ANALYSIS: Miltary faces 'perfect storm' of budget vs need
 

A very interesting article on Flight Global, with the opening paragraphs setting the scene.

Further on in the article:-
Seems to me that the thrust of his speech at a conference of the UK Royal Air Force Air Combat Support Group is very much on the mark (and that he probably will not be getting any Christmas cards from Army types).

None of this is rocket science. The gap between the capabilities we need to carry out the foreign and security policies of the UK government and the money available to fund those capabilities grows ever wider.

All to often the very next step in the debate is a half-educated rant about other budgets, wastage, yada, yada yada.

Austerity has a very long way to go [read up on the "soggy recovery" - more and more analysts feel we are going to live a very long time in very austere world]

There will be no blank cheques for the military - just a great many hard and unpopular choices.

And as for those ****ing carriers, don't get me started.

BBC News - Long, long slog to mend public finances

Read this...it's Peston doing his thing, but the meat of it comes from the OBR

This quote is particularly grim

It shows that that if a new Tory government delivered on its pledge to protect spending on schools and hospitals, the cuts for other public services - such as the police, courts, social services, local government and so on - would be so big as perhaps to defy credibility.

Defence would come under "...and so on" in that quote.

Um, I fail to see why less income tax was unexpected. The Government was fully aware, as was everybody else, that low wage jobs were the ones being created. This is logical rubbish, nevermind evidently dumb policy.

Should you be short of comedic reading material, the following link is to the 2010 manifestos (see in the Health section for further links to the other parties)
http://www.telegraph.co.uk/news/elec...manifesto.html

The Conservatives undertook to eliminate the bulk of the Deficit by 2015. The deficit has in fact risen slightly. The projected date for eliminating the bulk of the deficit is now 2018/9. In other words, the five year target is still 5 years way. Jam tomorrow.

Nevertheless, listening to the utter rubbish spouted by the aptly named Ed Balls yesterday, just imagine how broke we'd be if that little non-entity Miliband was running the country.....:uhoh:

There's no golden bullet, but the country is doing well under the current government. Unfortunately ill-educated oiks and mad fascists are allowed to vote, so whether DC will still be at the helm next year is uncertain. I certainly hope he will.

But just how much more money will be thrown into the black hole of NHS incompetence?

Now that the UK is out of Afghanistan, just how many Chinooks and C-130s does the country really need? I wouldn't be surprised to see a reduction in the SH fleet, with many aircraft mothballed and for the C-130s to be retired early as Atlas comes into operational service.

Is the question more one of need being a necessity and most of our equipment programme being top end aspiration?

Perhaps we need DSD that is far more brutally realistic and an equipment and manning solution that is adequate.

you are totally tight mate, but I think bilge like this is fed to the public, because they (we) buy it. You don't have to look to far to find all manner of economists, businessmen and even journos predicting back in 2008, that in 2015 we would be right where we are.

As much as is needed to keep the government of the day in power. No offence Beags, but it's a pointless rhetorical question. Spending on defence is only a priority when there is a proper (hot) war on. We all know that, it was ever thus.

The military folk I know are clever, astute people...they need to adjust to the realities of the world we live in and make their career choices accordingly...based on the needs of themselves and their families.

And as for the ring-fenced bloated overseas aid budget - don't get me started!! :mad:

Therein lies one of the problems - the military hierarchy are not prepared to make the hard choice and tell the government of the day that the 'strategic direction' is not achievable with the assets available. They take it as 'risk' (perhaps better known as 'capability holiday'!) and (figuratively) cross their fingers. Too many 'yes' men waiting in the wings who would sell their soul for another star or a knighthood.:(

Also not helped by the petty inter-service willy waving - if one service chief pops his head above the parapet and says 'no' one of the other two will soon pipe up with 'give us the assets (or more realistically the money) and we will make it work' (even though that money will no doubt be diverted to their single service 'pet project' instead resulting in more 'risk'). And this is not a swipe at any particular service - all three are as bad as each other.

