Thursday, September 18, 2008

October 2008 Defence Management Board meeting: Options for ...?

After the summer political and bureaucratic recess in the United Kingdom, the Ministry of Defence, as other other Government Departments returns to normal to pick up where business left off in July.

This season is somewhat different. The recent financial upheavals globally will likely leave UK PLC needing to cut back unneccesary government expenditure, and with the Ministry of Defence being one of the biggest spenders on goods and services, will face significant budgetary pressures.

The mechanism the Defence Management Board (DMB), the most senior decision-making body in the Department will likely rely on is the Equipment Plan (EP) - a spreadsheet containing 10-year costs for all on-going and planned programs in the UK defence establishment.

Given the typical 3 year term of service of DMB officials and a ten-year plan, making decisions can be compared to moving into a house in which there are several large pieces of immovable furniture - all you are left with are options to move the ornaments.

Putting this into the context of current likely budgetary decisions what is likely to happen next month of relevance to the Defence Industrial Base ?

Projects likely to go into limbo (read 're-scoping', 'further development', 'independent review' or 'further scrutiny'):

1. FRES (Future Rapid Effects System) - "requirement superceded by UOR's".

2. Defence Training Rationalisation (DTR) - "requiring further review as to the appropriate scope for this PFI-PPP programme"

Urgently needed, but significant investments:

A. Helicopters

Projects likely to be pushed back:

1. Any not significantly into the "Manufacture" phase of the CADMID acquisition process. Look to the Future Aircraft Carrier program as a significant indicator.

2. Programs in manufacture may face cuts in numbers (exception: the Astute Class nuclear attack submarine program) and or delay. See the Type 45 Anti-Air warfare destroyer as indicative.

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