Wednesday, 7 November 2018

The Defence Equipment Plan 2018

To the surprise of fucking no one the National Audit Office released its review of the Ministry of Defence's Equipment Plan for the period 2018-2028 and found that the MoD is facing a black hole in its budget estimates. This amounts to £7 billion over the next ten years, which my keen sense of mathematics tells me would average £700 million per year, though the actual estimate is that 84% of that shortfall will occur in just the next four years out to 2022. The depressing words "the plan remains unaffordable" appear two paragraphs into the summary, later followed by the equally depressing news that the £7 billion shortfall might actually be a significant underestimate and that the plan could prove to be undercosted by as much as £14.8 billion by 2028.

That news might be less of a concern if it wasn't for certain highlights tucked away in the text, such as the MoD only just realising this year that the Type 31 program is in fact not free and spending on it needs to be included in the accounts, along with the tiresome revelation that the MoD is still using a 50% confidence level on its cost estimates (i.e. the project at approval is equally as likely to cost more than budgeted as it is to cost less) despite being warned about the risks of doing this numerous times in the past (it allows them to sneak all their goodies into the budget and not have to make tough choices). Oh, and then there's the small matter of the MoD yet again trying to make ends meet in year by deferring spending and de-scoping projects, with all the attendant risks that entails for significant future project delays and cost over runs.

Stop me if you've heard all this before.

It's like when you tell a child to stop picking their nose, turn your back for a second, and then look back to find their index finger firmly wedged up their snout. It's getting beyond a joke frankly, especially when you consider both the staggering size of the sums of money involved, money which comes out of the pockets of often hard pressed families, and the consequences for those on the front line when vital equipment is delayed, cut back or simply deleted, as well as the fallout for them when the financial pressure impacts other areas such as service accommodation and leave.

I've seen lots of well meaning posts on how to resolve the problem. Unfortunately most are centred around the unlikely pursuit of a significant budget uplift for defence, the more fantastical of which aim loftily for a 3% of GDP target for defence. To put that into perspective the UK currently spends a little over 2% of GDP on defence, which amounts to around £40 billion. To increase spending to 3% of GDP would require the defence budget to rise by about £20 billion per year. For perspective, the NHS - that most holy of sacred cows - has only just managed to secure a £20 billion per year budget increase, which it won't realise for another five years. The idea that defence, with a current budget around a quarter of the size of the NHS, would get a similar increase without the start of world war three is beyond wishful thinking.

Even a relatively modest increase is not especially likely. The £1 billion injection recently announced for the MoD is nothing more than an in year plug to fill some holes. It is not a long term plan. The reality of political economics is that voter concerns largely dictate where the bulk of any cash goes, which is why the NHS is being handed a bumper rise in the coming years, which it will almost certainly fritter away before returning with begging bowl in hand once again (the NHS and MoD have more in common than some think). Defence however does not win votes. While it might literally win a few, in the more abstract sense of convincing large numbers of people to leave their homes and vote for a particular party, defence is a no hoper. Right now health care, police and crime, housing, and education are all much larger priorities for most people. 

Therefore to plan for a future where defence attracts regular budget increases beyond just that needed to keep up with normal inflation - let alone defence inflation - is simply preparing to fail as far as I'm concerned. There is no pot of gold at the end of the rainbow. There isn't even a rainbow. 

It concerns me because once again we find defence heading towards a major government spending review with its finances in tatters and no realistic long term plan of how to solve the problem. No hard questions appear to be being asked, instead it's just more of the same; snip around the edges to make this years budget fit and then cross your fingers and hope for a windfall next year. The result of this line of thinking will simply be a perpetuation of the cycle, leading to next years NAO review of the equipment plan being virtually a carbon copy of this years. 

At some point someone in defence has to not just talk about getting a grip of the situation and actually do something meaningful. And by "meaningful" I of course mean "make some difficult choices about who and what gets funding". It is par for the course in the civilian world that when budgets tighten, something has to give and somebody, somewhere will be required to step up and make those decisions. Not asked their opinion on whether it's a good idea or whether they think more funding will come available in the future. Somewhere along the chain of the management structure someone will be told in no uncertain terms "your budget is being cut, what's your plan for how you are going to achieve this?"

To be brutal, this is what defence needs. Not pandering to the press or leaking details of proposed cuts in the hope that the magic money bunny will come hopping along and make a deposit. Someone needs to take charge of the situation and make it happen. Defence cannot continue stumbling along from one review to the next, trimming a little bit here and a little bit there, gradually eroding the services as a whole and "making do" by starving things like training pipelines or the provision of spare parts of funding in order to keep up appearances. 

Now I appreciate that this is not a comfortable thing for senior officers to stomach. They are understandably proud of their service and of the armed forces as a whole, and nobody really wants to be remembered as the ax man who gutted capability x to guarantee funding for capability y, however sensible that might have been for the long term interests of defence. I'm also cognisant of the fact that senior military officers lack one of the major advantages that UK cabinet ministers enjoy when it comes to major decision making. 

See, I was in the garden just now having a think about cabinet collective responsibility (as you do). 

Here in the UK, cabinet ministers are bound by the principle of collective responsibility for decisions they take as a group in cabinet meetings. They discuss the important issues with one another, put forward their individual cases and opinions, and then choose a course of action to proceed with. While a minister can disagree vehemently with the proposed course of action, this only applies for the duration of the meeting. Once they leave they are expected to tow the line as it were and support the official position taken by the cabinet. Doing so not only guarantees the appearance of unity, it also helps guarantee a unity of purpose, because once you've accepted your share of collective responsibility you're as much on the hook if it all goes wrong as anyone else in that room.