Been a long time since a Chief of the Defence Staff has taken a stand whilst in post. Always amuses me how quick they are to speak out once they take the uniform off......:ugh:

Kinda make my point there. What you and I think of the spending priorities is utterly irrelevant. All that matters is what will happen to the defence budget in the next five years. The smart money is on it being hacked away at once more.

That means fewer people. And what do you think your five stars will do when the ever-stretched forces are asked to do yet another unforeseen task...

a. Raise two fingers to the minister and tell him/her we're closed for more business?

b. Bend over the ministers desk, drop trousers (or raise skirt) and ask for it good n hard?

Use your heads people...if you want to be a workaholic, get your arse on the outside...you'll make a ton more money.

PS Wrathmonk...totally

Posted this elsewhere yesterday. Shows the scale of the challenge.

We are, as a country, determined to spend beyond our means. We spend north of £700Bn a year of which £460Bn (that's 66%) is split across three departments (Health, Education, Social Security - inc pensions) where there will in general be ever increasing demand, partly because we have an increasing population (both from immigration and an ageing population) and partly because the scope of those services will always tend to increase as well (treatment because we can, lifestyle issues, education scope etc etc). Two of those budgets are ringfenced and the other contains a component (pensions) that will only continue to increase whatever you do to other parts of it. This means that the burden of "trying to live within our means" falls disproportionately on other departments. Just so that's clear, the £84Bn to balance the budget would need to be found from around £270Bn of spending, across departments where the biggest of those remaining is (you've guessed it) the MoD at £38Bn. We going to get much of the £84Bn out of that? Or the Home office at £32bn? Or the next biggest, which is the support to home carers at £31Bn?

Delivery of services in the big three departments is predominantly (but not exclusively) via the public sector and any attempt to improve efficiency in a meaningful way (as opposed to mandating "efficiency savings", which end up being cuts) are resisted tooth and nail, some with good reason, others far less so.

We cannot drastically increase the tax take, because if we're honest, the big areas for tax take are mobile and can and will move out of our jurisdiction, with knock-on effects on employment and other taxation. As an illustration, there remains a significant body of people within this country that believe "I've paid me stamp, I'm entitled" - National Insurance collects £110Bn pa or put another way, less than 25% of what is required to support the three departments that form the cornerstone of the welfare state. The money fairy does not exist, so either we find more money from somewhere, or we stop spending as much (and no the DFID budget doesn't even scratch the surface). See graphic from the fount of all wisdom - the Grauniad.

http://www.theguardian.com/news/dat....zoomed-picture

In short, we need to stop and think what we're doing, because demand is always likely to exceed supply. A spending competition is why Ed Balls and Wallace are not to be trusted with anything more complicated than a crayon, let alone a bacon sandwich.

The Autumn statement certainly sets the landscape for SDSR 15. Sadly, it will almost certainly be as painful as the last IMHO.

Beagle - whilst I don't disagree in principle regarding some hard decisions on exactly how many of the 24 'hard used' C-130Js can be removed from FE&R they remain a very busy force even post afghan. As for rotary the RAF has seen/is seeing a circa 50% cut with the deletion of merlin and seaking and a smaller puma force. Whilst cutting chinook capability may seem tempting they are more important than ever before to Army and 3 squadrons doesn't leave much fat.

In truth, and even with recent centre experience, it's hard to see where large RAF cuts will occur especially given the enduring Iraq commitment.

NHS isn't a Black Hole of Incompetence
 

Beagle, I'll have to pull you up on "the black hole of NHS incompetence".

I agree the health budget is huge, and the analysis by many here of the relative budgets of departments, spending cuts required and where they may fall is spot on.

However

"the NHS is the cheapest system in the world producing the best health outcomes. The New York-based Commonwealth Fund ranks 11 advanced countries' health systems for cost and health outcomes. Britain spends $3,404 (£2,000) per head on health compared with the $8,508 (£5,001) by the open-to-new-entrants US system, with the other nine countries in between."

