Budget and updates

Budget: a simple explanation of the defence situation

The Budget 2013 brings further pain to the armed forces, with a reduction of 249 millions in 2013/14 and 247 millions in 2014/15. 

These cuts are in addition to the Autumn Statement reductions of 250 and 490 millions, and in total mean that over the next two financial years the MOD is seeing its funding reduced by roughly 1.3 billion pounds, making it (once more) one of the biggest contributors to spending cuts, regardless of the disproportionate damage that such cuts (relatively tiny in comparison to wider government spending) have on military capability. 

The MOD has been given permission to carry over into the next two financial years the huge underspend of the year 2012, accounting for between 1.5 and 1.6 billion pounds. 

This may look good on the Chancellor's spreadsheet, but it does not represent a particularly good item of news for the MOD. 500 millions out of that figure were unallocated money built in the 2012 budget, which was not used. It will now be clawed back by the Treasury with the new wave of cuts. This is a relatively neutral budget measure, in theory, but the MOD naturally was hoping to be able to employ that money in the coming financial years to cover some of the many requirements that remain without a budget. 

Potentially much worse is the fact that the remaining one billion of "underspend" is made up by money which was originally reserved for very specific needs: 500 millions were planned to be spent on ongoing equipment programmes, but weren't use in 2012 because of changed programme timelines. We have to assume that this money will still be needed in the coming years, however.

Similarly, the remaining 500 millions had been set aside to cover the costs of industrial liabilities and redundancy payments connected to equipment and manpower cuts. They ended up not being needed over the course of the year 2012, but we can safely assume that most, or all of this money will need to be used in coming years.

In practice, the MOD is carrying over 1.6 billion of which up to 1 billion was needed (and planned to be used) for several voices of expenditure. 

The MOD also has roughly 200 millions of uncommitted money in the 2013 budget and 200 millions in the 2014 budget. 

The 1.3 billion cut can be managed without eating into the Contingency money and the 8 billion uncommitted money for the White Board list of future programs, but it is going to be more of a problem than the Government wants you to believe. 

Using the carried-over 2012 underspend and the uncommitted in-year reserves, the MOD can probably manage. Just. 

However, there's up to 1 billion of expenses that the MOD hoped to cover with the 2012 underspend, and if all of that expenditure does indeed come up, the ministry will have to eat away all the contingency money built into the next two financial years and still have to find up to 300 millions from within its accounts.   

The Treasury is also cutting 300 millions from the Treasury Special Reserve which pays for Afghanistan operations. This is made possible by the accelerated withdrawal of combat troops. 

Such war expenditure fell from £3.777 billion in 2010-11 to £3.458 billion in 2011-12. In December last year, the MOD estimated the war costs for 2013 to go down all the way to 2.5 billion: it is not clear at the moment if the 300 millions removed from the Treasury are part of the planned reduction in spending or in addition to that original target. 

In any case, it is to be hoped that such reductions does not damage the forces on the ground and the withdrawal of equipment and stores back to the UK, which is also going to be funded by this Campaign budget. 

The real battle for the future of the Armed Forces will be fought to ensure the Treasury does not slash the baseline budget for the MOD for the spending period starting in 2015/16. The assumption is that the MOD will get a general budget flat in real terms, with a 1% uplift to the sole equipment budget. The uplift seems safe, but the Treasury will no doubt seek to calculate a lower than promised baseline budget for the MOD, and if it does, the impact will be devastating. 

Unfortunately, Osborne's words from yesterday's announcement read: 

Departmental budgets have yet to be set for the year 2015-16, which starts before the end of this Parliament. This will be done in the spending round that will be set out on 26 June. I said last autumn that we would require around £10 billion of savings from that spending round. I confirm today that we will instead be seeking £11.5 billion of current savings. We have got to go on making difficult decisions so that Britain can live within its means. And because we make those decisions, we can get our deficit down and focus on our nation’s economic priorities.

Total managed expenditure for 2015-16 will be set at £745 billion. How the savings will be achieved will be a matter for the spending round, but existing protections apply. We are also taking steps to help all Departments to achieve the savings required. Together, my right hon. Friends the Chief Secretary and the Minister for the Cabinet Office have indentified that a further £5 billion of savings in efficiency and cutting the cost of administration can be made. This will go a huge way towards delivering the spending round in a way that saves money but protects services.

