Friday, February 1, 2013

Is that all...?

The 10-year equipment program came out, and the document frankly reveals very little we didn't already know. It validates what i had reported already in December last year in my article on the Budget, and essentially only adds a breakdown of the amounts, showing in graphics what money goes to cover exhisting equipment support costs and what goes to procurement of new kit, breaking it down further into the main "areas", from Submarines and Nuclear Deterrent to Complex Weapons.
Again, this is not completely new information, as the MOD Top Level messages have been showing the rough amounts for months, so much so that i was publishing the figures on this blog in June. 

The plan is incredibly disappointing in that it provides no further indication of what the budget is paying for. I appreciate the kind answers of Peter Luff, who took the time to speak with me over Twitter about the plan, but i sincerely struggle to believe that security and commercial sensitivity reasons demand the plan to say, basically, nothing
I just can't understand why most nations, from US to France passing from even muddleheaded Italy can publish detailed procurement plans and lists of requirements to inform their parliaments about what is being made available to the armed forces, while the UK MOD says mostly nothing all the time, with planning rounds passing by without ever being reported about.
Surely there is at least an happy medium between "nothing" and "all", with "all" being the US reports on defence programs, which really are astonishingly open and detailed. 

I'm especially "amused" (not) by how this plan was announced time ago as a way to help industry know what programs were ahead, and what they could confidently plan upon. The document provides no clarity at all. Not a single program is detailed, and the few voices that are mentioned mostly date back all the way to the SDR 1998 and are already contracted for and on the way.
One has to hope that industry is being privately briefed or something, because, seriously, what does it mean:

continuing investment in Typhoon to bring Tranche 2 & 3 aircraft fully into service. Further investment to develop and enhance the aircraft’s multi-role and ISTAR capabilities are priorities for use of unallocated headroom in the plan budget;

What has been decided regarding Typhoon Tranche 1's future? Will they go by 2019, or is their reprieve confirmed?
What multi-role capabilities are you planning to add, and when, at least in rough terms? Conformal Fuel Tanks remain envisaged? What about the AESA radar? Will you please say something.

Or another pearl,

a growing investment in unmanned aerial vehicles, including through co-operation with

Yes. So, what? 

Then you go on reading, and you find the definition of Core Equipment Program, and learn that it is composed by the following elements:

- The nuclear deterrent 
- Programs already contracted for
- Support costs for existing and future equipment
- Publicly announced purchases
- Policy committments

And one is very tempted to think that the reason why government never says a thing about what the Armed Forces are trying to acquire is just that, if they do not name anything, they can cancel, defer and ignore requirements without risking to lose their face in front of the public and in front of parliament. 
I guess they've had enough with writing an SDSR that promised an Army with a strenght of 95.000 regulars in 2015 and 94.000 in 2020 [page 32, bottom left of the SDSR document] only to betray that policy committment a few months later cutting a further 12.000.
Other pearls include naming a fleet of 67 Apaches in the SDSR, while it has recently emerged that the Army Air Corps is already being told to plan a possible reduction from 6 to 4 frontline squadrons because they can expect a part of the fleet to go in exchance for the Mid Life Upgrade needed by the helicopter. 
Or writing in 2010 that the RN would have 6 strategic sealift RoRo ships, only to cut two of them out of the PFI contract months later (in 2011), revealing it only in a Written Answer in early 2013.

Anyway, the few observations that can be made regarding the 10-year plan (period 2012/13 to 2021/22) are the following.

