The balanced books and the 10 years budget program - UPDATED

Philip Hammond has made his announcement about the MOD's finances. After the cuts, programme restructuring and changes and modifications and negotiations with the Treasury, the Ministry of Defence has announced that the next 10 years will see a committed equipment budget of 152 billion pounds, inclusive, for the first time ever, of a 4 billions centrally-held reserve.
In addition, there are 8 billions of money as yet unallocated, which will be available to respond to emerging equipment requirements.
This includes the promised 1% equipment budget uplift from 2015.

Given this financial horizon and certainty, the MOD is guaranteeing the delivery of a number of projects which will be funded and given the go ahead:

- The 14 new Chinooks (2 are replacement for Afghanistan losses)
- 4.5 billion pounds in new armoured vehicles (FRES SV, Foxhound, probably expenditure on vehicles brought from UOR to core and, hopefully, the kick-start, around 2016, of the process for a new FRES UV effort) [Note: this is not a novelty, and the armour budget situation has been clear since late 2011. See my earlier article "5.5 billions, 10 years and many programs" for an accurate breakdown of the situation]
- 1 billion pounds for the Warrior upgrade programme (in-service date by 2020 with IOC in 2018)
- Complete building of both CVF aircraft carriers in STOVL arrangement
- Complete the Type 45 acquisition program
- Complete the 7- boats Astute program
- The Type 26 program will go ahead
- Go ahead with the Successor Submarine program for replacing the Vanguard SSBNs from 2028
- Apache life-extension (probably to include Block III upgrades) 
- Puma upgrade confirmed (22 helicopters to enter service)
- Wildcat helicopters (the order should be adjusted to procure 28 Naval Wildcats, 8 Special Forces "Light Assault Helicopter" Wildcats and 30 Army reconnaissance Wildcats)
- Merlin HC3 mid-life upgrade and assesment phase for its navalization (only the assesment phase...? This might be specific to Planning Round 12, unless i'm missing something: the Merlin HC3 should replace the Sea King HC4 by 2016, so there is not that much time to lose. This year the assesment phase should be launched, and then rather swiftly advanced in order to meet the 2016 date)
- A400M Atlas (22 to be procured)
- Voyager confirmed as well (9 in service as core fleet + 5 on call)
- Rivet Joint purchase confirmed (3 airplanes, under AIRSEEKER program, as Nimrod R1 replacement) 
- The 8th C17 already announced
- An ungodly 7 billions for the Complex Weapons initiative (7 billions...??? I wish we had some more details, this seems way too high a budget for the initiatives launched and/or planned this far)  

In addition, 4 billion pounds are to be committed into ISTAR, communications and intelligence projects: the MOD announcement includes SOLOMON (ground ISTAR data dissemination and fusion), Cipher crypto security management infrastructure program, the Falcon joint tactical communications trunk equipment which is entering service in its latest variant with the Army and RAF, DCNS (Defence Core Network Services) and, very importantly, CROWSNEST is also specifically mentioned, meaning that, finally, funding for the AEW platform and solution for the Navy should be made available. The target is to replace the Sea King MK7, hopefully without a "capability holiday" in the middle (the MK7 is now expected to go in 2016, CROWSNEST might not deliver before 2020 or even 2022 unless things are now adjusted), especially considering that the only great thing of an helicopter-based AEW solution is that it does not need a big carrier to operate, but just a rather standard flight deck.
The Navy has already lost fixed wing capability until 2020, losing AEW as well would be terrible. And it would be a spit in the face of experience paid with the blood of who died in the Falklands, in no small part due to the lack of airborne early warning. 


A surprise is the announcement that the MOD will purchase the three River class patrol vessels of the Fishery protection squadron (HMS Tyne, HMS Severn and HMS Mersey). These ships have so far operated under a leasing renewed every 5 years, with VT responsible of logistics and mainteinance during each charter period, with the aim of providing a minimum of 275 days at sea per ship.
The arrangement, as far as i know, always worked well, but evidently spreadsheet Phil has determined that purchasing the vessels once and for all should cost less. However, there's no news of change for HMS Clyde, the Falklands patrol vessel which is a ship derived from the basic River design and is also leased, but from BAE.
So the whole idea leaves some real doubts in me. Can i say, honestly, that the purchase of an additional OPV, or indeed a long term solution to the problem of the Antarctic patrol vessel (repair Endurance, or scrap her? Purchase Protector at the end of the current lease? What to do?) would have been a better use of the money?
Unfortunately, no one in the House had enough knowledge of the subject to think about asking explanations on this particular announcement. "Buying ships" always sounds like a good thing, after all: however, in this particular case we should carefully consider if it really is necessary and cost-effective to do so. 

