MOD Balances the books

[Donna K Babbs]

Amazing timing with all of the negative coverage being received by the MoD at the moment!

BBC News - Defence budget 'balanced' - Hammond (http://www.bbc.co.uk/news/uk-politics-18054731)

[snagged1]

Finally... years of overspend has been corrected. Rough times ahead.... but necessary to fix the damage done by Liebour. :ok:

[StopStart]

Reaaaaaaalllllllllyyyyyyyyyyyy............? http://www.cool-smileys.com/images/2030.gif

Forgive my skepticism but the only believable thing ever to come out of a politician's mouth is CO2. :rolleyes:

[TyroPicard]

Perhaps he has decided to scrap Trident at last....

[A2QFI]

"Balanced"? More like fudged or cooked I suspect.

[Pontius Navigator]

Hammond for Chancellor?

[tucumseh]

There are numerous ways of “balancing books”.

In June 1990 AMSO announced (after the policy had been signed off and implementation was underway) that instead of holding serviceable avionic stock to satisfy demands in accordance with the FUD priority system, from April 1990 they would only raise requisitions to initiate repair contracts or procure spares upon an outstanding demand being generated. Overnight, instead of demands being met within a few days, they went to delivery forecasts of up to 18 months. In other words, they didn’t need to spend money and trumpeted this as a savings measure. The fact front line couldn’t get their aircraft serviceable was neither here nor there. This policy was later rescinded up to a point, by the introduction of “Just in Time”; but the FUD system was never the same again.



Similarly, 3rd line workshops stopped holding spares as they appeared as a Debit on their balance sheet. They were sent back to MUs. Their books suddenly “balanced” but Turn Round Times went from days to months. It you time this right, the Debit doesn’t appear on MU’s books until the following year, as the sudden transfer of spares comes as a surprise and they simply can’t cope. At one workshop, the Executive Director (retired Air Cdre) used this device to make the savings he’d signed up to in his personal contract, and duly raked in his bonus.



In 1995 the Chief of Defence Procurement announced that, in future, no contracts were to provide companies with Government Furnished Equipment (GFE). (Take an aircraft Mid Life Upgrade programme. The aircraft for upgrade are fed to the company as GFE, on Contract Loan terms). One (senior) Service promptly demanded that their planned MLU for one aircraft fleet be cancelled, and brand new aircraft bought. Additionally, they withdrew all support for the programme as, according to CDP, all they had to do was sit and wait for their new aircraft. Again, this delayed contracts and resulted in a vastly reduced in-year spend, which looked great on the balance sheet, but the bow wave it created hit MoD a few years later. (CDP maintained his stance).

And so on. I’m not convinced. There will be systematic creative accounting at work here.

[NutLoose]

So no truth in the article in this month Jet Monthly that UK PLC may be doing an about turn on the Nimrod farce and the lack of a credible maritime force by purchasing the P8 Poseidon.

[A2QFI]

I wouldn't know about the truth of it but they won't buy it off the shelf. They'lll want mods and structural changes and then it will come in late and overbudget as usual.

Think back to the mess that was made of adapting Argosy for military service. One set of doors welded shut, heavyweight floor fitted and couldn't get a Bedford 3 tonner into it without special gear to compress the suspension so that it could fit into the height of the load space. Typical load in Gulf summer was Aden to Bahrain, possibly with a stop at Masirah, carrying 12 men or a ton of freight. Also could not reach safety height to go Bahrain to Akrotiri via Norther Route (Iran and Turkey) ISTR

[Pontius Navigator]

Nutloose, they may have been mindful of the Nimrod AEW3 canx followed immediately by the E3D buy. By waiting a year they can argue costs saved, books balanced, affordability etc etc.

A2QFI you are quite right of course. But then again taking out COTS and putting in our own kit will produce a world beating . . .

[usquamlad70]

Obviously the Yanks have stumped up with the cheque for the harrier spares

[Not_a_boffin]

If you look on the DII link to SP's message today, it's hard to see where axes have fallen. I suspect tucumseh may have hit the nail on the head......

[Chugalug2]

nab:
I suspect tucumseh may have hit the nail on the head......
I'm damned certain he has, but what he tactfully (?) omitted adding was that the consequences of the scam that he describes are still with us 25 years later, in the dire airworthiness shortcomings that so preoccupy the MAA today, as well as the airworthiness related fatal accidents accounting for at least 62 deaths in the interim.
If he has indeed hit the nail on the head then everything that the MOD has stood accused of since is confirmed in Spades. In which case....despair!

[5 Forward 6 Back]

From the article: "The best way I can support our armed forces... is to give them the assurance of stable and well-balanced budget and that the equipment programme is managed and affordable."

Really, Mr Hammond? Really? That's the best way you can support us....?

I can think of a few better ways. "Hey guys, your allowances have been torn to shreds, quarters are moudly and expensive, you're on a real-money 4 year pay cut, costs and charges have gone up, time away's increased, training's shot to hell, but don't worry, the budget's balanced and the equipment's affordable! You feel supported, right?"

