Wednesday, January 14, 2015

The Equipment Plan and major projects report 2014

The new report by the NAO has been published, and reports about the shifting of some large sums of money within the 10 year plan. The spending profile 2014 - 2024 has shrunk by 1.4 billion compared to the 2013 - 2023 variant, but it is hard to estimate the actual impact of this change, especially since the Equipment Plan does not actually details projected acquisitions, but provides merely an indication of how much money will go towards the main spending areas.
Internal adjustements have been made, shifting several billions from the Equipment Support to the Equipment Procurement voice, betting on efficiencies and savings in support costs which have for now been achieved only in small part. The MOD will need to achieve savings of 6 billion pounds in equipment support budget in order to deliver the reworked acquisition spending profile without having to bite into the Contingency fund and to protect the Headroom money which is needed in the next strategic defence review to launch new programmes.

The NAO correctly cautions that there is still a lot of uncertainty about the future. We do not know if all the savings can be achieved and we have no certainty that cost in ongoing programmes won't grow above the forecasts. However, there is room for some optimism on this front, since the more prudent approach of the last few years has largely limited shocks and kept cost figures largely stable. This year's report, uniquely, actually documents a decrease of over 300 millions in costs, although this is not considering the cost growth reported in the past report stemming from the renegotiation of the Queen Elizabeth class contract.

The main danger to the equipment programme, and to defence in general, is anyway the new spending review and the new SDSR. The equipment plan, like all other manpower, capability and infrastructure targets of Future Force 2020, is completely dependent on the funding profile the MOD will be granted in the new parliament beginning May 2015.
The promised, but not confirmed budget flat in real terms with 1% boost to the sole equipment spending is absolutely crucial to enable a "steady as she goes" future for defence. And even if such an arrangement is granted, depending on the base budget figure over which the Flat line is calculated, negative differences of up to 15 billions are possible.
Any other cut would rapidly make the situation dramatic, and throw once more into disarray force structures, plans and equipment procurement, very possibly causing further damage by introducing cost growth in programmes affected by delays, reductions and descoping of various kind.

So, while the 2014 documents are all in all positive under many points of view, the future is at huge risk. I cannot stress enough the fact that for defence, in this year, the biggest and most important battles of all will be to obtain a budget as close to the assumption of Flat in Real Terms + 1% for equipment as possible. Whatever politicians will say in the coming months about defence will have absolutely no relevance at all until we don't get an indication of wheter they are committed to sticking to this indication they gave the MOD to plan upon or not.

There has been some media reporting about the 2% of GDP target for defence spending, and on the fact that it "might" be missed. Let me make it absolutely clear: as of now, there is no "might". The UK will soon fall well below the 2% point if the current budget trend stands. For how things are looking right now, a Flat budget is the best possible outcome in reach (and sadly it is actually widely expected that the MOD will not be given even just this minimum comfort), and it would still bring down the UK's defence spending to around 1.8% of GDP. It could fall down even further, and RUSI has already indicated that a landslide down to 1.5% is more than possible.
This is despite the UK being among the most vocal advocates for the agreement reached at the Cardiff NATO summit next year to pursue the 2% spending target across all european NATO countries in the next decade. Tell me what kind of ridicule it will be, in a few months time, to do exactly the opposite. Yet, it is what is bound to happen, especially since UK's GDP has been growing, and to maintain 2% spending it would actually take an increase to the budget.
Don't you worry though, the International Aid spending target of 0.7% of GDP, enshrined in law for some demented reason, is due to be met, by pouring yet more money into it. Doesn't that make you feel better...?

Defence spending has to stay at least stable, so that FF2020 can at least be pursued. Any reduction will bring yet more crippling damage into forces which have already been badly wrecked in several areas, causing a definitive loss of strategic weight and throwing everything into disarray again, before the 2010 cuts and reorganizations even have a chance to be completed. It will be another axe blow while the previous blade hasn't yet pulled out entirely from the wound.