The alternative, should you disagree so vehemently that you are not willing to accept a portion of the blame for the consequences of a decision made in cabinet, is to resign your ministerial position. By doing so you are not only making way for someone who is prepared to follow the cabinets decision and pursue it ardently to its conclusion, you are also freeing yourself up to go out into the big wide world of the media and state why it is that you think cabinet is wrong to select the course of action that is has and to propose an alternative.

Now you might be thinking that a senior military officer can do the exact same thing and you're essentially right. I've long believed that rather than waiting ten years to retire before releasing a memoir to talk about how they saw an impending disaster coming but nobody would listen to their profound wisdom, senior officers ought to resign if they really think things are going - or about to go - that badly. 

But having reflected on the matter just now, I will throw them a bone in the sense that cabinet ministers enjoy the key advantage of being able to resign without committing career suicide. A cabinet minister can resign their office on a matter of principle knowing that at some point in the future they may indeed be (and often are) welcomed back with open arms. Resigning from the cabinet is more of a temporary career setback for a politician, as opposed to the career ending move such a resignation would be for a senior officer.

As such I'm wondering whether the military system might need a bit of a shake up. Governments of various colours have tried and failed with all manner of initiatives to try and restore some semblance of sanity to the MoD's finances. We also seem to be perpetually no more than a year or two removed from the latest incident whereby officers of some kind were chastised for not speaking truth to power (which of course rather assumes that power would have listened in the first place).

So what I'm suggesting is to open up the option for officers to more readily resign their position, but not their commission. It might require bringing back some sort of pool of officers on half pay waiting for a new assignment, but perhaps giving an officer the chance to resign his role as the head of such and such activity, without having to effectively leave the service as well, might make officers a little more inclined to speak out. They wouldn't even need to say anything really, the mere act of resigning from a role would speak volumes in and of itself.

I grant you that with a system as cumbersome, closed, and old boy networked as the military, this might still effectively amount to a resignation, just with a form of purgatory attached to it. But at least it provides officers with an option. An option to speak up over matters they consider important without necessarily having to leave the service which they have known for so long and to which they have given so much. 

And it also provides an option for those unwilling to do what is needed to step aside, and let those who will come forward.


  1. Well said, a well-rehearsed rant but with some practical ideas about how to go about dealing with the annual black hole rather than "cut dfid" or "boost defence spending by X".
    I like your suggestion about giving officers a way out without ending their career. To be honest these days, when many officers in senior positions are already in their 60's and plenty of jobs as consultants and the like sloshing around I still don't think it would be the end of the world if one of them resigned on principle (and imagine the PR boost for their post-resignation book release, "The Admiral who said NO" !).
    I think making some tough choices about cutting legacy platforms and covering their roles with other enablers is the way to go. Upgrading and then replacing CH2 when there are only 150 in decent condition and apparently more like 50 actually deployable at any one time would seem to be a big outlay with little cost-spread across platform numbers.
    Not saying they should be cut overnight but maybe a modest upgrade to optics and targeting with a view to phasing them out over 10 years. Boxer with ATGM and 105mm modules, and air support could surely cover the gap fairly effectively.
    Also ideally I think large, high-end assets ought to be shared with allies in some way, e.g. AWACS amphibs etc, thats more political than MoD business though perhaps.
    It would be nice to have one or two reliable European partners to work on joint development programs with two. The Dutch Norwegians and Swedes have stable enough budgets and governments, and vibrant defence industries, they also aren't likely to throw their weight around like the French and Germans either. Really think we should be looking to cooperate more with them on new procurement.

    1. "It would be nice to have one or two reliable European partners to work on joint development programs with two. The Dutch Norwegians and Swedes have stable enough budgets and governments, and vibrant defence industries, they also aren't likely to throw their weight around like the French and Germans either"

      If you go through some of my back catalogue, you'll find we're very much singing from the same song sheet anon!! May do something newer-er along those lines soon.

      As for "The Admiral who said NO", perhaps "Lions against donkeys" or "The Lion and the Penny Pincher" would have more dramatic weight? First impressions and all that. I do think a senior officer could retire rather comfortably, it's more a question of whether they wish to keep serving. Probably more aimed at say someone responsible for a particular line of spending, say helicopters, who resigns his or her post in protest but still has the ambitions and genuine desire to keep serving and maybe one day be a Chief or the like.

      Not sure Boxer can cope with replacing Challenger, however flash the modules and ATGM might be. Question is do we build a Challenger 3, or buy someone elses? Neither option particularly cheap.

  2. Hmm, this comment will almost certainly come out wrong but here goes... do we really need a MBT? Of course the army requires the ability to destroy enemy armour. Our armoured infantry require an IFV, mechanised infantry an APC etc but is there a requirement for a modern MBT. MTBs are becoming tougher but also more fragile with a dependency on external sensors and active protection systems leading to greater expense, fewer numbers and a lower cumulative capability. Can the infantry/IFV combination not handle most of the manoeuvre warfare tasks of the MBT (Strike brigades?). If faced with enemy armour would a combination of artillery, infantry ATGM and tank destroyers be sufficient? Perhaps a pure tank destroyer would be a lower cost solution. Able to be built and maintained in greater numbers. Of course this is a cheap option but if money was not a problem this conversation would not be happening.