The "160 billion" figure breaks down in this way:

- 147 billion for the Core Equipment 
- 4.8 billions of centrally-held reserve money to cover cost growth 
- 8 billions of uncommitted money, to be used mainly after 2015 to finance a series of High   Priority programs that sit on the so called "White Board"  

The Core Equipment budget figure is composed of: 

60 billions for procurement of new equipment (includes 8.4 billions of "risk money" allocated within the various programs to cover unexpected cost growth and changes)

18 billions for support of new equipment

68 billions for the support of existing kit

The 147 billion Core Equipment Budget is broken down further, into the main areas of expenditure:

(NOTE: the money figures provided are for Procurement and Support of new equipment, and support of existing kit)

17.4 billion for Surface Ships 
35.8 for submarines and the nuclear deterrent (7 Astutes, activities on the new SSBN with assumption that four vessels will be built, some money for the Future Maritime Underwater Capability studies which will one day shape the replacement for Astute)
12.3 billion for land equipment (including 5.5 billion for armored vehicles)
18.5 billion for combat air (Typhoon and F35)
13.9 billion for air support (including expenditure for Voyager, A400 and AIRSEEKER)
12.1 billion for helicopters (including Puma HC2, JULIUS upgrade for existing Chinooks, delivery of 14 HC6 Chinooks, Wildcat, Merlin HM2, Merlin HC3 life extension and navalisation, Apache CSP)
11.4 billion for Complex Weapons (SPEAR program, Future Local Area Air Defence System, Indirect Fire Precision Attack capability) 
15.7 billion for Information Systems (Bowman Tactical Communications and Information Systems, Defence Information Infrastructure)
4.4 billion for ISTAR (Fixed and deployable communication networks, suggesting FALCON is part of this voice, Crowsnest, drones including SCAVENGER, but also CBRN detection and countermeasures and special forces gear. A very crowded voice of expenditure...)
5.6 billion for other voices of expenditure (Naval Bases, Joint Supply Chain, Logistics & Commodities, Safety & Engineering)

NOTE: the figures are approximated and will not precisely add up to form the various 147, 160 or other totals.

80% of the Core Budget is already firmly committed out to 2015, due to the many ongoing big-ticket contracts, most of which have been signed literally years ago: Type 45, Typhoon, Astute submarines, CVF, FALCON, Bowman and so along.
The amount of contractually committed money in the Core Budget falls dramatically from 2015 to 2022, to just around 20%. The rest is money allocated to firmly planned items which haven't yet seen contracts signed (F35B purchases, Type 26 frigates and Successor SSBN submarines program being good examples).

In addition, from 2015 there will be 8 billions of headroom available to committ to further high priority programs.

The Equipment budget contains 4.7 billion pounds of money obtained from cuts and efficiencies delivered elsewhere within the MOD (manpower, estate etcetera). In part because of this, the Equipment budget will grow in relevance: in 2012/13 the Equipment budget represents 39% of the MOD's expenditure, and it will rise to 45% by 2022.

What the National Audit Office underlines, it that the 10-year budget remains extremely sensitive. It is enough to have a 1% reduction in the assumed budget to lose 4.4 billion pounds in cash terms, almost the whole of the Contingency Reserve.
A 0.5% inflation growth, similarly, would add 3.7 billion in extra costs.
So it is absolutely vital that the Treasury is not allowed to tamper with the budget that has been promised to the MOD and has been used to put together the plan.

The MOD has been told to plan on the basis of a budget that will stay flat in real terms over the decade [which actually means a real term growth due to an assumed 2.7% inflation per year, a measure used for all government departments] with a localized uplift of 1% to the sole equipment budget after 2015 and out to 2021/22.
The risk is, of course, that the Treasury will try to modify the arrangement to give the MOD less money, not necessarily by betraying the promise of the localized 1% uplift to equipment. It would be enough to calculate the flat overall budget for the second half of the decade on the basis of the 2015's MOD budget instead of on the 2010's one.
The Budget 2015 will be the one most affected by the Autumn Statement cut, so it represents a lower baseline from which to start. Using it as base for the later years could well mean having 700 millions to a billion less in each financial year.
Obviously, the MOD would be put in huge difficulties by such an arrangement, and further cuts would be needed.