Taken from

The NHS is loved and efficient, so why the obsession with reform? | Will Hutton | Comment is free | The Guardian

Now, you can shoot the messenger, Will Hutton does have a particular angle. I personally think the NHS is trying to do too much, and in an undoubted age of austerity should do less. But globally, healthcare costs are an issue. In the NHS, for all its faults, we have the most efficient system in the world.

All very interesting. All very sad.

Simple arithmetic. We have spent beyond our means and those who we appoint to manage our money have done very badly. But it is not defence which takes up the lions share.

For the period 2013 - 14 welfare took about 25% of Government money. Health & Education came second & third respectively. Defence took a mere 7% or so (behind national debt interest!)

I suspect, now we are out of Afghanistan, defence will take a major cut. So what will happen? Amalgamation of the RAF with the Army & Navy? Top down cuts? Let's see. But let's redefine our foreign policy so that we don't ever again spend billions on an empire that does not exist.

But we really do need to cut where it can make a significant effect. That is Welfare. Welfare, Welfare. That will also have a knock on effect. If we were not a soft-touch nation there would not be a lengthy queue of economic migrants trying to get into the UK.

Finally, we should look at overseas aid. Is it right that we send vast amounts of a money to other countries for them to waste it on rockets ships or corruption?

NHS isn't a Black Hole of Incompetence,

How about the black of incompetence that is the Ministry of Defence and the Defence budget?

We have the fifth largest defence spend on the face of the planet, and yet face a constant round of capability reductions, holidays and falling numbers of absolutely everything.

The recent wars are a severe factor in this but have been largely funded from Government contingency reserve spending and not the defence budget.

Just imagine what the Israeli or Japanese forces would look like if they had our level of spending?

Something is rotten in the state of our military spending.

And it isn't the amount of money...

The Muslim hate preacher, Anjem Choudary, who was the inspiration and apologist for the murderers of Fusilier Lee Rigby, receives in excess of £25k per annum from the UK taxpayer. As per his "rights" :ugh:

I don't know what pay Fusilier Rigby would receive but I doubt it was anywhere near £25k, and he would have tax and other charges deducted from it.

As a nation we really need to have a national debate rathet than fumbling around on a shifting sands basis. Do we really want a 5* public sector matched to a belief in a significant global presence and capability?

If the answer is yes, then it will have to be paid for. This can either be through increased taxation or increased international borrowing.

Any sensible person should rule out increased borrowing so the real answer is pay more tax or fundamentally re-write how we do health, welfare, education, defence etc..

Sadly our political leadership on any side seem to be burying their heads in the sand with the standard lines of; we will spend more on the NHS, more on education, will lower taxation and borrow less etc..

If the main parties both agree that the UK needs to save or cut another £84Bn from non-ringfenced OGD budgets (as they appear to do), then I look forward to seeing their detailed plans of how they will achieve this prior to the election next May. :uhoh:

The 'government' is all about putting public money in to private hands. The public sector is being dismantled, we are paying for services twice over whilst they receive an 11% payrise and fill their gold plated pension pots

The number of billionaires has doubled during 'austerity', meanwhile the national debt is costing £1billion per week in interest alone.

Start asking "WHY" are there Foodbanks "WHY" are 5M people living on poverty wages "WHY" are 90,000 children homeless this Christmas.

They couldn't run a sweet shop, let alone a defence budget.

Just ask yourself, "Where did this money come from in the first place if it is not from private individuals and businesses that had to work hard to earn it?"

No, a bloated out of control gargantuan is being told to get its act together.

Where are they from and did they make their money from the UK?

The foodbanks are a political weapon. Offer something for free and you will never be short of visitors.
To say there are 5m in the UK on "poverty wages" is an insult to the genuine poor throughout the word. Again ask yourself "Why are so many people clamouring to enter the UK?"
If you want to know why so many kids are homeless just look at all the Leftist policies that sneer at, and strive towards dismantling the family unit.