So too will action on pay. The Government will extend the restraint on public sector pay for a further year by limiting increases to an average of up to 1% in 2015-16. This will apply to the civil service and work forces with pay review bodies. Local government and devolved Administration budgets will be adjusted accordingly in the spending round. We will also seek substantial savings from what is called progression pay. These are the annual increases in the pay of some parts of the public sector. I think they are difficult to justify when others in the public sector, and millions more in the private sector, have seen pay frozen or even cut. I know that is tough, but it is fair. In difficult times with the inevitable trade-off between paying people more and saving jobs, we should put jobs first.

The crux of the matter is that "existing protections apply". That is almost certainly going to condemn the MOD to further, devastating cuts that the armed forces are simply no longer able to absorb. Worse, those devastating cuts are unlikely to significantly change the country's financial situation. You cannot fix the economy of the nation if you refuse to touch departments that represent some of your biggest voices of expenditure. It is impopular? Oh yeah, probably. But you have to do it all the same. You can't fix things destroying the small to tiny budgets while protecting to the end the huge budgets. 

Typhoon progresses 

The Typhoon Tranche 1 is receiving the Drop 2 upgrades, after they were trialed and evaluated on the nine aircrafts the RAF sent to the Red Flag exercise in the US. 

The Drop 3 upgrade for the Tranche 1 aircrafts is already undergoing flight testing, and a Drop 4 is also planned. It is not clear if these upgrades mean the RAF is indeed going to retain its Tranche 1s for the time being, equipping six or seven squadrons with Typhoons to keep the frontline relevant, but i can only hope it is the case. This plan, a dramatic rethink of the long-standing idea of retiring all Tranche 1 Typhoons by 2019, maintaining only 107 aircrafts in 5 frontline squadrons, has been in the rumors for a while, ever since sources such as Jane’s and Combat Aircrafts Monthly reported about it.

The “Drop” approach is a RAF idea to keep the Tranche 1 aircrafts relevant despite their official, four-national plan of development having been finished, as planned, with the Block 5 software release.

Work on the Tranche 1 aircrafts was expected to end then, and all Eurofighter development activities would focus on Tranche 2 and Tranche 3 only. The RAF and BAE, however, have collaborated to develop Drops of improvements, and the other Eurofighter countries have now joined in the development programme. Hopefully, this will allow the Tranche 1 to serve for a much longer time than initially envisaged.

Meanwhile, the first Tranche 3A Typhoon is being tested in the anechoic chamber, and the day of its delivery draws near. Tranche 3A aircrafts incorporate many advancements and improvements, and are ready for the fitting of AESA radar and Conformal Fuel Tanks, both of which have the RAF’s attention.

An excellent article on the future of Typhoon was recently published by the Royal Aeronautical Society, and you really don’t want to miss it, so click on the link straight away. 

Conformals, Meteors and Storm Shadow missiles. In time, this is how the Typhoon could go to war

The Phase 1 Enhancement will be complete by February next year, when the upgrade P1EB will be rolled out on the fleet. The P1EA part of the upgrade has been fully developed and trialed and will be rolled out in the next few months: this will enable the RAF Typhoons (not the Tranche 1, though) to finally use the Paveway IV bomb. Software and hardware improvements are also included in the enhancement package, which will finally make of the Typhoon a true swing-role fighter, opening up the capability to simultaneously employ Air to Air and Air to Ground weaponry. The Helmet Mounted Display is also getting its air to ground mode, enabling pilots to sled the laser targeting pod on targets on the ground simply looking at them.

The Typhoon will acquire complex attack capabilities: it will be able to engage simultaneously four targets with six bombs, or to attack one or multiple targets with multiple weapons having each different attack patterns and parameters. HOTAS commands will be doubled, from 60 to 120, and the autopilot and Direct Voice Data Imput will be improved and expanded to reduce pilot workload even in complex fighting.  

There will also be upgrades to the IFF, Defensive Aids (DASS) and communications.

The Phase 2 Enhancement programme is being planned out. Meteor integration, ASRAAM improvements and Storm Shadow are high on the list of priorities. Storm Shadow, in particular, is now seen as the main focus of the next enhancements, also because partners such as Saudi Arabia are impatient to get the missile.

