 years, other promising

areas exist which offer real scope. This paper addresses, in practical terms, based on the long experience

of retired senior officers who have unstintingly given their time to its preparation, what can sensibly be

done. There is significant scope for major improvements in procurement, major staff reductions at the

MoD, combined with injecting additional expertise, and the more efficient sourcing of equipment away

from multi-nation collaborations and EU suppliers to single British and American firms. There also needs

to be an entirely new ethos in the MoD to focus on the timely supply of equipment to front line forces,

with the single-minded determination Lord Beaverbrook so capably demonstrated as Minister of Aircraft

Production in World War II. Further, politicians have got to stop overriding military advice on what is

needed in favour of indigenous job-creation or pleasing EU or American allies.

Finally, the Treasury is entitled to a lean, efficient, fit-for-purpose MoD – but the threats to which the

MoD should properly respond must be decided by the Prime Minister and Cabinet after a comprehensive

Strategic Review - and then properly funded.

In deciding which threats to prepare for the Cabinet must accept that defence is not really about choice, but

the necessity to meet otherwise unacceptable threats. In sum, defence needs are largely externally

determined. The nation has no choice but to respond or to accept some very unpleasant likely consequences.

Hence defence provision must be threat driven not budget driven. No other approach is acceptable.

8

Executive Summary

This paper also outlines the many and growing threats facing Britain and its allies. The list is awesome.

They must be considered against the background of all three Services being already run-down and

presently incapable of responding to some serious threats. Any further cuts into defence capability will

almost certainly be a mistake. Cuts now, which cannot be quickly re-instated later, may expose Britain

to serious threats in five, ten or twenty year’s time – the time it takes to initiate and bring to fruition major

defence projects. Hence, ill-advised short-term cuts are bad economics and make worse history.

The report briefly examines the state of all three Services, each of which needs a strong general

capability. Given the unforeseen nature of most wars, no-one knows which Service or combination of

Services will be needed in a future emergency. Hence it is sheer folly to reduce the defence budget to

the point where it causes inter-Service rivalry and infighting.

The report briefly sets out ten cogent justifications why the Government has little leeway in deciding the

appropriate level of defence funding. The good news is, however, that Britain still has magnificently

brave and capable Armed Forces. It is not too late to rebuild them to meet the many threats if a wise,

determined, objective leadership commits to it. The further good news is that while the much needed

efficiency drive in the MoD gets under way, capable of saving perhaps £3bn-£4bn per annum, the

Strategic Review will also take place. While that review will almost certainly identify the need for net

increases in defence expenditure – much cheaper than running otherwise serious risks and suffering large

economic losses – such increases – given the nature of defence expenditure programmes – can mainly

begin only slowly from 2011. They are likely to be of the order of £4bn-£5bn in the first year, rising to

perhaps £12bn in the third year (2013) and then levelling out. By then the worst of the recession will

be over and economic growth will have resumed, making the expenditures both more bearable and

affordable. Thus the justifiable interest of both the Treasury and MoD should be capable of being met.

The long-term security of Britain can still be met provided that there are no more ill-considered shortterm

cuts, that undeniable shortfalls are quickly met and an absolute commitment given to provide

whatever resources the Strategic Review shows to be necessary.

The twin pillars of Britain’s defence since World War II have been the Special Relationship with the

United States and the NATO alliance to which Britain’s contribution has been second only to that of

America. Unless we restore our defence capability both the Special Relationship and NATO cohesion

are at risk, which would leave us seriously exposed.

There is a last and particularly important reason for Britain to raise her defence contribution and make it

once again the top national priority. Britain is one of the leading nations below the big superpowers of

America and China. If Britain does not raise her defence funding – then we must be prepared to give up

our Security Council seat at the United Nations. We have been a powerful ‘force for good in the world’

since at least 1914. It should be unthinkable to forfeit all this and leave the nation dangerously

undefended to save what in a national context are relatively small sums of money in a temporary if severe

economic crisis. Is it really acceptable that because the Labour Government has made health, education

and welfare its top priorities, and has effectively frozen defence expenditure at a dangerously inadequate

level, the next government, be it Labour or Conservative, will be incapable of restoring defence to the

nation’s top priority? To give up Britain’s beneficial global influence and security by continuing the

neglect of defence would be a decision of such national folly that it is to be hoped no government would

dare take it. The time has come for British political leaders to remember our proud history, and to make

the convincing case for restoring the defence provision to its justified pre-eminent position.

9

Authors 2

Acknowledgements 2

Foreword 3

Executive Summary 8

The fundamental defence question in election year 11

The scope for improved efficiencies in defence provision 12

1 The unpromising areas 13

1.1 Manpower 13

1.2 Pay 14

1.3 Training budgets 14

1.4 Overall equipment quality 15

1.5 General comments 15

2 The promising areas 16

2.1 Procurement 16

2.1.1 The external evidence of serious inadequacy 16

2.1.2 Mismanagement 17

2.2 Major staff changes and reductions 21

2.3 Equipment sourcing criteria 21

The considerations which should govern defence provision 22

3 Why defence provision is so different to most public sector responsibilities 22

3.1 Defence provision must be threat driven not budget driven 22

3.2 The main threats facing Britain 23

3.3 The required broad capabilities to meet the threats 24

3.4 The Army 24

3.5 The Royal Air Force 25

3.6 The Royal Navy 26

3.7 Why defence and security are permanently the first priority of government 27

Conclusion 31

Recommendations 32

Annex A 33

References 34

Table of Contents

10

The two main political parties repeatedly proclaim that national security, including defence of the realm,

is the first priority of any government. Leaving aside that this defence priority has been quite inadequately

discharged over the last twelve and a half years, and indeed by the previous Conservative government, it

leads to the fundamental defence question of our time. Will either or both of the two main parties

genuinely commit to an objective Strategic Defence Review and then fund what is necessary

for Britain’s long-term security? Will they do this even if it means, as will almost certainly be the case,

that there must be a significant net increase in defence funding over and above any MoD efficiency savings

to make up for the serious neglect of the last twenty years? Only if this commitment can be given that

defence provision will be threat driven not budget driven, will our country be adequately defended. It

alone will preserve the Special Relationship and the cohesion of NATO, the vital twin pillars on which the

nation’s security has depended for sixty years. It alone will justify Britain’s retention of its permanent seat

at the United Nations where we have been a force for good since its inception. If the fundamental

question is not answered affirmatively by the next government then it is no exaggeration to say that

Britain’s future independence is at as severe hazard as in 1939-40. That is the relevant context for

determining Britain’s defence provision.

Britain is in the midst of the most serious economic crisis since World War II. Simultaneously it is facing

large and growing threats. The current defence provision is quite inadequate for present threats and

even more seriously inadequate for future threats (see below).

Britain is also, as the quotation on the cover stated, “…at war with a peacetime mentality.”

In this doubly grim situation the question has to be asked what, in the national interest, the Treasury

team should justifiably expect from the MoD team and vice versa – which this short paper attempts to

answer. Without doubt, the Treasury team should, indeed must require a lean, efficient, fit-for-purpose

MoD. One that can use every penny allocated to provide for the nation’s defence needs in as timely

and efficient a manner as possible. Sadly, this has not happened for a generation. As a result the

nation’s security has been seriously compromised, and Servicemen and women, according to

independent coroners’ findings have suffered, and continue to suffer significant avoidable deaths and

casualties. This is a national disgrace. This paper, drawing on the expertise of relevant senior retired

officers, outlines some of the most important, necessary, and indeed radical changes needed in the

MoD, and suggests how to accomplish them. Quite major savings and efficiency improvements are

achievable although the process will often be uncomfortable. The Treasury then is entitled to expect

a fully efficient MoD, but it is not entitled to choose defence priorities. That is a matter for the Prime

Minister and indeed the whole Cabinet informed by a fully objective strategic defence review. It will

be the next government’s most momentous decision.

A reformed, fully fit-for-purpose MoD is entitled to expect from the Prime Minister and the whole

Cabinet objectively determined defence priorities and an adequate budget to meet them. Setting these

priorities must involve acceptance that defence is not really about choice; it is about necessity. The

review must assess our country’s needs, not just pander to our political preferences. Those needs are

largely externally determined: the nation has no choice but to respond or to accept some very

unpleasant likely consequences. This is the proper context in which to conduct the defence review.

It is very different from the way defence reviews have long been conducted, but it is necessary to

preserve a free and independent Britain.

This report is in two main parts. First we consider the major scope for improved efficiencies in defence

provision. Second, we examine the main considerations which should govern defence provision.

The fundamental defence question in election year

11

The first shots in the forthcoming Strategic Defence Review were fired as long ago as last summer when

the IPPR Commission 10 offered a radical rethink on the strategic context and Britain’s place in it. According

to this commission there is a ‘black hole’ in the defence budget requiring cuts of up to £24 billion and, they

suggested, these cuts should be found by reducing conventional war-fighting capability:

“…forces that cover the full spectrum of conventional combat capabilities cannot be

maintained at currently planned scales…”

“…[we need] more targeted investment in the kinds of capabilities we are likely to need

in the less conventional conflict environment of the future.”

