Tuesday, 12 October 2010

The Worst Case Scenario

Since the beginning of the British Strategic Defence and Security Review there have been many stories about the wholesale scapping of large elements of the armed forces.

To understand the basis for such stories we must have a basic understanding of several factors.

Firstly,the British government is heavily in debt and desperately needs to reduce expenditure.

Many government departments face budget cuts of up to 40%.

It is believed that the Ministry of Defence will be treated more leniently with cuts of no more than 20%,many suggest it will be less than that.


Secondly the defence budget is already said to have a procurement overspend variously reported as £35,000 Million to £38,000 Million.

That subject was covered earlier in this post.

Lastly,the government has decided that the British army will not face cuts while British forces are engaged in combat in Afghanistan.

This is a problem for the Royal Navy and Royal Air Force as the British Army consumes about half of the defence budget.

Which means any cuts will hit those two services twice as hard if army spending is ring-fenced.

The worst case scenario requires that a 10% cut is made to the defence budget for 10 years in order to eliminate the funding gap caused by the overspend in the equipment programme.

On top of that a further 20% cut is required to satisfy the Treasury's demand for reduced expenditure.

Those two cuts total 30% of the annual defence budget.

Because the army's budget is protected,that 30% has to be cut entirely from the budgets of the Royal Navy and Royal Air Force.

As these two services spend only about half of the defence budget,to make a 30% overall saving their budgets will have to be cut by an average of 60%.

The Royal Navy's budget was about £8,000 Million.

The Royal Air Force budget was about £7,100 Million.

A 60% cut would require that the Royal Navy's budget be cut by £4,800 Million to £3,200 Million.

It would also require that the Royal Air Force's budget be cut by £4,260 Million to £2,840Million.

The magnitude of those cuts can be envisaged by playing a game of "Fantasy Defence Cuts" with the budgets which can be found in this post.

Hours of fun can be had trying to cut the above sums from the navy and air force budgets whilst still trying to retain a modicum of military capability.


Martin said...

The budget gap only seems to exist if we factor in every program that exists to be procured in the next 10 years. Also assuming no increase in expenditure. Looks like the Army will loose FRES at a cost of £16 billion which should make a big dent. I really don't think the cuts will be that bad and while most of the army is safe until 2015 the heavy armour and British forces Germany may be trimed in the interim. Fingers crossed about SDSR. I think heavy cuts to the military would be enough to split an already fragile coallition. Easier to jsut come up with a white was and put everything off until 2015 when hopefully the budget will look a bit better.

GrandLogistics said...

Hello Martin,

Future Rapid Effects System is something which should have been cancelled a long time ago.
It is one of the worst thought out armoured vehicle projects since someone invented the "cruiser tank".
I think many armoured vehicles in service today should have been replaced a long time ago.
But I would rather wait a little longer than see the army operating the wrong vehicle for the next 40-50 years.

I wrote this post to get across the point that blaming big navy cuts on the aircraft carriers is nonsense.

Even the most modest cuts to the budget would equate to many times the cost of both carriers.