[Twon]

5F6B,

My cynic meter has just blown up! I have to say, though, that I agree with you; the news sounds great in a budget meeting but doesn't translate well to most of us worried about the very real terms pay cut.

His next press release will describe "the colour of the sky in my world".

T

[Chicken Leg]

I can think of a few better ways. "Hey guys, your allowances have been torn to shreds, quarters are moudly and expensive, you're on a real-money 4 year pay cut, costs and charges have gone up, time away's increased, training's shot to hell, but don't worry, the budget's balanced and the equipment's affordable! You feel supported, right?"

But surely, it's the economy, stupid! Balance the budget and you can afford to address the deficiencies. The current SoS could fairly reasonably argue that the failings that you highlight, exist only because the budget has never been balanced.

[kbrockman]

Balanced budget to buy ,among others, the following items;
U.K. Sets £160B 10-Year Defense Equipment Plan (http://www.aviationnow.com/Article.aspx?id=/article-xml/awx_05_14_2012_p0-457436.xml)
May 14 , 2012

The U.K. will spend around £160 billion ($260 billion) on defense equipment and services in the next decade, which includes more than £4 billion set aside as a “contingency reserve,” Defense Secretary Philip Hammond told Parliament May 14.

The £160 billion covers almost £152 billion that has been allocated to specific budget lines, including more than £4 billion for the reserve. Another £8 billion is not allocated against specific accounts. The reserve and unallocated funds give the Defense Ministry some flexibility to deal with cost increases without affecting other projects.

The funding level is spelled out in PR12 (the latest program review), in which Hammond says the ministry has brought into balance equipment plans and actual available funding after years of mismatches between the two. Balancing the books has been a priority for Hammond, who says the National Audit Office will get to review the claim that the budget is stable, including by looking at commercially sensitive information.

Hammond says the sustainable equipment program “gives industry the confidence to invest.”

The funding being set aside includes an extra £4 billion for intelligence, surveillance and reconnaissance projects (such as the Solomon and Crowsnest efforts) and £7 billion for complex weapons. Eurofighter Typhoon upgrades are also to be funded, Hammond says, without giving details of which enhancements are due.

The budget will cover the planned acquisition of 14 Boeing CH-47 Chinooks and an eighth C-17, as well as three RC-135 Rivet Joint signals intelligence aircraft (called AirSeeker). The purchases of A400M military airlifters and Voyager air-to-air refuelers are also being backed.

On the helicopter front, Hammond says Wildcat buys are being funded, as are Merlin helicopter upgrades, studies to marinize the Merlin fleet, an Apache attack helicopter life extension to keep them going past 2025 and Puma upgrades.

[5 Forward 6 Back]

Chicken Leg, good point... I suppose with a balanced budget, I can assume my squadron won't randomly be shut, and my fleet won't suddenly disappear overnight....

... that said, a pay rise wouldn't go amiss, right? :ok:

[smokejumper]

Mmmmh I bet they still make a shed load of people redundant in Tranch 2 that don't want to leave......

[pr00ne]

smokejumper,


Of COURSE they will, that's what redundancy is, look the word up!

The budget balances precisely because they HAVE cut projects, capability and people.

[ORAC]

But the announcement also confirmed no Nimrod replacement (http://www.independent.co.uk/news/uk/politics/government-reveals-it-has-balanced-the-defence-budget--but-at-what-cost-to-britain-7746790.html).

.............But other programmes have been extensively cut back. There will be no replacement for the early warning Nimrod surveillance aircraft, significantly fewer armoured fighting vehicles and no plans to equip the armed forces with new remotely operated drones, which have become a key part of US defence capabilities...........

He also confirmed that there will be no stop to the significant cuts planned in armed forces personnel as a result of the new budgets. Army numbers will still fall from 102,000 troops to 82,000 – while RAF numbers will fall from 44,000 to 39,000...............

[Chicken Leg]

How else do you think the budget was/is able to balance?

[Whenurhappy]

Whilst there is some cautious optimism here, what about some investment in 'people policy'? We are frequently told that our people are our greatest asset - but where are we seeing anything outwith the EP that will keep the 200,000-odd SP and CS motivated?

[Bismark]

If there is no money in the programme for Nimrod MPA replacement, and SofS indicated neither would there be in the foreseeable future, why do we have ex-Nimrod aircrew spread around the world "retaining Seed-corn capability" - seed-corn for what?

By the by, my view is that we should have a Nimrod replacement. But if the project is unfunded we should not be retaining unemployable aircrew.

[5 Forward 6 Back]

Well, we're starting a cycle of 5-yearly SDSRs, aren't we? Books are balanced now, no immediate plans to acquire a new MPA, but who's to say SDSR 2015 won't decide on a P-8 buy?