Projects called into question included the Future Carrier Programme at £3.9 billion, the F-35 Joint Strike

Fighter at up to £10 billion, the Type 45 Destroyer at a cost of £6.5 billion, the Astute class hunter-killer

submarines at over £3.7 billion. In addition, the Commission recommended early reductions in the

numbers of Challenger tanks, speedy reductions in the Tornado fleet, in anti-submarine warfare and UK

air defences. Henceforth, the UK would focus on operations like Afghanistan, reduce its dependence on

the US and would provide specialised forces as part of a more coherent European Union force.

Other commentators were not so sure. David Blagden in his Trench Gascoigne Prize Essay 11, disputed the

contention that the UK should no longer retain ‘balanced’ forces, arguing that the IPPR case rests upon three

assumptions: first, that the UK will (for the period under review) not face any threats from major powers;

second, that all future wars will be similar to the later stages of operations in Iraq and Afghanistan – that is

the counter-insurgency phase; and finally, that winning small wars is as important as winning big wars. He

goes on to point out that assuming that all future conflicts will be just like Afghanistan is “dangerous folly”,

that terrorists “simply do not constitute an outright existential threat in the way that the military forces of

other powers do” and that the “dangers of being proved wrong are very grave indeed”. As he said, to make

such a leap of faith “essentially represents a crystal ball claim to perfect knowledge of the future”. The

dangers of this are stark: none of the wars in which we have fought in the modern era (certainly since 1980)

have been predicted. Whimsically, Jeremy Warner reminded us recently of Niels Bohr’s comment:

“Prediction is always difficult, especially when it’s about the future.” 12

Warner went on to remind us that “most forecasting is mere extrapolation”; indeed, one of the most telling

arguments thrown at (old) generals is that they are “still fighting the last war”, since they, by implication,

haven’t moved on to the new realities of the new conflict. Britain, too, must guard against only fighting

the current insurgency, and must be prepared to meet the full range of whatever the future may hold.

Perhaps in this year of the Strategic Defence Review, the soundest advice remains the old adage

“Igitur qui desiderat pacem, praeparet bellum”

(Therefore, whoever desires peace should prepare for war). 13

Defence is like a health insurance policy, one designed to offset the consequences of unforeseen and

unpredictable events. We don’t know the disease, nor when it is going to occur but, as the Americans

are finding, without an NHS, you had better be insured! Like any insurance policy the cost of the

premium has to be balanced against potential risks to ensure value for money. And, just like an

insurance policy, there are some low grade risks we may be prepared to accept, whilst all the other

more devastating risks must all be covered.

The scope for improved efficiencies in defence provision

12

10 IPPR op cit.

11 ‘Strategic Thinking for the Age of Austerity’, David Blagden, RUSI Journal Dececember 2009.

12 Niels Bohr, the atomic physicist, quoted by Jeremy Warner, Daily Telegraph 2 January 2010.

13 Publius Flavius Vegetius Renatus in Epitoma rei militaris.

But, unlike an insurance policy, one that only pays out when the worst occurs, defence also has to

deter. Not just at the nuclear level, but conventionally as well. Forces-in-being – together with a

determination to use them – serve to discourage countless international opportunists who would

otherwise take their chances. Thus Britain’s Armed Forces also need to be seen to be strong enough

both in coalition and individually to provide an effective level of deterrence.

Clearly, counter-insurgency is not the only future challenge, and many of the dangers we actually face,

and are likely to face in the years and decades ahead, come equally from the sea and the air. Indeed,

even were we to withdraw from Afghanistan tomorrow, the threat to the UK from terrorism would be as

nothing compared with a major conflict against a peer competitor.

At the very least, Britain needs balanced forces with a wide spectrum of military capabilities. We have

to be able to meet a wide range of potential threats and challenges, including those to our NATO allies

to whom we are treaty bound. This means a sufficient, broad, tri-service capability to underpin both the

Special Relationship and the cohesion of NATO. These are the essential twin pillars on which Britain’s

defences have depended for sixty years, and will continue to depend. No-one knows which of the three

Armed Services, or which combination of them, will be required in a future emergency, or where and

when the emergency will arise.

It is true however that chronic underfunding and successive programme delays have created a huge

“bow wave” in the defence Equipment Programme with many of the large programme costs falling in

the same financial years. This has not been helped by project mismanagement. As Bernard Gray

pointed out 14 the average equipment programme overruns by five years and inflates by some 40%.

Cumulatively, this costs the defence budget up to £2.2 billion per year. The reasons for this predicament

are many, including frequent changes of minister 15, short-term project delays to balance the in-year

budget, too risky a technical specification and the lack of a Long-Term Costing (LTC) process.

Without doubt, the country should, indeed must, require a lean, efficient, fit-for-purpose MoD. One

that can use every penny allocated to provide for the nation’s defence needs in as timely and efficient

a manner as possible. Sadly, this has not happened for a generation. As a result the nation’s security

has been seriously compromised, and Servicemen and women have probably suffered, and continue

to suffer, significant avoidable deaths and casualties. This is a national disgrace. This paper, drawing

on wide expertise from industry, academe and senior retired officers, outlines some of the most

important, necessary, and indeed radical changes needed in the MoD, and suggests how to accomplish

them. Quite major savings and efficiency improvements may be achievable although the process will

often be uncomfortable.

1.1 Manpower

There are no significant economies to be made in manpower. At present the Armed Forces are at least 10%

under the strength required for even a small of conflict, with far too little time for recuperation, family life,

and retraining between operational tours. The Army, in particular, has never had enough troops in

Afghanistan to capture and hold the ground they temporarily take, and then have to retake, from the

Taleban. Hence there is little chance of giving the local population security, and no chance of building

schools, hospitals, etc., and creating jobs in a secure environment – all necessary for victory. Not only do

they have too few to accomplish the mission, they also suffer renewed and largely avoidable casualties

13

14 ‘Review of Acquisition for the Secretary of State for Defence’, an independent report by Bernard Gray October 2009.

15 2005-2009: Geoff Hoon, Des Browne, John Hutton and Bob Ainsworth.

1 The unpromising areas

when they repeatedly engage the enemy. The old military adage that “the more [troops] you use, the less

you lose” certainly applies in Afghanistan. Many more troops were needed as General Stanley McChrystal

made clear in his September strategic report, and thankfully, after three months of deliberation President

Obama agreed to deploy a further 30,000. Britain too increased its troop numbers from 8,500 to 9,500 and

increased its troop density by passing responsibility for at least a part of Helmand to the Americans. (In

contrast, the response of the major Continental European NATO member nations has thus far been

irresponsibly inadequate.) The allies are not fighting a lost cause in Afghanistan. But there is no such thing

as a cheap victory, as our politicians are finding out, and without sufficient troops we encourage our

adversaries, prolong the conflict, increase casualties, and ultimately, risk losing the war.

1.2 Pay

There are no economies to be made in pay for the Armed Forces. Pay is uncompetitive, especially for

the lowest ranks. This need for comparability is partly masked by the temporary surge in recruitment

fuelled by rising civilian unemployment. But the problems remain: in a recent survey the vast majority

considered the ‘X Factor’ – the additional pay to compensate for the rigours of Service life – woefully

inadequate. 16 Unless troops are adequately rewarded they will leave at the first opportunity,

necessitating expensive new recruitment and training. However, pay is not the most important

consideration in the rewards area. It is equally if not more important to improve accommodation,

(particularly married quarters), as well as medical and social support to Service people and their

families. Problems in these areas are entirely the result of false economies by the last Conservative

Government which sold off all quarters and destroyed Service Medical Services – particularly the

Services’ hospitals, so vital in war and so useful to local civilians in peace. Only a last minute limited

emergency arrangement with the TA and the NHS produced a casualty trauma capability such as we

see now operating successfully in Afghanistan and at two restricted centres at home.

1.3 Training budgets

There are no economies to be made in training budgets which have already been halved to the clear

detriment of all frontline Servicemen and women. They need to be restored to the appropriate level

to avoid unnecessary casualties, lost engagements and low morale.

The average soldier under training is restricted to a mere 50 rounds of ammunition a year the Territorial

Army – so vital to front line troop requirements – now get only 50 days training a year. Troop leaders

are presently discouraged from firing their tanks’ guns. Over 40% of the Parachute Regiment are now

overdue for jump training without which they are not allowed to jump. Their situation is worsening for

lack of training aircraft. And in August, the Treasury almost prevented a new training programme

designed to prepare all future army units being sent to Afghanistan for fighting the Taleban by haggling

over the £25m cost. Worse, in October 2009 the Chief of the General Staff (CGS) had to save £54 million;

according to some sources. If implemented, training in some areas would have virtually ceased:

“In addition to the £23 million reduction previously made in the in-year budget for TA

activity, savings of £20 million have been taken. As a result, activities not directly in

support of operations will stop or be severely curtailed. This will mean that TA soldiers

who have not been warned to go on operations will suspend all training until Apr 10.” 17

14

16 See ‘ARMED FORCES CONTINUOUS ATTITUDE SURVEYS’ 2008 dated 1 June 2009. - The majority of the 2008 AFCAS

respondents disagreed that the 14% X Factor compensated for Service lifestyle, working conditions and expectations,

although 24% of Officers and 15% of ORs did consider that it was sufficient compensation.