Challenges, as it is obvious, remain. The Treasury is going to be a worse enemy than the Talibans in this crucial year in which the new Spending Review is written.
And in the meanwhile, we continue to know very little of what exactly the Armed Forces will or will not get. 



  1. Gaby

    Couldn't agree more with you about the general and vague nature of the plan. As you state, it allows the Government to cancel or postpone programmes almost at will. I expected much more detail than this. Ah well, the devious nature of politics!

    I did not know that only £5.5 billion was allowed for armoured vehicles out of a total of £12.3 billion for land equipment. I thought that that was all for armoured vehicles. What on earth can the rest be spent on? We have replaced all our logistics fleet, for instance.

    1. You knew, instead. You might not remember at the moment, but you read that on here. There's an article on the 5.5 billion figure, and i'm sure we've exchanged comments on it.

      That 5.5 billion figure covers essentially the Warrior Upgrade and (part of) FRES SV. I say part of because the revised OSD of CVR(T) to 2026 suggests that deliveries of FRES will begin possibly around 2017 and continue beyond 2021/22.
      In theory, the Challenger 2 CSP is also included in the Core budget, but we don't know for sure. It might actually be on the White Board, along with retention of UOR vehicles.

      There is not much left for other Land programs (such as the guided shell for the 155mm of the AS90, Fire Shadow, but also things such as the purchase of more EPLS to replace DROPS and the purchase of a new fleet to replace the current, ancient Light Equipment Transporter trucks and General Service Tankers.
      You have to remember that those 12.3 billion pounds include support costs for existing and new kit. Judging from the graphic in the document, for procurement of new kit there is just around 6 billions in total, and we know that 5.5 are for armor.

      The real question is not what the other 500 or so millions are buying, it's more like "what has had to be deferred/cancelled?"

      The above reasoning is valid for all voices in the list. Support costs invariably make up more than half of the figures.

    2. I highly doubt they are improving the Challenger 2.

      And what about the claim that there are Extended Range Guided Munitions coming.

    3. Both things have been promised.

    4. They better be. the SDSR said there can be less AS-90s as their firing range will be increased.


  2. Gaby

    "You might not remember at the moment, but you read that on here. There's an article on the 5.5 billion figure, and i'm sure we've exchanged comments on it."

    I'm sorry but I genuinely don't recollect the exchange. My memory is very short! I'll try to avoid repeating questions in future. As you say, not much money for other things.

    1. Don't worry, it is not at all a problem. Besides, it seems it wasn't you i spoke at lenght with about this aspect of the budget. Not on the original post, at least, since i still believe we've been talking in other occasions of the 5.5 billion figure.

      In any case, this is the (old) article in which i first covered the 5.5 billion figure.

  3. The whole point is ambiguity. That's the intention.

  4. Re-looking at the armoured brigade structure, why do you need 48 plus FRES Scout vehicles? Should a brigade need so many or are they to complement the Warrior and Mastiff battalions?

    1. It is a relatively high number, but nothing extraordinary. Without knowing the exact structure of the renewed Recce regiments, is hard to say if there is any significant planning assumption behind the number.

    2. Thanks. Also my predictions for the Type 56 Regiments differ from yours

      Royal Scout Dragoon Guards;
      Queen’s Royal Hussars;
      King Royal Hussars;

      What do you think?

    3. The 2nd Royal Tank is, i dare predicting, sure to be on Challenger 2, also because it is already based in Tidworth, Salisbury plain area, and is as a consequence exactly in the right place, where the army wants it to be.

      Same for the King's Royal Hussars.

      The Queen's Royal Hussars are in Germany, but are expected to go to Salisbury and be on Challenger 2. That means no RSDG.

    4. Ok Strange the calculations still dont match up.

      Did you see the wikipedia editing of which units will be the Mastiff 2 and Warrior regiments/battalions?