[draken55]

5 Forward

As per Hansard. This is what the Defence Secretary's said:-

"As has been said from the Dispatch Box before, maritime surveillance from conventional aircraft is not currently funded in the programme. That is one of the capability gaps that my predecessor chose to accept, and a risk that we have chosen to manage. A number of different technologies will be available to deal with it as we approach the end of the decade. That is one of the decisions that the armed forces committee will have to make when it considers the prioritisation for the head room in the planned equipment budget."

So a manned MPA before 2020 does looks very unlikely balanced budget or not!

[usquamlad70]

Well they have 6 new Spitfires and one repairable P40 at thier disposal.

[backseatjock]

Hmmmm, wonder if this is part of the balancing act.

From article from Defense News online:

Britain's Ministry of Defence is considering changes to the way the construction of the Royal Navy's 65,000-ton aircraft carriers is run, according to defense sources.

An independent team of senior executives and others appointed by the Defence Equipment & Support (DE&S) arm of the MoD have been working for months on recommendations to sharpen the focus in the way the 5 billion-pound ($8 billion) program is managed once the integration and test phases get underway, they said.

An MoD spokeswoman said the work is a “routine internal review of the procurement and project control processes in place on the [Queen Elizabeth]-class project to ensure they are suitably efficient and robust to allow us to deliver this complex project on time and to cost.”

The indication of possible changes comes days after the government reverted to an earlier plan to operate F-35B short-takeoff, vertical-landing variants of the F-35 Joint Strike Fighter on the carriers and abandoned its 2010 decision to use the catapult-launched F-35C.

[Biggus]

5F6B,

If, and it's a big "if" considering that the coalitions plans for getting the UK annual deficit down to ZERO by 2015 have moved to the right by at least a couple of years (which still doesn't allow for any fallout from the Greek disaster unfolding right now), P-8s were ordered in 2015, we wouldn't see them in the UK before 2018.....

My reading of the "balancing the budget" article is that it means between now and 2020, so I can't see any MPA being purchased before then. Of course the next government might think differently, but I can't see it being the highest issue on their defence agenda!

I expect that by the time we got back into the manned MPA game, if we ever do, most of the MPA seedcorn will have already retired!

[the funky munky]

Well with the so called £8 Bn unallocated funding budget and the £4Bn reserve surely we can now get the remaining 10 Chinook (or more if possible!) ordered up so we can actually get the RWS we were promised? Also a few more Type 45s and Astutes would be nice plus dare I ask also some MPA?
Bit of a wish list but far better than a facile we've balanced the books statement along with a regurgitation of old news stories from Hammond.

[Lowe Flieger]

Biggus,

I agree with your conclusions, but I don't think the plan has ever been to reduce the annual deficit to zero. I believe it' s more like £30bn. Most economies ran a deficit, even in the good times. In the early 2000s when things were going well the UK annual deficit averaged around £27bn or thereabouts, so the plan is to return us to normal and manageable levels of borrowing. It's true this target has slipped by a couple of years.

The loss of MPA was the worst part of the SDSR in my view, and I am uneasy to say the least that there don't appear to be any medium-term plans to resurrect it. The handling of the Nimrod MRA4 project was appalling though, with a financial horror story to boot, which left the system vulnerable to its eventual fate. I just hope we don't get any ideas about small production runs of customised aircraft when we do re-think our MPA stance. That is way too expensive.

Poseidon should be well into its stride by the time we do think again, and ought to be affordable, especially if we can combine our efforts with other European buyers and don't overly customise our specification.

[Bismark]

Poseidon should be well into its stride by the time we do think again, and ought to be affordable


...and, of course will be placed in the hands of the RN where the seedcorn will by then rest (Merlin crews). But I would say that.

[Bannock]

"my view is that we should have a Nimrod replacement. But if the project is unfunded we should not be retaining unemployable aircrew"

And my view for what it is worth, is that the Government could not stomach two massive reversals on SDSR decisions (F35 and MPA) Give it a year, let the dust settle post PR12 and some of the Reserves that we now appear to have will find its way into an MPA.

As for the guys on Seedcorn I think you will find that they are assisting our allies plug our capability gap.

[Bismark]

As for the guys on Seedcorn I think you will find that they are assisting our allies plug our capability gap.

Since when did the UK MoD fund other nation's capability gaps?? Are these nations paying for our aircrew etc, including in-country costs? The whole point of removing capability from the UK Orbat is to save money, that includes personnel costs!

I am sure there would be an outcry if maritime FJ FW was removed i.e. delete CEPP and the RN kept its FW aircrew by sending them to the US, France etc in the hope that some government in the future brought it all back.

[Lowe Flieger]

Since when did the UK MoD fund other nation's capability gaps??....I read Bannock's post the other way round - ie other nations were helping us out using their assets but some UK crews to assist with the task - but no doubt the OP will clarify which interpretation they intended.

[Bannock]

Lowe, that's exactly what I meant.