17 Serial No: 57-09 Source: CinC Date: 13 October 2009 Released by: PR(A).

However, wiser counsels eventually prevailed:

“The prime minister has abandoned plans to impose a £17.5m cut to the training budget

of the Territorial Army, saying it was the ‘right thing to do.’ The U-turn came after Gordon

Brown spoke to former defence secretary John Reid, amid calls from his own party to

intervene and reverse the cutbacks.” 18

The Chief of the General Staff (CGS) had had to complain publicly to avert this dangerous, absurdly shortsighted

attempted ‘economy’. This is precisely the type of expenditure which Treasury mandarins are

unqualified to judge.

1.4 Overall equipment quality

We discuss the lamentable procurement system in more detail below. However, there are few if any

economies to be made in the quantity and quality of military equipment for all three Services which in

many areas are already dangerously inadequate. Yet this is precisely where the IPPR axe would fall.

We still, for example have no stealth capability so, without a US shield, our air losses in any conflict

would soon prove unsustainable. This situation will not be rectified till 2018 with the procurement of

the F-35, specifically one of the systems that IPPR sees as unnecessary! Despite the Secretary of State’s

recent Afghanistan announcement 19 there will still be, for instance, far too few Unmanned Aerial

Vehicles (Reaper UAVs), and surveillance aircraft. The order for three new Nimrod MR A4 aircraft to

replace the ageing R1 versions was recently deferred indefinitely 20. Both are absolutely vital for the

reconnaissance of the Taleban now, and war-fighting elsewhere in the future.

Although the additional 22 Chinook purchase is to be strongly welcomed as is the additional C-17, why

could these not have been bought when the need arose, before casualty figures caused an outcry?

Moreover, although we also welcome the enhancements to IED detection and Husky provision etc, the

authors cannot agree that funding for the conflict in Afghanistan should be found from cuts elsewhere in

the core defence budget – as this government has done by delaying procurement, reducing training, and

cutting squadrons, ships and stations.

This is not to say that the planned equipment programme is beyond reproach – it is often unsuitable, too

costly, and arrives too late – see below. But, that the Armed Forces need more and better equipment to

do their job properly, and at minimum risk, is not in doubt. Public opinion is correctly contemptuous of

ministers’ pathetic efforts to provide more helicopters and more protected vehicles for Afghanistan. The

silent vigil at Wootton Basset is as much a criticism of government stinginess as it is a mark of noble

sacrifice. No politician should ignore this.

1.5 General comments

Procurement in defence is simple in principle but complex in achievement. This means that principles

and structure should be kept simple, and responsibility – and accountability – plainly identified. Defence

ministers should certainly keep up to date with equipment procurement projects, but once authorised

they should keep out of the way. If they do not, they add cost and reduce capability.

15

18 BBC NEWS http://news.bbc.co.uk/1/hi/uk_politics/8328980.stm 14:36 GMT, Wednesday, 28 October 2009.

19 1530, 16 Dec 09 SofS Announcement to House of Commons.

20 Cancellation of three of the new Nimrod MRA4 surveillance aircraft, that will replace the Nimrod MR2, to save £100m

see The Sunday Times 31 May 2009 ‘Spy-jet cuts put troops’ lives at risk’ by Michael Smith.

Sensible cuts are not readily to be found in the above four areas, but there three other areas where major

economies and significant efficiency improvements are achievable. As General Lord Guthrie recently opined:

“The obvious candidate is the bloated administration of the Ministry of Defence, which

lacks agility. Can we really afford a permanent joint headquarters as well as an MoD?

Since personnel make up a large slice of the budget, one has to question why we need

more than 86,000 civilian staff to direct 175,000 service men and women. It seems

extraordinary that this country employs 23,000 in defence equipment and support

(DE&S), yet it can take years to get even the most fundamental equipment into

commission, such as radios for the infantry.” 21

The areas to target are:

(i) major improvements in procurement;

(ii) major staff reductions in the MoD; and

(iii) the more efficient sourcing of equipment away from the EU to British and American

suppliers.

All three areas have recently (7th September 2009) been identified by Dr Liam Fox as priorities for the

next Conservative government, so our analysis and proposals may prove useful to whoever forms the

next government.

2.1 Procurement

2.1.1 The external evidence

A logical starting point for considering the compelling need to increase the standard of procurement at

the MoD is the spending review by Bernard Gray 22. He is a respected Labour defence adviser much

praised for his contribution to the 1998 Strategic Defence Review (SDR 98). His later report was

commissioned by the former Secretary of State for Defence, John Hutton, and was completed in July

2009. Its publication was suppressed in early August but a version of it was then leaked. It was so

highly critical of procurement procedures in the last 12 years that ministers, and perhaps senior MoD

civil servants, wanted it kept under wraps. It seemingly rebutted government claims that had blamed

cost overruns and mistakes mainly on previous Conservative governments. It revealed alarming

incompetence on long-term procurement projects, which the report’s author stated was “…harming our

ability …to conduct difficult operations.” This is fully borne out by the known facts, the ships and

planes which are years, sometimes well over ten or fifteen years, behind schedule; the tanks which

cannot cope with sand (this in a nation whose World War II tanks were so successful in the Western

deserts 65 years ago!); and helicopters that cannot fly at night! The Gray audit reveals that current

defence projects are an unfunded £35bn over budget and arrive five years late. The report questions

why it takes 20 years to buy a tank, a ship or an aircraft, costing twice as much as forecast and which

seldom meet specifications. Further, there has been a forecast £95bn rise in defence procurement over

the next 30 years from £140bn in 2005 to £235bn by 2009 – and who can say that is the end of it?

Clearly there is something fundamentally flawed in the procurement process. While the situation has

worsened under a Labour government, it was not acceptably efficient under earlier Conservative

administrations. The time for major reform is long overdue.

2 The promising areas

16

21 ‘Where Britain should cut to defend the realm’, by Gen Lord Guthrie, The Financial Times 28 July 2009 17:39.

22 ‘Review of Acquisition for the Secretary of State for Defence’, op cit.

Some ten days later in August after the Gray report was leaked there was some more embarrassing news.

The National Audit Office (NAO) refused to approve the MoD’s accounts because some £6.6bn of

equipment could not be traced – the equivalent of the entire annual equipment budget. This comprised

£1.25bn of encrypted radios, machine guns, body armour and night vision goggles, and over £5bn of

spare parts and raw materials. Clearly, personnel in frontline operations could not be expected to keep

records to normal peacetime standards; budget constraints had forced the abandonment of plans to

upgrade Information Technology systems; and there were too few operational troops to be spared to

keep the complex registers. But it is symptomatic of a peacetime Service. Earlier Conservative

governments deliberately cut the costs of accounting. If a commanding officer cannot be certain that

every soldier has what he should have he is severely handicapped in delivering his role.

A further deeply worrying, indeed scandalous, example of MoD procurement inefficiency was highlighted

in late August – the sorry 15 year saga of the bungled Chinook helicopter project. It was described by

Edward Leigh, Conservative Chairman of the Public Accounts Committee (PAC), as “…one of the most

incompetent procurements of all time.” In 1995 the MoD ordered fourteen Chinook helicopters from

Boeing, six Mk2As and eight modified ones, the Mk3s, as dedicated support aircraft for Special Forces.

These eight helicopters, whose initial cost was £259m, were delivered by Boeing in 2001. They were not

capable of entering service because of a foolish MoD decision to economise on the Boeing £40m software

costs by designing the software in the MoD. The MoD, however, were not able to design appropriate

software and without it the helicopters could not be flown in difficult conditions. They have been stored

in climate controlled hangars ever since, even though urgently needed for frontline service. In 2004 the

MoD re-opened negotiations with Boeing which took 21/2 years at a now highly inflated cost of £215m, so

the scheme was abandoned in 2007. Instead Boeing was asked to convert the aircraft to a basic transport

utility model at a further cost of £90m – for duty in Afghanistan. In Dec 09 the first of the eight helicopters

was delivered, nine years late at a total cost approaching £500m. This is a classic example of MoD waste:

false early savings yielding far greater costs later. Lack of these vital aircraft has almost certainly cost lives

and casualties to frontline troops, the worst aspect of a deplorable story.

The situation in the MoD procurement division was almost certainly damaged by the seven year lack of

supply training between 1993 and 2000. But the present situation has come about at least partly because

the Government keeps on insisting on “Rolls-Royce” gold-plated mega-systems for IT and

communications, often bigger and more comprehensive than is safely possible, perhaps even needed.

When they are too big, none will admit this above the working level, certainly not the MoD sponsor nor

the contractor both of whom spend much time persuading each other that perfection lurks just over the

next hill and all they have to do is to keep at it! This sounds better and pays better than recommending

cancellation, etc. This is an unacceptable situation in obvious need of major reform.

2.1.2 Mismanagement

A management principle beloved of business schools is that the more you cut, the more you improve

efficiency. In reality, the reverse is often true. In defence, since there is no measurement of output, a

cut in one area often cascades throughout the operation with unforeseen negative consequences. Sadly,

ill-considered cuts have been a hallmark of this administration and its Conservative predecessor with

inevitable long-term operational consequences.

The business of the MoD is to deliver policy, and then to supervise the adequate and timely defence

provision to meet agreed threats. This should primarily be the responsibility of the Defence Chiefs and

their military staffs.

The proper roles of politicians, civil servants, and military personnel have become unacceptably blurred.