Spoken by someone who has probably never had to run a retail business and trying to make a meagre living while all the agencies of the state are queueing up to relieve you of your takings.

Pious, indeed!

So that benefits can be better spent on the "essentials" in life - fags, booze, 50" plasma televisions, Sky subscription, naff bling etc etc. :rolleyes:

Pure ignorance there fella, well done.

The simple answer to that is to provide stamps or credits which can only be used for essentials. How much of the benefits money handed out ends up in the hands of loan sharks and utility companies because the poor are on the highest tariff 'pay as you use' meters because they won't pay bills? Before hard cash is given out, the receipients need educating and to demonstrate they can manage it and use it wisely. If the recipients can't prioritise, then the benefits provider should do this.

What makes it worse is that when someone comes off the dole, the benefits stop immediately, leaving the individual to wait a month or more for their first pay packet, thus making them easy pickings for the likes of Wonga as they struggle to make ends meet. Hardly an incentive to get a job.

A mandatory blood test for evidence of drug use before benefits can be received in cash would prevent a lot of it ending up in the hands of dealers.

Like MoD, there are parts of the NHS which run with supreme efficiency, and parts that are riddled with fraud, corruption and incompetence. In both, the good bits are often those free of direct political influence or staffed by those that resist it.



The defence budget isn’t all spent on equipment and I’ve never seen an answer to the question – are comparisons with other countries made on a like for like basis?



One must look at fixed and variable commitments. Broadly, very different parts of MoD are responsible for each. In simple terms, the former aren’t up for grabs. The potential for savings narrows considerably. These fixed (or very difficult to vary) commitments include the likes of PFI payments. Did I mention fraud, corruption, political influence and lack of bottle?



The tendency to live beyond our means, while hiding the cost in a credit card. This caused much of our country’s recent ills in the first place, at an individual level. I wonder how many went into the red last “Black” Friday? The difference is, the Ministerial policy makers aren’t personally responsible when the bill eventually comes in; they’ve retired on honking great pensions. Similarly, those in MoD who signed their name to false statements that this was a good spend against the defence budget. A responsibility conveniently delegated to them by PUS and Ministers, whose names don’t appear on the contract. In effect, Government policy requires such staff to commit fraud. In fact, the Government and MoD openly admit this.



Then, to “savings”. What does that mean? Savings that do not affect operational effectiveness, or savings for the sake of savings. Usually it means the latter. Our leaders simply don’t want to know about the former, because by definition it exposes prior incompetence and fraud. That is why, for example, the Chief Accounting Officer (PUS) has never implemented the various internal (never mind external) audit reports that spell out in excruciating detail that his senior staffs consciously waste money for short term protectionism.



There is always much chatter about how the defence budget is spent and poor performance. You seldom hear the politicians ask about success stories and how to learn lessons. A year ago I’d have said “Never”, but last year the House of Commons Defence Select Committee Chair (James Arbuthnott at the time) asked this very question and sought a short report on an aircraft programme that was delivered ahead of schedule, under “budget” and to a far better specification than requested. Arbuthnott then stepped down and now the Committee doesn’t want to know. Kudos to Arbuthnott for trying to open the box, but it tells you much that he only did it when he knew he was going. The political pressure from above to perpetuate inefficiency is overwhelming; and it is the same in MoD. (In 1999, half way through that programme, the old Chief of Defence Procurement was up in front of the Public Accounts Committee on the same subject. Instead of telling them the truth, he was deliberately briefed a pack of lies that showed MoD(PE) in a poor light. Why would you do that? The answer is simple. The bar shall not be raised. Always dumb down).



I’d like to see “GOCO” implemented properly. (Oops, shouldn’t put it like that, because Bernard Gray presented it as his own idea. Update and re-issue the 1991 Def Stan). Start with a well-defined domain, like avionics. In parallel, revamp MoD’s commercial operations. There was nothing wrong with the practice of having contractors draft the proposed contract (same Def Stan, and if a GOCO bidder didn’t suggest this I’d exclude him!), leaving a smaller number of better trained MoD staffs to scrutinise them before signing. And forget the nonsense that only Commercial can let contracts – that was and always has been a dangerous fallacy and major constraint. Those simple areas cause so much delay and waste, not to mention diverting highly trained staffs from their primary role when the resultant problems have to be fixed.