The MOD is wasting no words with their announcement, as the following point proves: capability enhancements for the Typhoon are confirmed.
Nice. But which enhancements? We are waiting to have news regarding the integration of Brimstone, Storm Shadow and perhaps Paveway III, and we know the RAF wants AESA radar and Conformal Fuel Tanks in the future, at least on the Tranche 3 Typhoons, but the announcement tells positively nothing of what is incoming, nor about when it will arrive.
I'll keep my eyes open to catch any hint of what is to come, and i'll update this article and list as soon as i find out something meaningful. 

More money is to go in simulators, logistics and basing upgrades connected to the new airplanes being put in service, from Voyager to F35, but this is frankly little news: it is an inevitable component of any major acquisition programme that gives you a new piece of kit to support.

Regarding Maritime Patrol Aircraft, any decision is delayed at least until SDSR 2015, but at least Hammond says that the re-generation of MPA capability will be on the list of options for the use of the 8 billion "headroom" in the budget.
Hopefully one billion or so can be allocated to the regeneration of this capability, which remains essential.

Hammond said:

"There will be additional commitments in the future from the 8 billion pounds, releases from unused contingency, the reserve in the core budget and from savings made by delegated budget holders." 

Budget holders, as part of the defence reform, should be the heads of the three services and, for C4I and ISTAR and other joint kit, the new Joint Forces Commander. This should give the services better control on their priorities and on the use of money. As part of the reform, budget planning should now be done in annual cycles, and not in planning rounds. 

Defence research funding to stay at 1.2%. Wouldn't have been bad to grow that figure a little, but at least there's no further reductions in sight.

Work on accommodations for the forces, which has been delayed to 2014, will not be brought forwards. 2014 is and will be.


There is no turning back on the 82.000 stong army, or on the manpower reductions to Navy and RAF, but at least there's the promise of no more cuts in addition to these reductions.
At least until the SDSR 2015, eventually carried out by a different government which might well decide to throw everything to hell anyway, obviously. But this is another story. 

Some battalions from the large regiments will vanish, this is definite. Regiments of infantry are all expected to stay, though. In Hammond's words:

“Some of the multi-battalion regiments will have to lose a battalion in order that we can take this number of troops out of the army.”

The Royal Regiment of Scotland, the Rifles, Yorkshire and Mercian regiments are those most likely to "contribute" to the manpower cutting, as they are the formations with the most battalions. The Guards have also been considered for cuts, but i continue to believe it is unlikely that this government will ever dare announcing the disbandment of the oldest regiment of the Army, the Coldstream Guards, and even less would they target the Scots Guards.
Cuts to RLC, Signals, Engineers, RAC and Royal Artillery will also be part of the sad story, with some of the cuts already announced and implemented. 
We still don't have the details, however, so it is prudent, and respectful, not to speculate too much on who might get the chop. These are times of uncertainty for people as passionate as me, but we can all imagine how much worse it must be for service personnel living in the uncertainty and with the worry of being made redundant.

Hammond, however, unsurprisingly rubbished recent press claims that announced he was about to order the British Army to abandon all regimental names by 2013 (it had been suggested, namely, that such a move would turn 3 Scots - The Black Watch into 3 Scots only, cutting the last vestiges of history out of the already mutilated army). I had read the reports on the press about this move, but never accepted it as possible. If you think about it, cancelling the historic names does not save a penny, while it buys hate in tons. Anyone suggesting such a move can be only one of the following things: a reporter short of actual stories, or a wannabe (political) suicide.  

Hammond's words in facts go:

“I know people feel very strongly about this issue and I understand why. The key thing is protecting the regimental structure.
“In some cases, cap badges of old traditional regiments that have long since gone have been attached to battalion names and I understand that there will be concerns about protecting those cap badge names if we have to take out battalions.
“We will look to do everything we can to protect them.”

Apparently, there is a current that pushes these words to rather ridiculous heights, suggesting that 3 Scots could become "Black Watch and Argyl and Sutherlands Highlanders" to preserve the identity of the 5 Scots battalion if it effectively goes.
We'll see what happens. 

The 10 Years budget is now being analysed by the National Audit Office, and once the NAO validates it, it will be published in Summary form. It won't, for obvious reasons, go too in deep with details, but hopefully it'll say enough to enable us to have a far clearer picture of the situation in our minds.

As for information, I have made it clear that once the National Audit Office has completed its review, we will publish its report and a summary-level equipment plan, with the same level of detail in it as has routinely been published about the defence budget. That may not be the level of detail that the hon. Gentleman would like, but it just is not possible, for security reasons and for commercial reasons, to publish a 10-year programme in minute detail without making the situation that the MOD faces impossible.

Hammond has however also said in Parliament that an updated announcement on basing, mainly for the Army, isn't likely to arrive before around year's end. The wait will still be long for some of the information we seek.