Every time politicians or the civil service interfere they relieve the military of both the ability and the

responsibility to manage. The end result is the mess and confusion so well identified in the Gray Report.

A further interference to be addressed is the over-pervasive involvement of Treasury staff in the work

17

of MoD. At every level they second guess civil servants and military staff producing frustration changes

and confusion. There has to be proper financial control in the MoD, as in any government department.

But it needs to be internal, militarily competent, informed, financial control. The MoD needs to return

to having its own financial control staff not alien staff whose loyalty is owed elsewhere, who lack

military expertise and who are not committed to the MoD’s aims. The Treasury has a right to be

involved, but at Cabinet level when department budgets are being agreed. Equally, No 10-directed

public relations staff embedded in the MoD should be removed. The MoD should, under its Secretary

of State, revert to having direct responsibility for all of its own external public relations.

The result is that the level of effectiveness of the whole MoD organisation is unacceptably low. Not only

does it fail to deliver necessary equipment, ships and aircraft on time, of acceptable quality and with value

for money, but it is also losing the confidence of the Armed Forces. There are two major contributing

factors at work: ‘short-termism’; and a ‘not fit for purpose’ organisation.

• Short-termism Inadequate basic funding to meet even presently agreed military tasks

makes the already difficult procurement responsibilities of the MoD almost impossible. In

mid-December the National Audit Office (NAO) 23 reported that

“The Ministry of Defence has a multi-billion pound budgetary black hole which it

is trying to fix with a ‘save now, pay later’ approach.”

Britain will face a ‘black hole’ of £36bn over the next ten years unless there is an increase

in the defence budget. And this situation has just been made even worse by the Secretary

of State’s mid-December announcement to boost funding for Afghanistan at the expense

of the core budget.

“As Bob Ainsworth, the Defence Secretary, prepares to announce cuts in manpower

and equipment totalling £1.5 billion to try to keep within existing budget limits, the

NAO says that Ministry of Defence procurement is bankrupt.” 24

To give Afghanistan more of what it has long needed – 75 out of 100 deaths in Helmand

Province in 2009 are from roadside bombs – cuts are imposed elsewhere, in the most recent

case mainly on the RAF, regardless of the consequences. Yet one of the cuts in 2009 was

to Nimrod surveillance aircraft which are essential for a high-tech war and also for

monitoring Taliban activity. Their withdrawal will inevitably ultimately cost further lives and

casualties. Where is the sense in that? Although it is true that there has been considerable

funding for operations from Treasury central funds, 25 for at least the last two years, much of

it has come from cutting back elsewhere in the defence budget - quite regardless of the

longer term risks to national security. Sadly, this reflects a prevalent attitude of recent

ministers that tomorrow’s difficulties will be someone else’s problem!

On the grounds of ‘Need to Know’ the implications of these cutbacks are never disclosed

and cannot be properly analysed. Yet the MoD is always forced to rob Peter to pay Paul,

but now Peter and Paul are both destitute and can no longer function effectively. Never is

it thought appropriate on national security grounds to give extra funding as offering

excellent value for money. In the context of a £1,500 billion national income an extra

£3.6bn needed in each of the next ten years is eminently affordable and fully justified from

a national security prospective.

18

23 Report by the Comptroller and Auditor General HC 85-ISesSIon 2009–2010 15 December 2009.

24 Michael Evans, The Times, 15 December 09.

25 As the Chancellor set out in the Pre-Budget Report, by the end of 2009-10 the Reserve will have contributed over

£14bn to operations in Iraq and Afghanistan.

The NAO annual report highlights many other shortsighted attempts to save money by

postponing expenditures which in the end cost far more. This leaves significant defence

gaps in future years risking serious adverse consequences. The postponement of the

much needed two modern aircraft carriers adds hugely to the cost of completion:

“The NAO highlights what it says have been short-sighted attempts to save money.

It considers the case of the Royal Navy’s proposed two 64,000-tonne aircraft carriers

— HMS Queen Elizabeth and HMS Prince of Wales — estimated to cost £3.9 billion.

“Because of the huge cost of the programme and the burden that it placed on the

MoD’s budget over the next few years, last year John Hutton, then the Defence

Secretary, announced that the project would be delayed.

“The short-term savings will be lost over time, however, and the delay will add

another £1.1 billion to the final cost of the programme — a net increase of £674

million. The lives of existing Invincible Class aircraft carriers will have to be

extended at an additional cost of £123 million.” 26

Similarly, slowing down the production of all but the first of seven Astute submarines

saves £139m in the short term but results in a net increase of £400m in the long term. The

MoD saved £194m by cutting the number of Lynx helicopters from 80 to 62 and reducing

planned flying hours by a third – again regardless of defence needs. Britain’s Type 45

destroyers cost an unbelievable £1bn each, are at least 3 years late, but as the early ships

are launched they will have to go to sea without their vital Sea Viper air defence missiles.

This necessitates continuing the five ageing Type 42 destroyers at an estimated cost of

nearly £200m.

This is an ‘Alice in Wonderland’ world where ill-judged short-term cuts result in the MoD

paying far more for ever less! As the NAO summed up so well:

“In 2008-09, costs on the 15 major defence projects examined by the NAO increased

by £1.2 billion, with two thirds of this increase (£733 million) directly due to the

decision to slow projects.” 27

This is public money entirely wasted: Defence money voted by Parliament for the future

security of the nation just thrown away. The Government should be ashamed of itself.

• Not fit for purpose The same criticism applies to the ‘not fit for purpose’ MoD organisation.

The fault lies not with the civil servants and military officers who do their best in a confused

situation where ultimate responsibility is hard to identify. Rather the fault – the responsibility

of politicians – is a flawed organisation system with multi and often conflicting priorities –

providing pleasing headlines, creating jobs, satisfying political allies, particularly in joint

projects shared with other mainly EU nations instead of a single-minded concentration on a

timely, efficient and cost effective defence provision.

Any effective business organisation concerned with delivering complicated and risky major

projects – a key responsibility of the MoD – has three clear characteristics:

(i) firm, knowledgeable, long-term leadership laying down achievable long-term goals;

(ii) a staff with the freedom, competence and encouragement to challenge and test

all policies and projects to ensure the optimum outcome; and

19

26 Michael Evans, ibid.

27 NAO op cit.

(iii) a single-minded focus throughout the organisation on the agreed aim [which for the MoD

should be the maximum, achievable, value-for-money national security and defence against

actual and possible serious threats identified by an objective ‘Strategic Defence Review’].

The MoD, as presently organised, does not meet any of these criteria. Secretaries of

Defence over the last 12 years have been changed far too frequently, most of them lacking

both relevant experience and seniority. Nor have they achieved an optimum, well

researched, long-term policy. Defence is too important to the national life for it to be a

parking spot for those to whom the Prime Minister owes a favour. The need is to get back

to having one experienced and determined person in charge for a full government term.

Chiefs of Staff need equal and overlapping tenure. The minister in charge of procurement

needs the tenacity and single-minded drive shown by Lord Beaverbrook in World War II

as Minister for Aircraft Production who made a major contribution to the timely provision

of Hurricanes and Spitfires in 1940 and thereafter for bombers.

MoD staff should have the competence and freedom to challenge and accomplish

changes, a vital freedom seemingly absent at present from the MoD where criticism and

dissent are discouraged. Moreover, there is often a lack of harmony. Military officers are

not allowed to wear uniform, thereby ensuring all advice is valued as equal. More

fundamentally, there is a difference in loyalties: civil servants work only for the minister

of the day; while military officers see their loyalty to Queen and country. Even external

checks are weak. The Audit Commission seldom audits projects in advance – only too

late at the post-mortem stage. Misguided policies, interminable and costly changes,

delays, waste, etc. are the inevitable result, with no alleviation in sight.

Finally, the clear commitment to a simple, effective, achievable, long-term strategy is

missing. The American military are committed to regular four year Strategic Defence

Reviews (Quadrennial Defence Reviews – QDR). In Britain Defence Reviews tend to

occur only with long – 10 to 12 year – intervals, are often dangerously politically

motivated, and are all usually out-of-date within a few years.

Across the board, there also needs to be a sense of urgency throughout the MoD – without which major

delays occur, security is impaired, and unnecessary casualties result. This means specifying equipment

carefully and thoroughly in advance, and resisting all attempts at significant and costly changes which

result in the dangerous delays. Over-specification and frequent subsequent change are the curse of our

military procurement. The guiding principle should be that laid down by Vice Admiral Sir Jeremy Blackham,

with long experience of the Royal Navy, Tri-service strategy and the MoD –

“You do not need to overmatch technology; you need to overmatch your probable enemy.” 3

Finally, the MoD should be very wary of joining multi-national collaborative ventures which are at the mercy

of every nation involved. Such ventures are subject to endless changes of specification, cost overrun and

serious delays. The long delayed A400M transport aircraft is a classic exampleReference 3. The urgent need in

1999 for 25 transport aircraft led MoD staff to recommend the available well-regarded American C17. The

government overruled this recommendation in favour of an eight (sic!) nation EU collaborative venture with

the multi-national Airbus – a company which had no experience of military planes. It also had heavy

competing demands on its engineering teams for its more important civil A380 and A350 Airbuses. Delivery

was due 10 years later – in itself a most serious delay especially as C17s could have been bought off the

shelf. To bridge the gap, the UK then leased C17s then after using half their life, purchased them at full

cost, – and has now bought yet another one! The A400M prototype has finally just flown but the first aircraft

will still not be delivered for at least a further few years. The need to promote UK jobs and show solidarity

with the EU overrode the most urgent need for reliable military transport aircraft. We have effectively paid

twice for the C17s and will now pay once more for the A400s. This is not defence expenditure; it is

industrial support for a European ideal.