It's not a recession, it's a robbery and you're being fooled.

http://youtu.be/7ZCs3eus3YU

Dream on. I was a milkman briefly in the '90s. Convenience store owners in Leicester would cheerfully take childrens milk tokens for ciggies & booze, leaving the milk bill unpaid.

Fox3, so you're saying because a few people abused a system, we should live with a worse one, rather than punishing those who abused the better one? If you make the fines sufficiently draconian and do spot checks, then the shopkeepers will toe the line.

non ring fenced departments are looking at another 15-30% cut

In defence I guess that means Army of around 50,000, no F-35, no more Typhoons, carriers mothballed when built and T26 somewhere in the 22nd century

This next vid sums up what's wrong with the broken 'system', but I'm sure those on here that thought GW2 was a good idea i.e. the blinkered idiots, will disagree.

http://youtu.be/Hg8c_t0Ba6k

First, it wasn't just a few people. The inability of milkmen to get paid is fundamentally what killed doorstep delivery, in Leicester at least.
Secondly, draconian fines and efficient spot checks don't seem to be either happening or working anywhere else. Not illegal working, not illegal alcohol and cigarette sales, nowhere.
I agree the current system sucks, but I dispute your contention that stamps is a better one. It's a simpler one, agreed, but in my experience it doesn't work.

update: This just in http://www.cbc.ca/news/canada/hamilt...rice-1.2860704

The problem is threefold. Firstly, there are no household economic management lessons in schools, which is ridiculous. Trying to educate people after they are in trouble is bolting the stable door. Secondly, the level of commercial exploitation of benefit recipients is way out of control. The Government needs to get a grip on payday loans, gambling, etc; preferably in my view by banning the lot of them. Irresponsible lending caused 2008, and this is no different. Lastly, if someone needs a washing machine, give them a washing machine. They can't drink, smoke or gamble that.

Back to Defence. The Government is not prepared to cut its commitments to match its capabilities, and has no money to increase capabilities within the current procurement system. There is also a generation of VSOs who aren't prepared to tell them so. This has only one inevitable outcome - defeat.

Don't be too keen to call ENDEX on Afghanistan BEagle, especially as far as the Chinook force is concerned - UK retains Chinooks in Afghanistan - IHS Jane's 360

It's interesting to note that the Chinooks have been on deployment every year since they entered service in 1981. I'm sure there will be plenty of tasks for them once Afghanistan does finally wind to an end.

As for the C-130s, again I wouldn't be too premature in calling time on them either - UK may retain C-130J Hercules for special forces duties - IHS Jane's 360

I read in AvWeek also that the MoD has begun a study on replacing the centre-wing boxes on a number of the C-130Js, probably related to the SOF option.

As the ISF notes, the majority of "Welfare" is targeted towards Pensioners

What is welfare spending? - Institute For Fiscal Studies - IFS

...and I was almost in danger of getting this thread back on topic **sigh**.

Come, come, Melmothtw, you've been around long enough to know that as soon as someone mentions welfare, you get at least one person who disputes the view portrayed, whereupon the thread turns into Question Time lite...

But thanks for the links - had managed to miss one of them when perusing Janes :ok:

IPPR predicts the next Parliament will need to cut costs in defence budget to tune of £9bn.

If you want to keep a topic on thread (in any internet forum) simply ignore trolls/trolling, or just be polite/apologetic about digression.

On topic...circa 2010 Stephanie Flaunders, then BBC economics lead journo, wrote a piece re "socially impossible budget cuts" (sorry the link has gone).

Her point being, back in 2010, the level of cuts required to balance the books were simply to big for society to except - ergo they were not achievable and would not happen. She was 100% correct. She said we would get austerity lite plus smoke and mirrors.