    5. Sorry to add on the Wikipedia article on Infantry

      1 Royal Irish will be under 16 BDE? Truth or rumour?

    6. No, i don't think i have, but for sure on Warrior there will be the 1st Royal Welsh battalion.

      Already based in the Salisbury area and mounted on Warrior, and thus expected to go on, are 1 Royal Regiment of Fusiliers and 3rd Yorks.

      Three more Warrior battalions are to be determined, as we don't yet know which battalions will lose their Warriors. I read that one battalion of the Royal Regiment of Scotland will be in the Reaction force, so that definitely points to 4 SCOTS, a Warrior unit currently based in Germany. I think that the Scots Guards, in exchange, will lose their Warriors as they are based in the "wrong place", so to speak.
      1 PWRR and 5 RIFLES could be the other two Warrior battalions, but this is my guess.

      The Mechanized infantry battalions are likely to include 4 RIFLES and 1st Royal Anglian, because they have already experience in the role and are already based in the Salisbury area. I don't know which battalion will become the third and last planned Mastiff formation.

    7. Thanks for the link.
      I've looked at the list, and it largely matches my expectations, but i disagree on the Scots Guards: the 1st Royal Welsh are already in Tidworth and the regiment officer confirmed in a letter that they will be on Warrior, in the reaction force.

      I'm also not sure about 1 Lancs, although it is possible it'll move to Salisbury to be the third mechanized formation.

      As for 1st Royal Irish, they currently are part of the brigade and have been moved under the control of Joint Helicopter Command.
      I hope it can stay as part of the brigade, but Army 2020 seems to suggest that this will not be the case, with only 2, 3 and 4 PARA in the brigade.

  5. Here's my list (differs from yours a bit):

    Challenger 2 Battalions (x3):

    Royal Scout Dragoon Guards;
    Queen’s Royal Hussars;
    King Royal Hussars;

    Warrior Armoured Infantry Battalions (x6):

    Scots Guards
    1st Battalion, Royal Regiment of Fusiliers
    3rd Battalion, Yorkshire Regiment
    5th Battalion, The Rifles
    4th Battalion, Royal Regiment of Scotland
    1st Battalion, Princess of Wales's Royal Regiment

    Reece Battalion, FRES SV (in the future) (x3)

    Queen’s Royal Lancers;
    Queen’s Dragoon Guards;
    Light Dragoons

    Mastiff Heavy Protected Battalions (x3):

    4th Battalion, The Rifles
    1st Battalion, Royal Anglican Regiment
    1st Battalion, Duke of Lancaster's Regiment (King's, Lancashire and Border)

    4 PARA--I think it will be just TA and not organic to 16 AA

    1. Have you got any information suggesting you the names, or is it a wild guess?

      On FRES SV there will be the Household Cavalry Regiment, the Royal Lancers and the Royal Dragoon Guards.

      4 PARA is of course TA, but has been reassigned and will be organic into 16 Air Assault Brigade. This is not in doubt, as it is official already.

    2. I was calculating based on unit's experience in Afghanistan especially for the Mastiff ones.

      So we're comforted by 16 AA getting at least 3 battalions? It's safe then?


    3. I'd like it more if it had 3 regular battalions and 4 PARA in addition to them.

    4. That's pushing it, well 3 CDO BDE is sort of at that level

    5. A deployable brigade should never have less than 3 regular maneuver units, period. 4 PARA is meant to provide support to the regular PARA battalions, and cannot be considered deployable as maneuver unit on its own.

    6. Yes but Brigades have been known to has 2 battalions only plus more support troops.

      Also, why do you see the Light Dragoos moving to Jackal when they've been Reconnaissance all their life? Where are your info on Salisbury plain units from?

    7. Binary brigades have existed, yes, but they have also always proven themselves ineffective. The most evident and recent case being the american Brigade Combat Team, which now the US Army intends to restructure on three maneuver battalions.

      Also, Jackal IS reconnaissance. Just on a vehicle lighter than FRES SV while having a comparable weight to the Scimitar.