20

In defence of the MoD Civil Servants it is important to note that their advice is often overridden by

politicians for political rather than military reasons (e.g. Typhoon, A400M, etc.). It has been politicians

who have demanded that we do everything in concert with other European nations giving each of them

a share of the contract – as opposed to buying from UK manufacturers (while we have them) or off

the shelf from the US. The choice here is as fundamental as the continuance of this country as a

secure nation state – which is presently in doubt – and can only be tackled politically.

2.2 Major staff changes and reductions

The MoD staff level fell by 23,000 (21%) from 109,000 in 2005 to just under 86,000 today. But with 180,000

members of the Armed Forces there is still one Civil Servant for every two servicemen, compared to one in

five in France. Unsurprisingly, this is regarded as excessive by most experts, particularly as the Department

has a poor reputation for efficiency. Both the Liberal Democrats and the Conservatives have promised major

cuts, as indeed has the present Armed Forces Minister, Bill Rammell wherever it can be done “…without

putting troops at risk.” It may, however, prove very difficult to achieve major staff reductions because of

Civil Service contracts and protocol, and the power of public sector unions. Nevertheless, any serious

incoming government must achieve major cuts wherever efficiency and the implementation of major policy

changes are involved. The present inadequate MoD is thus one of the prime candidates.

Staff numbers need to be cut for many reasons, to redirect resources to front line troops, to eliminate

proven inadequate or unfit staff, and to make room for recruiting necessary highly qualified staff,

particularly in the procurement section with its already large 28,000 establishment. This last requirement

is crucial. Hard business expertise is required to be injected to speed up and to raise the quality of

procurement across the board. Certainly, there is also a strong case for recruiting ex-Service high fliers

with past MoD experience. This could be expensive as most of them are in well-paid industrial jobs.

Even so, their scarce expertise would justify the likely cost. There is also a strong case to be made for

short-term appointments of high calibre civil servants with a proven MoD track record in earlier years.

The best person for the job must be the inviolable requirement. One litmus test of suitability for all staff

must be that they are open to challenges or criticism. All attempts to suppress critical reports such as

Bernard Gray’s must end. The MoD must have the confidence to learn from its mistakes.

By these methods major resources could be freed and efficiency levels raised significantly. The Treasury

is entitled to expect this, and so too are the Armed Forces whose confidence in the MoD has declined.

2.3 Equipment sourcing criteria

The key determinant in equipment sourcing must be to get sufficiently suitable equipment into service

with dispatch and at reasonable cost. This generally means seeking adequacy and reliability rather than

over-complicated higher technology which usually ends up costing far more, and, worse still, being

seriously delayed. This costs lives and military success.

In judging whether the above criteria can be met great attention must be given to the nationality of the

supplier and their reliability should Britain ever follow a military policy of which that government might

not approve. In both the Falkland War and the first Gulf War several disapproving European suppliers

failed to honour their contracts. That risk should normally be unacceptable. Further, as the examples

given above show, there are very considerable extra risks in contracting with multi-national collaborative

ventures whose reliability record is generally poor. (Properly supervised supply contracts usually work

best where the contractor is UK-based.) It is usually far more cost-effective to contract with particular

single or two-nation companies. Reliance on British or American companies with their better records is

generally a preferable strategy as long as such contracts are neither automatic nor on soft terms. A

reliable indigenous defence industry for the majority of MoD needs is generally sensible. And when

contracting with American suppliers with their deservedly higher reputations for quality and reliability,

21

the MoD must have regard to software availability and lifetime costs including spares, maintenance,

service, etc. Lower capital costs may be combined with excessive life of contract costs. But all MoD

contracts must be taken primarily on military grounds, not indigenous job creation or pleasing EU or

American allies. Anything else means that the Defence budget is being misapplied.

By all these methods the cost of MoD contracts and their reliability can be greatly enhanced. But it

will require tough, competent, long-term leadership of the type – see above – provided in their time

by Winston Churchill and Lord Beaverbrook.

22

This third section of the paper has been fairly comprehensively covered in our recent UKNDA report,

‘A Compelling Necessity’ Reference 2 to which cross-reference is made. In the second section we have set out

how the MoD can be made far more efficient and fitter for the vital service it performs for the nation.

Even if there were no economic crisis or massive shortfall in public sector finances, all the

changes set out would still be highly desirable. The MoD cannot discharge its vital national

responsibilities without becoming fully efficient and regaining the confidence of the Armed Forces, the

clear responsibility of the incoming ministerial team.

The considerations which should govern defence provision

3.1 Defence provision must be threat-driven not budget-driven

Defence provision, just like policing, is different from nearly all other types of government expenditure

because it provides the security within which to guarantee the safe delivery of all the other services,

health, education, welfare, etc. Without adequate defence no other functions can be safely delivered.

It is thus equally vital to parties of the right or left. Without it there is no freedom- freedom from

interference, freedom from coercion, by our enemies.

Adequate funding of national security through the defence of the realm is the accepted first duty of any

government. But, sadly, threats do not conform to neat checklists or run to timetables. Nearly all the

wars in which Britain has engaged for the past century and more have come as surprises. Threat levels

can alter at very short notice. Thus a responsible government must, at all times, be prepared for the

unpredicted: it must have the reserve military capacity to meet contingencies; and have the resolution

to confront the unexpected. The time that Britain is likely to be placed in most danger is precisely when

we are financially and hence militarily weakest. The moment when we most need to be ready to meet

threats is when we are facing economic meltdown especially if we are already committed to a major

conflict that is not going too well. The most recent decades of British history when our economic

position was at its direst – that is, the 1930s and early 1980s – were precisely the ones when humiliations

were heaped upon us internationally, and that is no coincidence. The best chance of avoiding conflict

is to be so well prepared that opponents are deterred rather than encouraged. Effective deterrence

prevents wars and thus avoids the severe cost of conflict. That is the best value defence policy of all.

3 Why defence provision is so different to most public

sector responsibilities

23

3.2 The main threats facing Britain

No satisfactory or realistic assessment of an adequate defence budget for Britain is possible without

considering the short, medium and long-term threats. As we have said, many of the threats which do

arise are unforeseeable. This is why adequate defence requires a large, integrated and flexible triservice

contingency defence capability, one which, as Iraq and Afghanistan have demonstrated so

tragically, Britain has lacked for many years. No-one can foresee which Services or combination of

Services will be needed for any emergency. To cut the defence budget to the point where there is interservice

fighting over who gets what is a clear indication of failure to recognise the potentially wideranging

dangers to Britain’s security. It ignores the long lead time to design and build appropriate

ships, aircraft and high tech equipment, and to recruit and train Servicemen and women to use them.

Nor is the defence budget suited to rapid changes. Short-term fluctuation always causes higher costs

in the long-run (see NAO 2009 Report above), and potentially an irreversible serious credibility gap.

A major cut now may expose Britain to a serious threat five, ten or twenty years hence. No government

has the right to jeopardise the long-term future defence of the realm for short-term budgetary

considerations which our enemies and allies will see as a sign of weakness. And, given what in the

national context are relatively small extra sums needed for adequate defence – see below – short-term

cuts are bad economics and make worse history.

These threats are set out in compelling detail in the 5-page Section 4 of our earlier report, and have also

been convincingly detailed by Dr Liam Fox in recent articles and speeches. He has demonstrated that the

threats are large and growing, that the world is already dangerous, and getting more dangerous. We agree.

Thankfully, Iraq has made major progress towards peace and stability but is not immune to succumbing

again to insurgency, much of it provoked from beyond its borders. Iran, on the other hand, is thought

to be within a year or two of a nuclear capability. It has missiles which can reach Israel, the Suez

Canal, and most of the Middle East – and it has threatened to bomb Israel, and if provoked, to try to

close the Persian Gulf to oil tankers. A nuclear Iran would incite a nuclear Middle East arms race. It

is a prospect no Israeli government could tolerate, but any attack on Iran would be sure to ignite the

entire region. Israel and Palestine are far from peace and the independence of Lebanon is continually

threatened by Hezbollah strongly backed by Iran and Syria.

Afghanistan and Pakistan remain very threatening linked challenges and threats, but with shared problems

of insurgency, terrorism, violent extremism and the drugs trade. The conflict in Afghanistan will simmer

on for years unless NATO takes determined action. We cannot allow the US Administration to do a

‘Vietnam’ in Afghanistan, i.e. withdraw before the job is finished. Then, with Cold War forces providing

strategic balance, the situation was stable; now we would just create a strategic vacuum into which hostile

powers would move with some alacrity. This in turn would de-stabilise Pakistan, perhaps with the result

that a nuclear capability would fall into the hands of terrorists threatening or destroying whole cities.

We cannot allow this region to collapse or become a base for exporting terrorism to British streets.

