Defence budget details out

Posted on 19 Oct 2010 by The Manufacturer

Prime Minister David Cameron has this afternoon revealed the details of the Strategic Defence and Security Review, including an eight per cent cut in overall defence spending.

The UK’s fleet of Harriers is to be decommissioned, David Cameron stating that either they or Britain’s Tornadoes had to be cut. The Nimrod programme is being cancelled too and many orders are to be downsized, including Chinooks, from 22 to 12.

The Navy’s premier aircraft carrier, the HMS Ark Royal , is to be scrapped to save money to build Britain’s two new aircraft carriers which will cost £5bn between them. Defence Secretary Liam Fox said this week that scrapping the projects would cost more than building them.

The replacement of Britain’s Trident nuclear arms defence will have to wait until at least 2015.

Ian Godden, chairman of aerospace, defence and security trade organisation ADS, said government faced a difficult balancing act between maintaining a well-equipped armed forces and reducing public debt. He congratulated the Prime Minister on the clarity of the measures and said that government must now work with defence equipment manufacturers to cement Britain’s exporting capability, ensuring both the economy and the armed forces are satisfied as best they can be..

“The key test of the success of the Review will be the extent to which it ensures that the UK has the industrial capabilities to address long-term future security needs and that our armed forces are equipped for the tasks that the nation asks of them,” he said. “Today’s announcement marks the beginning of a process, not the end of one. We will now work with the MoD as it produces its Defence Industrial Technology Policy to deliver the Review’s aims in practical terms.

“The UK is a world-leader in the defence sector and to retain this position the industry and the Government must work together.  This will deliver benefits for our armed forces, the UK economy, our export strength and the 300,000 people that work in UK defence – who are proud of the job that they do for our armed forces and for the delivery of over £32 billion per year for the country.

“Alongside the multinational firms based in Britain we also have more small and medium sized enterprises in defence than France, Germany, Italy, Spain and Norway combined. They are the bedrock on which our defence success is based and their needs must not be forgotten if the UK is to retain its ability to supply and support our troops to the highest possible standard.”

Steve Radley, Director of Policy at EEF, the manufacturers’ organisation, voiced concern over to what extent research and development will have to be cut back as a result of the re-budgeting.

“The strength of the UK’s world class defence sector lies in our mix of innovative large and small companies and a squeeze on government R&D spending would ultimately affect the quality of equipment and firms’ ability to succeed in export markets,” he said. “Government must now work with industry to ensure that drive to deliver financial savings does not undermine the future capabilities of a sector critical to both our national security and a better balanced economy.

“One outstanding issue is the significant waste that results from the unnecessarily bureaucratic MoD procurement process. Radical improvements to the acquisition process would not only deliver substantial savings for the MoD and industry, but would also help ensure that the MoD’s future finances match the country’s strategic defence priorities.”

The defence spending review will now take place once every five years, Cameron has declared, instead of once every ten as it was under the Labour administration.