The first flight of a Typhoon fitted with Storm Shadow missiles is expected this year, with the aim of putting the capability in service by 2015/16. It has been suggested that Saudi Arabia is urging a faster integration, aiming for 2014.

The full integration of Meteor has instead been delayed to 2017, as the NAO 2012 report noted. 

BS116, the first Typhoon Tranche 3, shows the small "bumps" where the Conformal Fuel Tanks will be installed.

Early tests to design the Conformal Fuel Tanks.

The notional calendar for the Phase 2 Enhancement was to see a focus on improved air dominance capability in the 2014/15 timeframe, with Meteor integration and ASRAAM improvements, but the delay imposed to the Meteor and the urgency accorded to Storm Shadow has probably changed things significantly.

In the 2015/16 period, the ground attack capabilities of the Typhoon should be expanded significantly. Some customers (Saudi Arabia, it has been suggested) have required an anti-shipping attack capability as well: for the UK, the focus will almost certainly be on integration of Brimstone 2 and Storm Shadow.

In the same period, the AESA radar will finally begin to be available, and depending on how funding will be released, it is expected that all capabilities will be demonstrated and integrated, in time to reach Full Operational Capability in 2018. This target is very important for the RAF, considering the March 2019 withdrawal date for the Tornado GR4. 

Meanwhile, works continue at Lossiemouth to enable the transfer of the Typhoons squadrons and QRA service from Leuchars. 
1 Hangar Annexes are being refurbished to enable 6 Squadron to move in by December this year. The Hangar number 3 is being prepared for the arrival of 1 Squadron instead. 
A Typhoon Availability Service (TAS) building is planned, which will host maintenance and support mostly carried out by BAE personnel. A facility will also be built for Rolls Royce personnel and equipment supporting the availability of the EJ200 engines and the C4I Squadron infrastructure on the base will be expanded to take in the Ground Support System for the Typhoon.  

Tornado GR4’s last updates

The Tornado GR4s are getting their last updates, as their planned retirement date draws near. A number of Helmet Mounted Cueing Systems have been acquired for use in Afghanistan but are available for use on the wider fleet. The Tornado has benefitted of UORs which have expanded its self-protection capability, thanks to the Advanced IR Counter Measures (AIRCM) pod (a customised version of Terma's Modular Countermeasures Pod/MCP) and its communications capability, but it has also finally been getting the SCOT (Secure Communications On Tornado) package, a software-defined radio system embodying the Have Quick II waveform used for air-ground communications with JTACs and other waveforms including SATURN (Anti-jam Tactical UHF). 

Took a long time, but the Tornado GR4 is better equipped than ever thanks to Terma pods, TIEC and SCOT

An extremely relevant update which has been in the works for years, the TIEC (Tactical Information Exchange Capability), is finally being rolled out onto the frontline fleet. The TIEC, which first flew on Tornado in 2010, will finally introduce a tactical data link 16 capability on the GR4 fleet.

The lack of data link has been one of the biggest limitations to the Tornado’s capability in recent times. Over Libya, the problem was mitigated by pairing Typhoons (fitted with full Data Link 16 capability) to the Tornado GR4. The Typhoon crews would share on the radio the information coming to them via data link.

Now, thanks to SCOT and TIEC, the GR4 will finally be networked in. 

F35 updates

The first british squadron on the F35 will be 17 Sqn, which will work as joint RAF/RN Operational Evaluation Unit. The squadron is currently mounted on Typhoons, but it will “merge” this April with 41 Sqn, the multi-type RAF Test and Evaluation Squadron, which will thus fly with Typhoons and Tornado.

17 Sqn will then reform, in the USA, with the F35B. The first frontline squadron on F35B will be 617 Sqn, and it is expected to stand up on the new type in 2018. In spring next year, 17 Sqn will be operational at Edwards AFB, in the USA, where the first two or three british F35Bs will be based, serving as part of the Operational Evaluation Fleet.

