The Ministry of Defence is conducting a widespread spending review as it battles with an over-stretched budget and a new type of military threat against the UK and its allies, industry experts have revealed.
The MoD may be forced to cut back on some of its planned projects in order to spend more on areas of increasing importance in modern combat, such as unmanned aircraft and precision missiles, a move which could favour US manufacturers.
Alan Sharman, director general of the Defence Manufacturers’ Association, said tight budgets and changing priorities have forced defence chiefs to look again at their spending plans. Since the 1998 Strategic Defence Review, the MoD’s plans have begun to look increasingly ambitious when compared with the money it has available, while the type of military threat the UK is likely to face now and in the future has changed.
Fighting a different battle
‘The MoD has been looking at how it can adjust its programmes. For example, if we want Joint Strike Fighter, do we need so many long-range aircraft? It may decide it needs fewer manned aircraft and more missiles,’ said Sharman.
The US attacks on 11 September are likely to have broadened this review, but may also make any decisions easier for the public to swallow, as there is more acceptance now that the type of threat the UK is likely to face has changed significantly since the Cold War. The government is expected to announce the results of the review within the next few months.
The review could cast doubt over some highly expensive programmes already in the pipeline, such as the future aircraft carriers. Alternatively, it could lead to design changes as the MoD takes a second look at where savings can be made.
Mark Stoker, defence economist at the International Institute for Strategic Studies, said the contract to build the two aircraft carriers is likely to go ahead, as the conflict with Afghanistan has proven the importance of the ships. The bidders are BAE Systems and the French defence giant Thales.
‘Six months ago it was debatable whether the aircraft carrier programme would go ahead, but the UK would be reluctant to give up the carriers, as they are a symbol of the country’s role as a significant world power.’
But the MoD might now wish it could reduce the number of Eurofighters it has committed itself to buying, he said, as the aircraft was designed to counter a military threat that has since changed dramatically. The MoD is committed to buying 232 Eurofighters, and is under contract to its European group of manufacturers, including BAE Systems.
European defence spending as a whole is unlikely to increase significantly as a result of the terrorist attacks, Stoker said. ‘We are probably at the trough of defence spending in Europe: it is not going to go any lower, but it will not go shooting up either. With other spending commitments across Europe there is not enough money to go round.’
More spending will now be directed towards equipment for use in special forces operations, such as missiles, unmanned aircraft, satellites and reconnaissance, said Stoker. These intelligence-led operations are also cheaper than traditional warfare based on more heavy-duty military hardware.
An MoD spokesman said reviewing spending plans and priorities is a continuing process. It has recently said it will look again at whether the UK has the right capabilities to meet the threat of terrorism in the wake of the US attacks. ‘We still believe the conclusions of the Strategic Defence Review were fundamentally sound, but it is only sensible to take another look. If we decide on any specific changes they will be announced,’ said the spokesman.