"We trained very hard, but it seemed that every time we were beginning to form up in teams, we would be reorganised. I was to learn later in life that we tend to meet any new situation by reorganising, and a wonderful method it can be for creating an illusion of progress, while producing confusion, inefficiency and demoralisation."

This quote, traditionally dated all the way back to the times of Rome, is a perfect resume of what has been going on for too long in the british armed forces, where force structures and programmes have been messed up with again, and again, and again, for years. Every time, the SDR of the day has tried to sell the mess and dress up the cuts as a reorganisation for efficiency. As "doing more with less".
I can only beg whoever will form the next government to stop this state of things, and protect stability.

A look at the programmes

A summary of the most interesting bits about the status of individual programmes. 

Good news for the Astute class SSN, which seems to have finally turned the corner and got on the right course. The last big technical hurdle, the demonstration of the Top Speed requirement, has now been completed with success, the NAO reports. Up to last year's report, it was feared that at least the first 3 boats in the class would not be able to achieve the required Top Speed, although it was said that the trials were ongoing. As of March 2014, according to the NAO report, the requirement has been met.

Funding has been secured for a third "payload bay", which should actually mean a third CHALFONT dry deck shelter is being brought into service for use on the Astute class SSNs.

HMS Astute seen with CHALFONT installed

The purchase of a second Manoeuvring Training Room has been delayed to come in time with the delivery of the 4th boat, but the report assures that this will have no impact on current training requirements.
Important progress has been obtained by securing the Spearfish torpedo upgrade; the Astute Capability Sustainment Programme (not detailed, but presumably will retrofit some capabilities present at build from Boat 4 onto the earlier boats and is also expected to include new anti-torpedo countermeasures and other improvements); the integrated Communications and Radar Electronic Support Measures (CESM and RESM for Boat 4 onwards) and the Naval Extremely / Super High Frequency satcom system.

Excellent news, overall.

Complex Weapons are also treated in the NAO report, but there are no real answers about Fire Shadow, while other info, more up to date, is actually coming from other sources. DefenseNews has reported that the MOD has signed, just before Christmas, a 228 million pounds contract for the procurement of the Land variant of FLAADS, the new local area air defence system based on the CAMM / Sea Ceptor missile.
This early contract signature secures the replacement for Rapier althouth MBDA is still 6 months away from completing the work mandated by the earlier 36 million, 18-months demonstration phase deal.
Signing the contract earlier than planned might result in an earlier entry into service.

This development follows another report by DefenseNews which details how the MOD is seeking bids for the installation of a battle management, command, control, communications, computer and intelligence (BMC4I) system to deploy in defence of the Falklands Islands.
A contract should be signed in summer 2016 and the project is reportedly fully funded. The BMC4I is similar to the LEAPP system which is due to achieve operationally deployable status this year with the British Army. LEAPP is a mobile system operated by 49 independent Battery Royal Artillery as part of Joint Ground Based Air Defence. Under LEAPP, 4 "control nodes" in truck-mounted shelters have been procured, along with 3 "air picture trailers" and a single Link 11 access node, which is a specific requirement of the Royal Marines as it allows LEAPP to receive air picture data from warships via Link 11.
LEAPP provides land forces commanders with a full picture of what is moving in the air. Data is obtained by external sources, including Rapier batteries' search radars and Giraffe ABM radars (5 purchased) procured specifically to support LEAPP. Further information is obtained via air sources such as AWACS, via Data Link 16.

The Falklands system is expected to be very much similar, but the MOD has opened a competition for it, instead of ordering an additional LEAPP set. The Falklands system, though, will, like LEAPP, include a Giraffe ABM radar. The "shooting end" of the system will be a battery of FLAADS(L) missiles replacing the old and by now way too limited Rapier.

Inside a LEAPP node

Brimstone 2 is scheduled for live firing trials from Tornado GR4s at China Lake in the US later this year, ahead of achieving operational capability by November.

The first Type 23 frigate should have been re-armed with Sea Ceptor and should have fired the first missiles in trials by November 2016, which suggests that soon enough this year we will know which ship entering refit will be the first to get the new system.

