MOD Balances the books
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MOD Balances the books
Amazing timing with all of the negative coverage being received by the MoD at the moment!
BBC News - Defence budget 'balanced' - Hammond
BBC News - Defence budget 'balanced' - Hammond
Champagne anyone...?
Reaaaaaaalllllllllyyyyyyyyyyyy............? 
Forgive my skepticism but the only believable thing ever to come out of a politician's mouth is CO2.
Forgive my skepticism but the only believable thing ever to come out of a politician's mouth is CO2.
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 This policy was later rescinded up to a point, by the introduction of “Just in Time”; but the FUD system was never the same again.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.
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.
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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.
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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
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
I don't own this space under my name. I should have leased it while I still could
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 . . .
A2QFI you are quite right of course. But then again taking out COTS and putting in our own kit will produce a world beating . . .
nab:
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!
I suspect tucumseh may have hit the nail on the head......
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!
Last edited by Chugalug2; 14th May 2012 at 15:38.
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?"
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?"
Last edited by 5 Forward 6 Back; 14th May 2012 at 16:16.
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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
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
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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?"
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Balanced budget to buy ,among others, the following items;
U.K. Sets £160B 10-Year Defense Equipment Plan
U.K. Sets £160B 10-Year Defense Equipment Plan
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.
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.
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?
... that said, a pay rise wouldn't go amiss, right?
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.
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.