Not far away, at Yuma, the US Marines are standing up their first operational F35B squadron (VMFA(AW)-121) and conducting their own Operational Evaluation with the squadrons VMX-22 and MAWTS-1. The VMX-22 squadron introduced the MV-22 Osprey to service, while the Marine Aviation Weapons and Tactics Squadron MAWTS-1 will work to develop training and tactics for the F35B, inserting it in the Marines’ air force, getting it to work in complex environments alongside Prowlers, F/A-18s, Hueys, Cobra and all other aircrafts part of the USMC arsenal.

The british OE squadron will as a consequence be in the best possible place to gain access to a huge amount of knowledge on how best to employ the new aircraft.

The third british F35B will not be delivered before April, and it will initially move out to Eglin AFB. We will by then learn if this aircraft will be part of the Eglin-based training fleet or if it will also move to Edwards.

The F35B plan, in fact, includes having a training fleet of 6 jets based at the Eglin training centre, alongside the USMC F35B training squadron.

The jets based at Edwards will be busy in Operational Evaluation until 2015/16 at least. Afterwards, they’ll possibly move back to Eglin to be part of the training fleet: it is not yet clear.  

At least a second frontline squadron will stand up with part of the 48 aircrafts to be acquired as part of the 10-year budget, and the expectation is for this second unit to wear Fleet Air Arm colors. It is to be hoped that a third squadron can be squeezed out of the fleet, though.

The british order book so far includes 2 aircrafts delivered, one soon to be delivered, a fourth ordered as part of the LRIP7 and four more in the LRIP8.   

In an interview to a specialized Italian publication, the Italian General Defence Secretary, general Claudio Debertolis, revealed that the british MOD has launched the studies for the integration of the Meteor on the F35 and has formally asked Italy to join a common integration programme. According to Debertolis, the cost would be of about 100 million euro for each country, and Italy is “evaluating its options”.  

UK and MBDA hoping in good decisions

2013 is going to be a very important year for MBDA, which waits and hopes for a series of important decisions to be made by several countries.

As mentioned above, a decision is expected rather urgently from the UK and, hopefully, Italy, regarding the go-ahead order for the integration of the Meteor missile on the F35. A decision made rapidly would allow both countries to insert the missile in the list of requirements for the Block IV development of the Joint Strike Fighter. The requirements for the F35 Block IV are expected to be finalized soon.

MBDA, and the UK MOD as well, are also impatiently waiting for the French defence White Paper, which should be published by mid April. The planning document will determine the fate of the FASGW(H) missile destined to the Royal Navy Wildcat helicopters, and it will have an impact on other cooperation programs including Aster, Storm Shadow mid-life upgrade and on the joint development of a new MALE unmanned aircraft, which is effectively stalled and motionless in absence of a firm commitment from Paris.

More promising is the situation of other possible cooperations, including future generation unmanned mine countermeasure drones for use at sea, the Future Combat Air System UCAV for the 2030s, and possible future joint satellite communications programs. These are generally seen as more secure, also because decisions on them are less urgently needed. 



Army 2020 full overview  

I'm not done working and studying on the Army 2020 plan, and i will certainly write more about it in good time. But you can access excellently informative documents thanks to AFF, which has a document ten times better then the ministerial announcement available from the MOD. This document also lists out how battalions and regiments are assigned to the various commands: http://www.aff.org.uk/latest_news_information.htm#rebasing

Among the news, the passage of the Royal Artillery air defence regiments under Air Command control, presumably meaning that the 57-strong HQ Joint Ground Based Air Defence, already based at High Wycombe, will become essentially a light blue affair. 
Second loss to the RAF for the Army, after the passage of the whole CBRN role to the RAF Regiment. 
My expectations regarding the Intelligence and Surveillance Brigade have been proven entirely right, as 5, 32 and 47 Regiments Royal Artillery, plus 14 Signal Regiment (Electronic Warfare) have been resubordinated to this command. 

I continue to most vehemently contest the decision to put all artillery, logistic and engineer formations under formal command of the Artillery, Engineer and Logistics brigades. I continue to think that no advantage at all can come from this arrangement. 
I also personally entirely disagree with the creation of a new 1-star command in the Military Police Brigade at Andover, especially since the expanded Provost service doesn't even get into the Military Police Brigade but remains under HQ Provost Marshal, meaning that yet another 1-star command has been preserved. With the creation of the Police brigade, at least they could have rationalized this aspect. 
I will write more in detail about these issues in the future, however.