FASGW is expected to deliver both Sea Venom (Heavy) and Martlet (Light) by October 2020. The Royal Navy looks set to have a gap of at least 2 years in the ability to fire anti-ship missiles from helicopters, as the Lynx HM8 and the Sea Skua missile should both be gone by 2018.

SPEAR 3 development continues, and the weapon should be operable before the the F-35 achieved entry in service. Whether this includes the weapon being integrated on the F-35 or not, it is not clear.

Fire Shadow's status is even more of a mystery. Asked about the matter, MBDA replied on Twitter that they remain engaged with the british army to determine the way forwards for the system.

Earlier news reports suggested that on the SPEAR 1 front, the evolution of Paveway IV, a go ahead for the bunker-buster variant should be officialized soon. As always, details are not provided, but it seems that when this variant becomes available, the RAF will withdraw from service the Paveway II and III series. I'm not entirely comfortable with remaining with only 500 lbs weapons, especially in the bunker buster role (i'm curious to learn if the 500 lbs special warhead of the Paveway IV really matches the performance of the 4 times heavier Paveway III Blu-109), but that seems to be the way things are headed.

A curious piece of news is mentioned in the Queen Elizabeth class part of the report where it is mentioned that the carrier is not fully funded to deliver the helicopter carrying role in support of littoral manoeuvre and currently has design and safety clearances limited in relation to amphibious helicopter support capability.
Sincerely, i have no idea what this is supposed to mean, and what is the current status of play: remember that, although published yesterday, the NAO report is a still image of the situation dating back several months.
Reading the book published in July in occasion of HMS Queen Elizabeth's naming ceremony, though, it becomes possible to make some guesses: the publication quotes rear admiral Fleet Air Arm Russ Harding, who is also Chief Naval Staff (Aviation and Carriers) as he explains what is being added to enable the carriers to undertake their littoral manoeuvre role. He said that a study had just been completed on how to modify the six spot deck arrangement planned for the deck layout to a 10 spot layout to enable enhanced helicopter assault operations. He also noticed that Ship / Helicopter Operating Limits (SHOL) have to be determined and written down, clearances will have to be obtained for Apache and Chinook, clearances will also have to be obtained for the Embarked Forces's and helicopter's ammunition stowage and that increasing accommodations and support spaces for embarked forces is something that is on the cards for the 1st docking period of Queen Elizabeth.
Some of these activities evidently haven't a funding line at the moment, but this will hopefully soon change, if it hasn't already from when the NAO was compiling its report.

Regarding the F-35B, the NAO report says that Main Gate 4 was passed in January. Main Gate 4 is a 2.75 billion programme to procure the aircraft needed for the first squadron (thought to be 14 airplanes, the first 4 of which have been ordered as part of LRIP 8) plus all supporting elements, including "facilities" to enable RAF Marham to stand up as Main Operating Base and initial support out to 2020. 
In absence of details it is difficult to evaluate this price figure and what it means for unitary cost of the aircraft. It really would be necessary to know exactly what "facilities" are included in the order. The UK has in fact opened a laboratory for F-35 software capability evaluation and development; while an Integrated Training Centre is planned to be built in Marham, which will require simulators, training aids and all associated F-35 specific elements. The UK is also planning to stand up a maintenance line inside a hangar in Marham, and a facility for application and maintenance of the stealth coating and its verification in another. The equipment for all these infrastructure elements is going to have a big pricetag.
The building of 3 vertical landing pads has been contracted, and Marham's runway is planned for a resurfacing as well, while existing hardened aircraft shelters will be prepared for the F-35 age. These other items, however, are probably included in infrastructure spending, not in F-35 spending.

Entry in service for the F-35B is planned for end december 2018. The UK has contributed 144 million to the assessment phase (down from a planned 150) and has budgeted a 1874 million contribution to development. In addition, just shy of a billion pounds has been budgeted for the first 4 aircraft and their activities in demonstration.
The 2749 million budget for Main Gate 4 brings the budget for demonstration and manufacture at 5622 million.