A further contingent threat is a resurgent Russia with its pressure on Georgia, the Ukraine, and the oil

and gas routes through them, and even on the NATO member Baltic states. It has announced that from

2011 onwards there is to be a major upgrading of all the armed forces including six aircraft carriers, eight

nuclear ballistic missile submarines and many more maritime aircraft. This may be beyond the current

resources of a hydro-carbon dependent economy with a relatively low living standard and poor industrial

efficiency, but it cannot be ignored. It threatens Britain’s interests abroad and those of our allies.

An additional emerging threat is an increasingly bellicose nuclear armed North Korea with implications

for our allies in the Five Power Defence Arrangement. While not a direct threat to Britain, it may well

divert American military resources from the Middle East, which makes Britain’s capabilities of even

greater relative importance.

Early in 2009 the Government withdrew our last warship from the Falkland Islands despite Argentina

continuing to demand sovereignty over the islands. The British owned territories contain, on the

Continental Shelf, rich hydrocarbon reserves of potentially great importance to a Britain increasingly

dependent on enormous oil and gas imports. But, if we are honest, we now lack the 1982 expeditionary

capability to defend them, and have done for many years.

Finally, Britain is more dependent on its large global seaborne trade than any other nation which, for

the first time in our history, we now cannot properly protect with the Royal Navy’s much reduced fleet.

We are even hostage to Third-World Somali pirates, and shipping companies now have to hire their

own gunboats for protection.

3.3 The required broad capabilities to meet the threats

The required broad capabilities of the three services cannot sensibly be covered in this short paper. They

are covered fairly fully in Section 5 (ten pages) of UKNDA’s July report, ‘A Compelling Necessity’ Reference 2.

What follows are a few highlights which should figure prominently in a long-needed Strategic Review

promised by all three main political parties.

In judging the necessary requirements of all three Armed Services it must be remembered that for the past

12 years – uniquely among the major government departments – the MoD received virtually no increase

in its budget in real terms, i.e. what that budget could buy. This is because the cost of equipment

increased 6% to 8% a year, far in excess of general inflation. Hence the Services were starved of necessary

resources while having five unforeseen wars to fight. So the starting point for considering general cuts

across the public sector needs to allow for the fact that the scope for defence cuts – apart from the

realisable major procurement improvements detailed above – is small to non-existent. Britain could of

course abandon its historic roles of protecting its global interests, and its major commitment to global

peace and security but this would be at a terrible price to defence of the realm. No other nation or alliance

would be obliged to protect our interests, and the many and growing threats outlined above will remain.

3.4 The Army

The plight of the Army, particularly in Afghanistan, has deservedly received so much media coverage in

recent months that its broad needs are well known, and evidenced by the 24th September resignation of

Major General Andrew Mackay because of the lack of resources in Afghanistan. We have too few troops

to fight and hold the ground captured, and more avoidable casualties occur every time it is recaptured.

The NATO Commander, the American General Stanley McChrystal, called for at least 30,000 more allied

troops, a request President Obama eventually agreed. Britain will provide an additional 1,500 troops to

maintain our Special Relationship with America and to keep the pressure on EU members of NATO to

do more. Dr Liam Fox has (20th September) indicated a Conservative Government would send more

troops to match American requests, stating that “Failure is not an option.”

The Army overall needs a minimum 10% (10,000 Servicemen) increase to allow for operational demands,

adequate training, and sufficient respite from too often repeated operational tours. That more and better

equipment is needed is obvious to the whole nation plus an adequate training budget and better pay

for the lower ranks. Last, but not least, decent housing and hospital facilities are needed for Servicemen

and their families – something which applies equally to the other two services. None of the above

expenditures are avoidable short of reneging on our commitments including our commitments to

servicemen and their families and abandoning the proper defence of the realm. But some of these can

be funded from a more efficient MoD.

24

3.5 The Royal Air Force

Britain has been, and is very likely to continue to be, involved in conflicts just about anywhere in the

world, and as part of the NATO Alliance we guarantee to defend all member states, not just the

coastline of Britain. In the fast-changing world of the future, the RAF has to be able to respond swiftly

and efficiently to new challenges wherever Britain’s interests are threatened. In any potential theatre

the RAF would be a vital element in the full spectrum of operations.

Sadly, many of the recent cuts to fund the much-needed improvements in Afghanistan have been found

from the daily running budget of the RAF. Several ground-attack squadrons have been or are about to

be withdrawn.28

“…reduce now the size of our Harrier fast jet force by one squadron (but maintaining

our joint carrier-based combat air capability), close RAF Cottesmore and consolidate the

Harrier force at RAF Wittering. We plan to reduce our Tornado and Harrier force by a

further 1 or 2 squadrons…”

“…intend to draw down the Nimrod MR2 force some 12 months early and have also

taken the decision consciously to slow the rate of introduction of the MRA4 force…”

The RAF still fields an ageing and expensive fleet, many of which are legacy aircraft from the Cold War

and several are 20 years old or more. From a Cold War complement of 93,000 men and women there

will soon be fewer than 40,000. Combat aircraft numbers are down by more than half. The severe and

continued government underfunding since 1991 makes many of the RAF’s capabilities either just token

or unachievable.

It takes 15 years or more to design, build and introduce a modern combat aircraft with a service life

of approximately 30 years. All the wars since 1945 arrived with little warning, and we must assume

that in future conflicts there will to be no time to build more aircraft and no time to train a new

generation of crews. This means that whatever the RAF is called upon to do, it will go with the forces

in being. Currently, these forces conceal a number of weaknesses.

The Royal Air Force was born from the air attacks on London in 1917. Defending our skies is a sine

qua non, not only over the UK, but in any theatres that British Forces operate. Though we now have

the Typhoon in the fighter role, technologically we are slipping behind: the US already has the F-22, a

5th-generation stealthy fighter and, on 29 Jan 2010, the Russians flew the T-50, their first 5th-generation

aircraft. China is known to be following suit and other nations in turn are seeking to acquire 5thgeneration

aircraft. These aircraft will change the face of the air battle. Without Air Superiority all other

operations become difficult, if not impossible. Witness the plight of the Wehrmacht in 1944/45, and

even the Royal Navy in the Falklands in 1982. Just imagine, for example, how different ISAF operations

in Helmand might be if Iran took control of the skies.

In Afghanistan, the RAF is as much a part of the conflict as the Army - not just in the obvious roles of

air transport (both heavy and rotary), but also in intelligence gathering, radar surveillance of the

ground, in UAV operations against Taleban/Al Qaida forces and finally, in the impact of air warnings

and the delivery of weapons. Air Power substitutes for many thousands of ground forces, and without

the RAF’s vital contribution costs would rise and troop levels would have to at least treble.

Operations in the Middle East, and in remote locations such as the Falklands, stretch the remaining RAF

establishment. With only eight ageing operational Tornado fighters to defend our northern skies the

new Typhoon is essential for our air defences both in Europe and beyond. With the multi-role

(Tranche 2 and 3) aircraft now ordered, this aircraft will also be able to switch from Air Defence one

day to ground attack the next, providing the flexibility that is so cost-effective. Though Typhoon is at

25

28 SofS op cit.

last being deployed in numbers, the future of the Harrier and the Tornado bomber forces are now in

question, but their replacement, the JSF F-35, carrier-capable aircraft, remains unfunded and (in the

variant we have decided upon) very short-range. However, until the JSF’s arrival (in 2018?), the RAF

will lack any 5th-generation Stealth capability so essential to suppress and destroy enemy air defences;

without that capability even the Typhoon would prove highly vulnerable. If we are to retain an

effective air capability on a modern battlefield it is essential for this JSF procurement to go ahead.

On the helicopter front there has, at last, been a ray of hope: 22 new Chinooks were ordered in Dec

09 to bolster the fleet and make up for battle losses. Despite the recent deployment of the moribund

eight Chinooks (see above), until 2012 – when the first of the 22 new Chinooks might arrive – we will

continue to have far too few helicopters to defend and transport our troops in Afghanistan. While the

recent announcement also stated an intention to procure additional Reaper UAVs, 29 we wait to see if

sufficient have been procured to meet the threats.

Conversely, seventy years after the ‘Battle of the Atlantic’ began, our maritime patrol forces face a

perilous future. The decision was taken in previous years to reduce the Nimrod MRA4 order from 21 to

just nine aircraft, leaving the UK with barely a token capability for controlling the sea lanes. Moreover,

a decision on replacing the R1 Intelligence version of this aircraft has been ‘delayed indefinitely’, leaving

a permanent gap in our capability, a capability equally vital right across the board – in all future

operations, both high-tech and low.

Last year we argued that we desperately needed far more and newer transport aircraft. Much of the

existing fleet is 30 years old, expensive to maintain and ecologically unsound. Although the A-400M

has at last flown, with A400M30 deliveries postponed for probably another 3-5 years or more, there

remains a strong case to cancel that troubled contract and switch to the much cheaper, more capable

and available C-17s and C130-Js. Fortunately some of our words have been heeded – at least in part –

and an additional C-17 is to be procured.

Though the Royal Air Force can just manage to meet its current operational commitments, it is so rundown

in numbers and capability that, were there to be a conventional war in Europe, it would be unable

to meet any war-fighting commitments by a wide margin. It will be for the SDR to establish the

minimum force levels necessary for current operations and then to show how that force might be

quickly ‘ramped-up’ should more strategic threats begin to materialise. In sum, the RAF remains underresourced

both for the responsibilities it is already undertaking and, more importantly for the many tasks

it may be called to undertake in future; the SDR must address this deficit.

