I find looking at where the "£40Bn" actually goes is an interesting exercise.
https://www.gov.uk/government/upload...79994/2013.pdf
Table 1.03.03 on page 10 is particularly illuminating. What it says is that :
Of the £43.7Bn spent in 2012/2013 -
£12Bn (27%) went on pay and associated NI/pension costs, with a service / civvy split of (22%/5%)
£4.5Bn (11%) went on infrastructure costs (energy, phone/IT, property mgmt contracts etc)
£5.6Bn (13%) went on equipment support (aircraft support contracts, ship refits, vehicle repairs etc)
£2.3Bn (5%) went on consumables (fuel, food, ammo, clothing etc)
£4.8Bn (11%) went on buying new kit (Typhoon, Airseeker, QEC, Astute, Wildcat etc)
£3.1Bn (7%) went on buying new equipment / buildings (what they call none-single use items - ie it's not purely military kit)
So that's covered off pretty much 75% of the £43.7Bn. There are a whole raft of other items (T&S, R&D etc) that eat up a couple of percent here and there, but only one other major item.
That item (at £9.5Bn or 22%) of the total is depreciation and impairment, which I was taught a long time ago was an accounting provision which prudent businesses used to set aside funds for new assets as existing ones became due for replacement. However in this case, it is used (I believe) purely as an accounting exercise to reflect decline in value of assets. What is certain is that this £9.5Bn is not real and is not being squirreled away to provide for new kit somewhere in the future. It is therefore more correct to suggest that we actually spend (as opposed to allocate in a budget) around £34Bn on defence.
Just to put it in context, that depreciation figure is ten times what we spend on R&D and twice what we spend on buying new kit. However we also spend twice the amount on service pay that we do on buying new kit.
All of which goes to show that while fiascos like MRA4 hurt, they hurt more because so little of our budget actually goes on kit.