Tuesday, September 16, 2008

EP go home...

The Guardian newspaper today carried a piece entitled "Defence chiefs plan equipment cuts amid £2bn hole in budget" by Richard Norton-Taylor.

It would appear that the Defence Management Board has the Equipment Capability Customer organisation (ECC) sharpening its pencils as to how to shave £2 billion from the UK Ministry of Defence (MoD) Equipment Plan (EP).

Casual observers and writers identify some of the more bizarre options such as retirement of Gazelle helicopters introduced in the 1970s (fully depreciated and would save little), paving the way to buy successor helicopters. Retiring some heavy tanks and artillery pieces - minor savings as they would likely be cannibalised for parts - if not already. At the time of the 1990 deployment to the Middle East, Challenger Tank availability was low - what is it today ?

The big decisions concerning the Equipment Plan (EP) will likely fall into three categories;

HARDEST (Programs which can be cancelled or de-scoped).  The record is one of few, if any programs being cancelled over the last decades (TRIGAT being the last example after 27 years).

1> Future Rapid Effects System (FRES). This program can be de-scoped to a 'spiral development' program to ensure all the vehicles purchased under Urgent Operational Requirements (UOR's) can share technology improvements in future.

2> Future Aircraft Carrier (CVF). As the number of escort vessels drop due to sacrifices by the Royal Navy to the Treasury (which has sunk more vessels since World War II than enemy action) the ability to protect these vessels gets ever harder. Freedom of Information requests identified plans to resusitate the current generation of three CVS vessels. Cancellation would upset the Labour Party (shipbuilding unions), the defence industry (where do they go ?) and MOD press officers - In the Strategic Defence Review (SDR) the future carrier was the only named programme.

HARD (In the short term): 'Salami-slicing' (i.e. cutting numbers to be procured of programs in process). In economic terms this translates into making programs more expensive and lengthening the time to get equipment in service, but has the benefit of smoothing the budget 'bow wave'.

1> Eurofighter Typhoon. There is a desperate need to sell more of the 232 aircraft the UK is due to buy or else cancel and have Government pick up the costs of abandonment. The Royal Air Force future fast jet front line had a target of some 70 aircraft including the Joint Strike Fighter (F-35 II). The problem is that the Ministry wove, with international partners, a very tight contract to prevent politicians abandoning the project in future.

2> Type 45 Destroyer. Designed to re-fight the Falklands War of 1982 (i.e. providing fleet air defence). Cutting the buy reduces still further the size of the RN fleet.

THE REALLY TOUGH QUESTIONS (investing for the future or "career limiting" in nature):

1> The DMB did not discuss the Astute Nuclear submarine (SSN). The nuclear engineering base is in such dire straights threat of cancellation would cause its collapse. Likewise the successor nuclear deterrent and the submarine to carry it (stretched-Astute class ?) goes unmentioned.

2> Future surface combatants - the Royal Navy needs ships to have an organisation - where are the numbers going to come from ?

3> The role of the Royal Air Force if the future is a front line of some 70 combat jets when each of the two future aircraft carriers can carry thirty plus ?

Lastly, healthcare, salary and pension costs eat into the defence budget narrowing further the funds for investment. WHy has noone considered major cuts in the number of civil servants in the Department ? The Second World War MoD was far smaller than today's ratio in excess of one bureaucrat per soldier, sailor or airman - something is awry in the state of Denmark ?

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