Typhoon progress includes ongoing work to integrate Storm Shadow and the capability to change target in flight, prior to launch. Meteor integration work is also progressing, and the first trial fits of Brimstone have been made.
In the RAF 2015 publication, the commander of the Typhoon force suggests that the next priority is getting funding to integrate RAPTOR, or a reconnaissance pod offering similar tactical imagery capability, to ensure that when Tornado goes out of service, the impact on capability is limited to numbers, instead of complete gaps.
On the other hand, funding for adding Conformal Fuel Tanks isn't likely to appear anytime soon.
AESA radar development is finally under contract, but there isn't, for now, a funded plan for retrofitting the radar to the Tranche 3A.

On MARS, it is confirmed that the Solid Support Ship requirement is on the White Board as it is not an item in the core budget. This means that its progress is inexorably tied to the billion pounds of Headroom money that the Navy is supposed to get from 2015.
The tanker programme seems to be going well, with the blocks for Tidespring already over 90% done in South Korea and first steel cut for the second ship, Tiderace. 

FRES SV coverage pre-dates the signing of the production contract, so information is pretty much outdated. A recent House of Lords written answer instead has specified that the FRES SV contract includes an initial support contract for 2 years, associated training systems and appliquè armour packages. General Dynamics has already awarded a 20 million contract to XPI Simulation to deliver 28 high fidelity simulators as driver training aids for all FRES SV variants.
Negotiations are still ongoing to see if production of the vehicles can be moved into the UK from Spain, where at least the first 100 vehicles out of 589 vehicles will be built.

Warrior CSP and ABSV continue to be difficult to understand. The NAO report seems to pre-date a reported formal separation of WCSP and ABSV in budget planning. ABSV was to hit Initial Gate in the third quarter of 2013, but the Army has been reviewing the ABSV requirement and approach to finally try and address the need to replace FV430 by harmonizing WCSP, FRES SV and ABSV.

The NAO quotes numbers that are weird and now most likely outdated anyway. According to the NAO, from an affordable fleet of 565 Warrior vehicles, 445 would be picked for undergoing upgrades under WCSP. 65 of those 445 vehicles would have been converted in APCs and Ambulances under ABSV, while the remaining 380 would consist of, probably, of around 250 Section vehicles with turret and 40mm gun, with the balance made up by Recovery and Repair vehicles.
This number would be completely insufficient to equip the planned six armoured infantry battalions. Considering also the need for a permanent training fleet, including a good number of vehicles to assign to BATUS, these numbers would probably only enable the fielding of 4 battalions. Two would be "virtual", in the sense that, even in a major emergency, there would be no vehicles for them. This seems weird, especially considering that FRES SV numbers appear to have been carefully calculated on the requirement instead. I think the numbers might be wrong / quoted in a not correct way.

WCSP should include the basic upgrades to the recovery and repair variants, so i'm guessing that 445, 380 and 65 might be "correct" numbers in the sense that 380 Section vehicles and 65 recovery / repair look more or less adequate for equipping the six battalions planned, and the sum gives the 445 total reported for CSP.
The NAO also quotes the "affordable fleet" as counting 565 vehicles. I've been guessing that the difference of 120 vehicles between this figure and the 445 could be the ABSV fleet, especially now that ABSV is being separated from WCSP. I think the long lasting confusion is due to the fact that recovery and repair variants were originally part of the ABSV branch of the WCSP programme, although i might be wrong, while now ABSV is pretty much a different thing, as it is supposed to complement FRES SV in replacing (finally) the FV430.
In particular, the huge number of command vehicles included in FRES SV has long made me guess that they will replace FV430s in this role across not just in cavalry regiments, but in tank, armoured infantry and other tracked units.
FRES SV does not include an ambulance variant, so ABSV will have to make up for this. A mortar carrier is also required, and possibly some APCs. The Army has also suggested it is considering an ABSV anti-tank missile variant. This would require more ABSV conversions but reduce the requirement for Warrior CSP turreted vehicles in exchange (currently the AT platoons employ Javelin teams carried in Warrior Section Vehicles).
The budget, as always, will be the main factor in determining ABSV's future.