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Britain/U.K. | Budgets | Corporate Innovations | Issues - Political

Britain’s Defence Equipment Plan

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Through a glass, darkly(click to view full) As part of the current coalition government’s defence reform efforts, the UK Ministry of Defence has begun issuing a bare-bones 10-year equipment plan of expected budgets, and graphics of planned expenditures by category. A fuller plan is submitted to Britain’s National Audit Office for review. The plan itself […]
HMS Diamond & Sea King ASaC

Through a glass, darkly
(click to view full)

As part of the current coalition government’s defence reform efforts, the UK Ministry of Defence has begun issuing a bare-bones 10-year equipment plan of expected budgets, and graphics of planned expenditures by category. A fuller plan is submitted to Britain’s National Audit Office for review. The plan itself is a step forward, and so are some of its underlying practices. Even if the document as a whole falls short of being a useful contribution to public debate.

Summaries of some key changes, and information, can be found below.

The Defence Equipment Plan

HMS Vanguard

HMS Vanguard
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The Defence Equipment Plan, like the 2010 SDSR strategic review that preceded it, stemmed from a huge problem. It had become apparent that Britain, like most countries, had overly optimistic plans for buying defense equipment. Unlike most countries, Britain’s government chose to grapple with the issue, and face a plan vs. funding shortfall that was estimated at anywhere between GBP 36 – 74 billion.

The SDSR made many program and equipment cuts, some of which will seriously compromise British defense capabilities. Without a clear funding plan for the rest, however, all of that would have been for naught. In January 2013, Britain’s MoD released a 10-year funding plan worth GBP 159.4 billion, of which about 54% involves equipment support rather than purchases. A quick breakdown by category shows:

* £35.8 billion on submarines and the nuclear deterrent, including a total of 7 Astute Class attack submarines, and the Successor Class replacement for Vanguard Class ballistic missile submarines. This is the largest single category, by almost a factor of 2.

* £18.5 billion on combat air power, including F-35B Lightning II and Eurofighter Typhoon fighters, and armed UAVs.

* £17.4 billion on ships, including 2 Queen Elizabeth Class aircraft carriers, the rest of its Type 45 destroyers and development of the Type 26 Global Combat Ship frigate.

* £13.9 billion on aircraft for air-to-air refuelling, passengers and heavy lift, such as the A330 Voyager aerial tanker/ transport and A400M transport.

* £12.3 billion on armored fighting vehicles, including Warrior IFV upgrades, FRES-Scout and other land equipment.

* £12.1 billion on helicopters, including buying CH-47 Chinook heavy transports and AW159 Wildcat utility/ scout/ naval helicopters, and refurbishing and upgrading AH-64 Apache attack helicopters and AS330 Puma medium transports.

* £11.4 billion on weapons, including higher-end items like missiles, torpedoes and precision guided bombs.

The UK MoD currently spends around 40% of its budget on equipment and equipment support. Under current plans, the ministry wants to push that to 45%.

This amount includes something new: about GBP 13.2 billion in risk reserves, or around 8.28% of the total budget. Within its various programs, the UK MoD has an estimated GBP 8.4 billion in funding, as a reserve against risks judged to have a 50% or greater probability of coming true. On top of that, a centrally held reserve of GBP 4.8 billion is planned to cover unexpected risks.

Another GBP 8 billion is held as “unallocated” funding outside the core program, to cover unexpected new needs, or programs at the top of the “almost made it” list that suddenly rise in importance.


CVF Concept

RN CVF Concept
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The NAO has a more detailed evaluation of the Defence Equipment Plan, based on far more complete data. This article will incorporate many of its key points over the next few days, and many of those points are valid. Britain has made strides, but they aren’t quite there yet.

From our perspective outside of this process, the biggest shortcoming in the 2012 report is that it provides pretty pictures, but very little actual data. Annual budgets are mentioned, 10-year totals for various defense sectors are announced in a press release, and the “report” has graphs. The graphs don’t offer accompanying numbers, however, nor do they explain exactly which programs comprise each sector. Some major programs are mentioned by name within a specific sector, but those mentions don’t come with planned amounts.

The NAO’s report offers more details, but that isn’t necessarily helpful with respect to the business of Parliament, or of public debate.

If a program is cut, or even removed, what’s the effect on the 10-year plan? Annual spends? There’s no way to know from the report. The data definitely exists, or the graphs in the report couldn’t exist. It’s just that the UK MoD could not, or chose not to, organize and share that within the published plan. Even tables showing the composition of each sector, and amounts of the major programs within it, would be a huge step forward.

These are not mere quibbles. They are the foundations of proper Parliamentary consideration, and informed public debate over time. The UK MoD claims that its defense planning process does a far better job of accounting for risk, and planning realistically for the future. The claim would be more persuasive if it could be evaluated by Parliament and the public against what is currently known, in a way that allows those evaluations to change as circumstances change.

Additional Readings

* UK MoD (Jan 31/12) – The Defence Equipment Plan 2012 [PDF]. See also their Addendum [PDF], which addresses some public disputes regarding understated costs.

* UK NAO (Jan 31/12, HC 886 2012-2013) – Ministry of Defence: Equipment plan 2012-2022

* UK 2010 Strategic Defence & Security Review [PDF]. The review set the equipment baseline for the Equipment Plan.

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