Monday, November 24, 2008

The UK pre-Budget speech 2008: No relief for the UK Defence sector

Those hoping for long-standing recognition of the efforts of the defence in support of UK plc. have no greater sight of light at the end of the tunnel following Chancellor Alistair Darling's pre-budget speech earlier today.

The speech is raising the prospect of a savage review of the Gershon Office of Government Commerce (OGC) efficiency savings exercise and makes no mention of the defence enterprise.

Quoting directly from his speech:

"having carefully considered the extent and the limits of efficiency savings, today I can announce the Government will now find an additional £5bn of efficiencies in 2010/11 for a total saving of £35bn over three years.. The efficiencies will come through lowering the cost of back office operations, better procurement, examining property holdings and asset sales."

In terms of named public spending initiatives:

"I can announce today that £3bn of capital spending will be brought forward from 2010/11 to this year and next. The money will be used to:

• increase capacity in the motorway network,
• improve and build new social housing,
• renew primary and secondary schools,
• and invest in energy efficiency measures."

As taxes received by the Treasury face a fall on the back of the global economic downturn, and the effects on the financial sector - this new expenditure has to come at the expense of other expenditure.

One can image the telephone line to the Minister of State for Defence Equipment & Support ringing right about now...

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