3.6 The Royal Navy

The resources of the Royal Navy are inadequate for its present responsibilities as its fleet ages and more

and more ships are at the end of their useful life. Britain’s national defence has to address strategic risks

as well as tactical threats or it fails at both. The true relationship between such risks must be the prime

focus of the incoming government’s total needs defence review. Of no Service is this more true than

the Navy. It is fashionable among some pundits and politicians to question the need for two new aircraft

carriers and their attendant planes, helicopters and defensive escorts on the grounds that in future Britain

needs to be prepared only for counter-insurgency operations. But how could an expeditionary army

function without Fleet Air Arm cover which has been provided for every British operation since World

War II (Vice Admiral Sir Jeremy Blackham)? Will we never want to defend the Falkland Islands again?

In considering the future needs for aircraft carrier groups it is worth reflecting on the capability of such

groups. With six escorts of modern Type 45 destroyers and frigates, a nuclear attack submarine, and

26

29 SofS 15 Dec 09 op cit.

30 Latest estimates – now costing at least £100m each.

the facility to carry a combination of fighters, fighter bombers, helicopters and marines, they can project

formidable power far from these shores. They seek absolute sea and air control of a bubble of space

of a 600 mile radius, 100,000 feet above and 3,000 feet below the sea surface. Coupled with an

amphibian tank force it can control land 50 miles inland from the coast – and this without a land airfield

or a harbour. In most situations the Army cannot project its power far without naval and air

support. And if the potential enemy, to be deterred or engaged, had air power (e.g. Iran) then a carrier

group would be mandatory. Finally, if such a carrier group were also required as a show of force to

back up a major diplomatic initiative - an important requirement to which Dr Liam Fox frequently

draws to the public attention – then there is no adequate substitute.

Finally, a brief word on the Trident submarine-based replacement nuclear deterrent. Both of the main

political parties support the project which is forecast to cost £20bn from 2010 to 2025. The Non-

Proliferation Treaty (NPT) is due for re-negotiation next year, but it is difficult to be optimistic that the

results will increase global security. In an increasingly dangerous world, with an unstable Iran on the

threshold of nuclear weapons and the consequent likely resultant nuclear arms race in the Middle East

(Egypt, Saudi Arabia, Turkey, etc.), and the Islamic insurgency threat to nuclear armed Pakistan, no good

argument for giving up Britain’s nuclear deterrent exists. Instead, the idea is being floated by Gordon

Brown, with highly qualified Conservative support, of offering to cut the Trident replacement fleet from

four to three nuclear submarines. If the offer is meant to be a realistic offer to reduce global nuclear

stockpiles it is either meaningless or dangerous. If, as claimed, the proposed reduction does not

compromise the effectiveness of Britain’s independent nuclear deterrent, it is meaningless, particularly as

the present complement of 160 missiles is to be retained. If, however, this even slightly increases the

risk of not always having one Trident submarine on undetectable deep sea patrol then it will endanger

Britain’s security long after Mr Brown has retired. A credible deterrent depends on absolute long-term

certainty – every day of every year for thirty plus years. One submarine is always on patrol, its

predecessor is refitting and the crew, rested, a third is training and preparing for patrol, and the fourth is

in reserve in case any delays or problems occur on any of the other three, a real possibility with such a

high tech system.

The American Navy has twelve aircraft carrier groups to ensure that three are always operational. When

absolute security is vital the long-established naval 4:1 ratio should be maintained, and the relatively small

additional net cost – £2bn-£3bn ten years hence – accepted. Such a tiny possible economy so far ahead

makes no contribution to the financial stringency of the next few years, and is a risk too far.

In sum, as the just retired First Sea Lord, Admiral Sir Jonathon Band, has said, Britain needs a navy of

sufficient size “to deter or defeat attacks, and versatile enough to operate across the entire spectrum of

possible tasking, the sort of sea power that can influence friends as well as deter enemies.” The major

shrinkage of the Royal Navy in the 11 years of severe budget cuts since the last Strategic Defence Review

– far below what that Review strongly recommended – means today’s Navy is seriously short of most

types of ship to meet its assigned responsibilities.

3.7 Why defence and security are permanently the first priority

of government

Time, tides and threats to national security wait for no man. Hence, a responsible government has little

leeway in deciding the appropriate level and timing of adequate defence provision. There are at least ten

cogent justifications.

These comprise the key Section 6 (6 pages) of ‘The Compelling Necessity’ Refeernce 2. They can be briefly

summarised:

a An adequate defence and security provision is the essential guarantee of all other benefits,

both public and private, otherwise nothing else in national life can be planned or enjoyed

27

in long-term safety. The best health and education services, etc. cannot continue to be

provided if terrorists disrupt national life, or stronger nations restrict or interrupt vital

imports of food, fuel or critical raw materials. It is, however, certain that no other nation,

however friendly, however long-term an ally, will be willing to protect our interests if we

will not contribute appropriately ourselves. All political parties have a clear duty to

make this plain to the public – repeatedly.

b The sums required are both affordable in the national context and excellent value for

money even in the present severe economic crisis. Britain is still a leading economy in the

world, near the top of the second division below the superpowers. We have many overseas

interests for our size and the largest seaborne trade of all the major nations (92% of our trade

is by sea). Much of this trade passes hostile coasts. Britain must find the means to protect

these interests permanently, because the cost of adequate defence represents a fraction of

the value protected. It represents an entirely economic insurance premium to enable us to

continue to enjoy the resultant benefits. Once the MoD has become lean and efficient it

should be able to make savings of £3bn-£4bn a year, perhaps a bit more, on its present

annual spend (circa £35bn). But to make up for the many poor value cuts to defence in

the last 12 years, and to meet the underprovided and growing threats – see above and

Reference 1 – annual expenditures are likely to need to grow by £4bn-£5bn a year for 2011-

2013, i.e. to a net annual spend of circa £43bn-£46bn. (Monies could not be spent faster,

because neither manpower, training nor equipment expenditures can rise any faster however

necessary.) Such sums are entirely affordable as the economy starts to grow again. The key

point, however, is that the defence insurance premium is far lower than the potential losses

and consequences from not spending it. As the co-author of ‘The Compelling Necessity’,

Andrew Roberts wrote in his new recently published history of World War II, ‘The Storm of

War’, “The evidence of history – as true today as in the Twenties and Thirties – is that money

invested in defence amounts to a fraction of that wasted in war.”

c Adequate defence provision is the essential pre-requisite for reliable collective security. If

Britain does not defend itself adequately we cannot expect other nations to bear the

burden. Certainly not the European Union whose military spending is and will probably

remain inadequate and whose willingness to engage in front line operation, is often heavily

constrained or confined to a few of the smaller nations. And if Britain cuts its already

inadequate defence provision which already dismays American political and military

leaders, it could spell the end of NATO. America may then well despair of bearing the

world’s defence burdens almost singlehanded and the world would become much more

dangerous for Britain and the EU alike.

d Adequate defence expenditure is inescapably long-term. It is particularly unsuited to

having a variable annual budget. Rather it needs steady, reliable, committed funding which

takes full account of changing and growing threats. Major weapons programmes take 10,

12 or 15 years to be conceived, designed, tested, built and trained for. Economies to meet

temporary funding problems can cause serious, sometimes catastrophic damage later in

impaired capability when a threat suddenly materialises. And as the long-term costs are

inevitably much higher with stop-start programmes (see above), they are very false, shortsighted

economies. Nothing less than sound strategic planning and a more robust and

stable expenditure commitment can ensure adequate and economical long-term defence.

No-one thinks it wise to reduce insurance premiums because one’s house did not burn

down last year, or reduce the size of the police force because terrorists did not strike.

Exactly the same logic must apply to defence.

e A long-term defence commitment is necessary to attract and retain quality Service

personnel. They need to be highly trained, well paid, motivated, properly equipped and

in sufficient numbers that they and their families can cope with likely operational demands.