      As for a list of the army units and their bases, i've been doing research. This written answer: will help you, but it does not include Royal Logistic Corps units, Military Intelligence battalions and others.

    8. Jackal to me lacks the abilities of a modern scout.


  6. Hi Gabriele,

    I have to agree with you on RSDG and on 3 units per brigade.
    In my ideal world, 5 would be best to allow for 6 month rotation.

    No chance that 1 PARA will return to 16 BDE post Afghan?


    1. No, i think it is absolutely not envisaged to have 1 PARA moving back.

  7. How do you calculate it will be named 1st Yorks and not 3rd Yorks?

    1. It has been announced by the Regiment itself:

  8. The harsh reality is that the wheels are already coming off the plan. Austerity is extended, the deficit still exists, and GDP growth is stagnant or worse. There are going to be more cuts and it is not going to be pretty.

  9. Gaby

    I have only just seen this news item. You might have seen it previously and, for all I know, have even discussed it in a thread.

    I saw a reference to a news item on British Forces News (BFBS) concerning which vehicles will be brought home from Afghanistan. The item was under the heading "Army" and is dated 6 February. The announcement was apparently made by a Lieut. General Adrian Bradshaw at the International Armoured Vehicles Trade Fair. The item is headed "Army to keep Afghanistan combat vehicles".

    Now my Flash player does not appear to work on this. Could you help by seeing which vehicles he mentions because this report seems to be at variance with some recent newspaper reports claiming that up to 40% of all vehicles will be left there!

    1. I've seen that, but i've not written an article because there isn't much that could be added, at the moment. The announcement is about what Bradshaw, new Commander Land Forces, said, and it says, precisely:

      Jackal, Coyote and Panther will be used in the 3 Light Cavalry regiments of Army 2020

      Mastiff, Ridgback, Husky and Jackals will also equip the 3 Mechanized Infantry battalions and Combat Support Units (Royal Logistic Corps, in practice).
      British Forces News failed to specifically mention Wolfhound while announcing this, but i'm 99% sure it will be part of the deal, as it is the most relevant vehicle for the Combat Support Units.

      PARAs and Royal Marines will "keep their Jackals". [wonder if this means a PARA Brigade Recce Force mounted on Jackal; perhaps a squadron within the Household Cavalry Regiment?]

      Foxhound will, as we already knew, go to the Light Protected Infantry battalions and "more could be bought" [over time, i'm sure there will be more].

      There was no mention of Warthog and Buffalo (part of Talisman). The High Mobility Engineer Excavator, another part of Talisman, wasn't mentioned either, but this one might go, as i read a 2008 document which said the Army considers it an interim solution while they wait for Terrier to enter service.

      Overall, it was a reassuring report. But i look forwards to hearing about Talisman and Warthog, hopefully soon.

  10. Gaby

    Well, thanks very much for you reply. Warthog was the one I really wanted to hear about, as I feel that type of all-terrain vehicle might be one of the very first the Army turns to if they have another out-of-area contingency in a desert area to deal with (highly likely before long if you ask me). Warthog would be the ideal vehicle for just such an operation.

    Still, as you have said, it does not really fit in easily with any formation in the Army at the moment. However, I think it should at least be kept in reserve. It is larger and better protected than Viking.

  11. @Gaby

    I see from several news sources this morning that the UK Government is to consider diverting money from the Dept. for International Development to the MOD to help in matters such as establishing security and stability.

    I must admit that I was incredibly cheered when I heard the news but then I discovered that the amount being considered was only £100 million. I expected billions! I don't know whether you have any views on what the extra money, if it materializes, might be spent on. 3 or 4 infantry battalions saved from the axe might be very nice!

    1. I read the report too, but even if they do it, i'm guessing the money at most will go to the stabilisation group, to finance collaboration and capacity building in countries such as Libya.
      We cannot expect that money to fund frontline units or help buying ships, i suspect.

  12. Gaby

    Many thanks for your reply.


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