Analysis: UK Defense Cuts Penny-Wise and Pound Foolish
(Source: defense-aerospace.com; published Dec. 12, 2008)
By Giovanni de Briganti

PARIS --- Taken individually, the procurement decisions announced on Dec. 11 by British Defence Secretary John Hutton will allow the Ministry of Defence to reduce its short-term outlays, and thus survive an imminent cash crunch, without making any irreparable long-term damage to major programs.

In aggregate, however, they make little financial sense, and perpetuate Labour’s illusion that it can fight two wars while still enjoying a peace dividend from the end of the Cold War. Hutton’s decisions will only add to the armed forces’ financial pain in the medium and long term, as they do nothing to diminish the financial “bow wave” that MoD keeps pushing forward.

Tellingly, Hutton’s statement provides no estimate of the savings it hopes to achieve, and does little to reassure the armed forces and industry of the reliability of the government’s procurement plans. Indeed, as each delay in a weapons program adds to its ultimate cost, MoD is inflating its future procurement costs for the sake of short-term financial relief.

That Hutton is fully aware of this is illustrated by the fact that yesterday’s most important decision, the delay in the two new aircraft carriers, is buried in the 11th of 14 paragraphs of his statement, well after lengthy discussions of far less financially significant changes to other programs.

The result is that Britain’s once-formidable armed forces will continue their transformation into a military Potemkin village, caught as they are between an immovable financial ceiling and steadily rising costs generated by urgent operational demands, unbearably high weapon cost inflation, and investments in future weapons that cannot be stopped or deferred.

Reactions to Hutton’s statement have been uniformly negative. The opposition Conservative party said it was "a bad day for industry, as major programmes are thrown into confusion through the Government's incompetence,” while for the Liberal Democrats Hutton’s proposals take the "same old failed approach to defence procurement…delays and salami slicing."

Specifically, the changes outlined in Hutton’s statement are:

-- the two new CVF aircraft carriers will be delayed “by one or two years” (but is it one or two?). As the Joint Strike Fighter they are due to carry will not be available before 2016 at best, the delay has no operational impact and preserves both programs.

- Upgrade of the Warrior infantry combat vehicle will be funded as a priority, while the FRES program will be restructured by bringing forward its Scout Vehicle variant, which is urgently needed to replace the 30-year old Scimitar reconnaissance tanks used in Afghanistan and Iraq. The FRES Utility Vehicle, based on the Mowag Piranha V, is postponed indefinitely and, like the rest of the program, may be eventually scrapped.

-- MoD will preserve most of the Future Lynx program, which is crucial to renewing the Army’s battlefield helicopter fleet, while funding the upgrade of 12 AH 9 Lynxes (cost: £70 million) so they are finally able to operate with no restrictions in “hot and high” environments such as Afghanistan and Iraq.

-- Finally, an unspecified “alternative approach” will be followed for the planned Military Afloat Reach and Sustainability (MARS) fleet support ship programs, whose fleet tanker element of up to six ships will “likely” be deferred. (ends)


Click here for an interesting if irreverent analysis of Hutton’s decisions (“Hutton robs forces, pours MoD cash into UK arms biz”) published by The Register (HTML format).


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