28

It is all too apparent that these conditions are currently far from being met in Britain’s

Armed Forces. We have too few Servicemen and women in all three services to provide

an attractive career particularly with further cuts under constant consideration, and too few

reservists. Servicemen are overcommitted, underequipped, and too few in number. As an

MoD survey in May 2008 showed, nearly half of all Servicemen and women and reservists

are seriously considering resignation – a most frightening situation. If even half of them

were to resign – and more and more key once highly motivated Servicemen and women

are doing so – Britain’s defences would be paralysed.

f A long-term defence commitment is also necessary to ensure a strong indigenous defence

industry vitally needed on grounds of national security – see above. This too requires

consistent spending. As the recently published UKNDA paper on the British defence

industry has shown 1, relatively low level of British defence expenditure, with its frequent

postponements, cancellations and cuts, is playing havoc with our defence firms with the

most worrying consequences for their future and thus Britain’s security. This is particularly

short-sighted on national economic grounds as two reports in September show

conclusively References 5 and 6. The UK defence industry with an annual turnover of £35bn and with

exports of £5bn, is Europe’s most successful defence exporter overall. It employs more than

10% of total employment in the ‘high tech’ end of the manufacturing industry, adding £12bn

in value annually to our economy. It is thus a major source of high tech growth and

employment – not an activity to damage with short-sighted cuts. Indeed, the current

situation is now so adverse that BAe has been actively considering relocation to America.

g A further reason for adequate long-term defence funding is to overcome the large cumulative

deficit from years of under-funding and over-commitment. The Treasury forced a £1bn-£2bn

annual cut in the budget for SDR 98 for all subsequent years, causing a cumulative deficit in

the equipment budget alone, estimated by the Royal United Services Institute (RUSI), at in

excess of £15bn. This marked shortfall well illustrates the telling Conservative Party criticism

that “the present Government failed to repair the roof when the sun was shining.” Of no

major area of government responsibility is this more true than for defence expenditure. Yet

defence, par excellence, is the necessary ‘roof’ over all other public and private spending. As

such it needs fixing, i.e. having money spent on it. Hence no incoming government can

expect it to yield the major savings that ought to be possible in the unreformed and much

larger budgets for education, welfare and health where evidence of waste and inefficiency

abound. When the £3bn - £4bn possible annual MoD efficiency savings are realised, more

again is needed to make defence of the realm fully secure.

h Temporary overall cuts in the defence budget may sometimes be justified, but these

exceptions do not apply to Britain in early 2010. First, if defence had been properly funded

for many years, as in America, some temporary economies might now be possible. It is

reasonable to expect some significant cuts from improving MoD efficiency identified above

(some £3bn-£4bn a year). But no military experts believe any such justified economies are

enough to avoid a significant net increase in defence expenditure if it is to match the

nation’s current needs. A second reason for some temporary deferment of expenditure

might be justified if all politically hostile nations – e.g. Russia – were also budget

constrained. But for the main Islamic threats in Iraq, Iran, Afghanistan and Pakistan, etc. –

this does not apply. The terrorists and insurgent activities show no sign of budgeting

restraint, quite the reverse! Indeed, as oil prices rise so we might expect to see increased

funding, not only for Russia, but for terrorists as well.

i If there is a case for a further national economic stimulus to the economy in the present

severe economic crisis then increasing defence expenditure is an excellent, perhaps high

priority, candidate. There are three areas worth consideration:

29

1) Upgrading the long-neglected housing for Armed Forces personnel and their families.

This would give a much needed boost to morale and lessen the likelihood of

resignations. It would also make use of otherwise idle resources in the construction

industry at a time of a severe shortage of orders.

2) Giving a significant pay increase to lower ranks who have fallen too far behind their

civilian counterparts. This would nearly all be spent rather than saved because pay is

already inadequate for the needs of Britain’s Servicemen and servicewomen. It would

also give a very welcome boost to morale.

3) As defence expenditure has been cut for so long, and there is such a large cumulative

deficit in equipment, more defence spending would help fill the presently dangerous

gap and would boost faltering employment in the defence sector.

j There is a last and particularly important reason for Britain to raise her defence contribution

and make it once again the top national priority. Britain is one of the leading nations below

the big superpowers of America and China. If Britain does not raise her defence funding

– then we must be prepared to give up our Security Council seat at the United Nations. We

have been a powerful ‘force for good in the world’ since at least 1914. It should be

unthinkable to forfeit all this and leave the nation dangerously undefended to ‘save’ what

in a national context are small sums of money in a temporary if severe economic crisis.

Is it really acceptable that because the present Labour Government has made health,

education and welfare its top priorities, and has effectively frozen defence expenditure

at a dangerously inadequate level, the next government, be it Labour or Conservative,

will be incapable of restoring defence to the nation’s top priority? To give up Britain’s

beneficial global influence by continuing the neglect of defence would be a decision of

such national folly that it is to be hoped no government would dare take it. The time has

come for British political leaders to remember our proud history, and to make the

convincing case for restoring defence provision to its justified pre-eminent position. Surely

we are not willing to repeat the 1930s Great Depression neglect of defence and risk similar

appalling consequences?

30

The twin pillars of Britain’s defence since World War II have been the Special Relationship with the United

States and the NATO alliance to which Britain’s contribution has been second only to that of America, both

in capability and operational commitment.

This, in the words of Professor Colin Gray, is “by far the best deal the British people can hope for. There

are no good or even adequate alternatives (neither British isolation, nor Europe). The US alliance is

mandatory, it is not discretionary.” (Our emphasis.) That relationship is now in peril because years of

underfunding have resulted in each of Britain’s Armed Services being so overstretched that their

effectiveness is severely hampered and now in severe decline. We are losing the respect of US military

and political leaders. This is the most serious single threat to British security. We have to regain

America’s confidence while there is still time.

In the last 12 years, Britain (and even more, Western Europe) has made the expansion of the welfare

state the overwhelming priority, resulting in the serious under-provision of defence. It is in the national

interest to put this right while making major changes to raise the efficiency of the MoD to an acceptable

and achievable level. The essentially modest net sums involved are not merely affordable, they are

essential to avoid the serious risks now facing Britain and her independent, secure and prosperous future.

No political leader endorses Britain’s retreat from being a top tier military power, so they must now

commit the net funds to avoid it. Given farsighted leadership Britain can be turned round despite its

serious present position, just as it was 30 and 70 years ago. The incoming government must now place

duty to national security above short-term cuts by converting the existing strong and growing public

support for our Armed Forces into an adequate defence provision. The nation awaits.

31

Conclusion

32

1. The Strategic Defence Review should be directed to adhere to the principles set out in the Foreword.

2. The current equipment procurement programme should be retained, and capital expenditure ringfenced

for the lifetime of the next Parliament.

3. Decision triplication on procurement issues between the Cabinet Office, the Treasury and the MoD

should end. The Secretary of State, with appropriate military advice, should be delegated sole

responsibility for cradle-to-grave procurement issues.

4. Frequent changes of Secretary of State should be avoided. Ideally, the Prime Minister should appoint

one Secretary of State and one CDS for the life of a Parliament.

5. Defence procurement should wherever possible be ‘off the shelf’ and for specific roles. Additional

costs for R&D or for those costs resulting from collaborative defence programmes should be identified

and funded separately.

6. Any increase in procurement costs resulting from Treasury-demanded delays should fall not to

defence, but to the contingency budget.

Recommendations

Education

15%

Health

17%

Department

for Transport

3%

Home Office

& Justice

17%

Ministry

of Defence

Culture Media 8%

Sport

1%

Environment

1%

Business

0% FCO

0%

Energy

1% DFID

1%

Work & Pensions

15%

HM Treasury

15%

Others

15%

Data from Central Government Supply Estimates 2009–10.

Main Supply Estimates for the year ending 31 March 2010.

Budget 2009

33

Annex A

34

References

1 ‘A DECISION THE NEXT PRIME MINISTER MUST MAKE’ by Tony Edwards which considers the

implications for equipment suppliers, particularly British ones, of UK defence policy decisions

– a UKNDA report of March 2009.

2 ‘A COMPELLING NECESSITY’ by Andrew Roberts and Allen Sykes (Foreword by Irwin Stelzer),

July 2009, which sets out the case for increasing the UK Defence Budget despite the present

serious economic crisis because an adequate defence provision is far cheaper than attempting

to skimp on necessary national security – a UKNDA report of July 2009.

3 ‘D-DAY FOR DEFENCE CUTS IN £36BN CRISIS’, by Michael Evans, Defence Editor, The Times,

15th December 2009.

4 ‘SOME LESSONS OF THE A400M PROGRAMME’ by Vice Admiral Sir Jeremy Blackham, IQPC

Conference, 11th-14th October 2009.

5 ‘SECURING BRITAIN’S FUTURE AND PROSPERITY’, Defence Industries Council, September 2008.

6 ‘THE ECONOMIC CASE FOR INVESTING IN THE UK DEFENCE INDUSTRY’, Final Report, Oxford

Economics, September 2009.

Britain’s Armed Forces:

Under-funded and over-stretched

Britain’s Armed Forces are chronically under-funded and over-stretched.

Not since the 1930s have our Navy, Army and Air Force been so starved

of the resources they need.

Our forces have been slashed in half over the past two decades alone –

yet in the same period our military commitments have vastly increased.

The UKNDA has been formed to campaign for ‘sufficient, appropriate and fully

funded Armed Forces to provide an effective defence of our country, its people,

their security and vital interests wherever they may be.’

We champion the cause of our nation’s brave servicemen and servicewomen – of

all ranks and across all three Services. We work to ensure that they have the right

weapons and equipment, that they are properly paid, and that they and their

families receive the care and respect they deserve.

Members of the UKNDA are drawn from all walks of life and include many veterans

of the Royal Navy, Army and RAF, as well as those currently serving in the Forces,

and their families and friends. You do not need to have any military background

or connections in order to join our Association. Membership is open to all.

To learn more about our campaign – and to join

and help us – visit our website:

www.uknda.org

call 023 92 831 728 or write to us at: UKNDA, PO Box 819, Portsmouth PO1 9FF

United Kingdom National Defence Association

UKNDA Ltd (company reg. no. 6254639) P.O.Box 189, Portsmouth, Hants PO1 9FF

Website: www.uknda.org

For further information please contact the Public Relations Officer, Andy Smith

on 07737 271676, email: pro@uknda.org