The defence budget is solved (but don’t ask about capabilities)

This week Liam Fox is expected to announce that the Ministry of Defence (MoD) has eliminated the ‘black hole’ in the defence budget. It is reported that the funding gap – the projected departmental budget in relation to the real budget – could have ballooned to as high as £74 billion, twice the department’s annual spend. The announcement will likely have an air of success but the Defence Secretary must recognise that by reigning in the defence budget, the UK exposes itself to more risks. This is predominantly in the armed services ability to retain full-spectrum capabilities and maintain high morale while also fulfilling the aims set out in the National Security Strategy (NSS).

Liam Fox and the MoD have achieved something that is commendable; the department was on the brink of losing control. The true extent of what was happening within the MoD came to light when the National Audit Office (NAO) published its 2009 Major Project Report analysing, in detail, major defence programmes. The report criticised the management of equipment projects, especially the practice of ‘slipping’ – delaying a project to save on costs – saying it did ‘not address…fundamental affordability problems’.

The apparent lack of control exerted over defence equipment and procurement, even in small-scale equipment like ammunition, radios and firearms, was laid bare in August of this year. Officials had to make embarrassing admissions that over £5 billion worth of equipment was unaccounted for and in all terms ‘lost’. This included brand new Bowman radio sets. It was even suggested that some may have fallen into the hands of the Taliban.

When interviewed by The Guardian last week Liam Fox said the previous Labour government along with senior military chiefs and MoD officials were to blame for the ‘dog’s breakfast’ the coalition inherited. Causing consternation with former and current officials, the defence secretary said the department had ‘dug a hole for itself’ and blamed military chiefs for the breakdown of trust in Whitehall that characterised the last months of the Brown government.

Liam Fox’s remarks, although accurate, have caused a mini-furore in the press and around Whitehall. There is particular anger at the timing of his comments; on the same day the Navy announced more job losses for personnel. Around 1,020 navy personnel were told that they had been made redundant. Around a third of those are compulsory while the rest have been voluntary. This is the latest ‘tranche’ of cuts that began earlier this year. At the beginning of September around a thousand personnel from both the army and Royal Air Force (RAF) were made redundant.

So what exactly are the consequences of squeezing the defence budget and the apparent diminution of capabilities? Three reports released in the last ten days, one on the Libya campaign, one on defence spending and the other on the Falklands, shed light on this. Two reports have been written by the Royal United Services Institute (RUSI), they have praised the performance of our service personnel for the work they are doing on and off the battlefield. But the reports, along with the third written by the UK National Defence Association (UKNDA), have worrying details that indicate the recent ‘successes’ that our personnel have enjoyed could be short-lived.

In a report by RUSI called ‘Looking into the Black Hole’ Professor Malcolm Chalmers stressed that even though the MoD’s finances are back on track there remains several challenges ahead. There are ‘hard battles’ to be fought especially in future equipment programmes, pay levels, service accommodation, boarding school allowances and regimental identities. Projects like the renewal of the nuclear deterrent, the Joint Strike Fighter (JSF) and the Royal Navy’s Type-26 frigate could cause difficulties for the MoD. Any set-back in any of these areas could cause the budget to go back into the red. In other words, the MoD is currently walking a tightrope.

Writing in the Guardian a day after the publication, Richard Norton-Taylor drew on the report’s claim that Britain ‘will never again be a member of the select club of global superpowers’. According to Norton-Taylor many of our current leaders still suffer from ‘post-imperial hubris’. This has been on show in the recent Libyan conflict as politicians still try to assert Britain’s ability to ‘punch above its weight’.

RUSI’s second report looked at how the Libya campaign had been fought especially with UK air and naval assets. The report gave the Cameron – Sarkozy alliance its deserved congratulation for achieving the aims set out but it also questioned the apparent capability deficit that the alliance also had to contend with. Much of the meat of the operation, although not officially announced, was undertaken by the US especially during the initial bombing campaign and through logistical supply.

The whole campaign and the RUSI report, in particular, shows that drastic budgetary cuts are affecting UK capabilities across all spectrums of combat. The navy appears to be taking the brunt of the cuts. In February it was announced that the Royal Navy would end patrolling the Caribbean, a role it has performed since the end of the Second World War. Many of the ships that were sent to Libya had to drop on-going naval operations such as the South Atlantic naval presence (HMS York), counter-piracy in the Indian Ocean (HMS Cumberland), and domestic maritime security (HMS Westminster).

Significantly, since the de-commissioning of HMS Ark Royal the UK lacks an aircraft-carrier capability, something that the Libya campaign has highlighted. David Cameron has been dismissive saying in one interview; the ‘armchair generals who said “you couldn’t do it with an aircraft carrier”…were wrong’. Liam Fox has also taken a similar line in recent interviews, but the truth belies this rhetoric.

From the beginning of Libya operations in March until Gaddafi’s fall in August there were four large-deck platforms stationed near the Libyan coast. France’s flagship aircraft carrier, Charles de Gaulle, deployed in March while the US sent an assault ship. The UK, contrary to the claim that it did not have an aircraft carrier, deployed HMS Ocean, a large-deck helicopter assault ship for air operations. Italy, the country that hosted RAF jets at Gioia del Colle, sent its own aircraft carrier Giuseppe Garibaldi rather than rely solely on land bases alone.

Looking beyond our short-term interests in places like Libya and Afghanistan there is still the problem of maintaining our longer-term interests, especially in the South Atlantic and domestic maritime security. Last week, the UKNDA released a report criticising the current level of defence spending. The report was written by ex-defence chiefs who saw the Falkland Islands as ‘plum ripe for picking’ because of under-funding and the UK’s lack of defensive capabilities. There is a genuine concern amongst those in the armed forces and academia that we – in Lord West’s crude words – may become ‘another bloody Denmark or Belgium’.

Liam Fox has been able to do the almost unthinkable, balance the books at one of the most unwieldy departments in Whitehall, while under a severe budgetary squeeze. Adding to this, he can also add a successful military intervention to his credentials. Fox and his team deserve a pat on the back for their efforts. The only problem is that the deficit in spending has been replaced with a deficit in capabilities. Filling a capability-gap will take significantly longer to rectify than a funding-gap. The defence secretary’s job is by no means over, more personnel cuts are due next year and key decisions regarding equipment are yet to be made.

The biggest challenge for UK defence remains; what the military can offer in relation to our broad strategic aims as set in the NSS. Unfortunately for Britain and its security, Liam Fox has not yet solved this problem.

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Posted on October 6, 2011, in Coalition Government, General and tagged , . Bookmark the permalink. Leave a comment.

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