I suggest, we are still in the same place, and specifically cutting defence by such a large amount will prove politically challenging. That said, defence is in for a rough time whatever happens.

Off topic...the UK general election is due in a little over 5 months and every political party is committed to balancing the books and austerity in some form or other, so lets be realistic hey.

I'd imagine there will be the odd nibble around the edges of the defence budget maybe the odd £Billion, but nothing like cuts of 15-30%. You can probably kiss goodbye to annual pay rises in excess of 1% for a few more years though.

If multi-billion cuts are made then yes certainly, one (or more) major programs will have to be shelved.

TOFO


Is this the Stephanie Flanders link to which you refer:


BBC - Stephanomics: Fairness and the recovery: Two verdicts for Mr Osborne


note the spelling of surname - she is daughter of the late Michael Flanders, who achieved some fame as half the Flanders and (Donald) Swann duo, performers of inter alia comical songs.


Mister B

Value for Money
 

Pr00ne raises a very good point. We have the 5th largest defence budget in the world but that doesn't reflect in the size and capability of our armed forces in the global context. Obviously there is a lot of nuance in that - some bigger militaries do lots of off the shelf acquisition, use old/second hand kit or simply offset capability with numbers etc


To my mind, there are 2 reasons for the mis-match- an overwhelming and inefficient desire to achieve absolute value for money on every defence pound and strategic industrial requirements.


On the first point, whilst we absolutely do need to deliver value for money on the budget we have, there is a point in pursuit of that where that desire itself costs money. I think of the MoD scrutiny process, contracting arrangements, approvals staffing etc etc. Whenever we think we have hacked that area, another group of people, with a vote, seem to pop up and so the wheel turns.


As for industrial requirements, it is now pretty clear that the MoD is unable to run effective, competitive tenders due to national strategic requirements to maintain certain industrial capabilities. that, therefore, comes at a cost and one the MoD seems to bear unilaterally. When I last served in the MOD, there was some talk on gaining cross-Whitehall consensus on other depts. contributing to this fixed overhead, but it seems that plan went nowhere as far as I know.


At the end of the day though, we are a democracy and no matter how much we decry the spend on perceived inefficiencies elsewhere or a welfare system that seems to discourage employment and contribution etc, the (lack of) defence awareness within our nation, coupled with the Iraq/Afgh effect, simply doesn't permit the case to be made on behalf of the MOD budget.

We need to upgrade our nuclear capability.....so I'm told.
We can afford it.....so I'm told
It's not negotiable so all those things that are under review must be less important, like education, transposrt, NHS (which, by the way, spends £7bn per annum on compensating patients for botched operations and the same on fraud....still think it's a good organisation?)

Requirement Scrutiny is the mandated process by which MoD ensures a proposed spend is “good”. The process itself is not inefficient nor does it cost much – if done properly. It is NOT done properly, and hasn’t been for over 20 years. Successive PUSs, who mandate the process, have been told this on numerous occasions by MoD’s own auditors. I suspect your (justified) view is based on the result of this failure, not the process itself.


Again, you are correct. While the official policy is “competition”, as a matter of policy MoD has not employed the necessary expertise to run and assess competitions for the same 20+ years. There are other factors. Political interference. Many competitions have run for excruciatingly long periods (years) only for the clear winner to be rejected on an overrule because he is not in a constituency of the Government in power.

More obscurely, in 2000 the Chief of Defence Procurement issued a formal ruling that if Thales (no one else, just Thales) expressed an interest in an ongoing project, the project manager was expected to cancel the contracts and start all over again with Thales. Regardless of cost or delay. (Inability to do the job was taken for granted). In December 2000 he went so far as to uphold disciplinary action against staff for refusing to do this (such an act would never pass the above scrutiny), instead insisting on delivering to time, cost and performance. This was utterly deranged, but was not a one-off act of lunacy. To my personal knowledge this ruling has been upheld at least 5 times in the past year alone, most recently this week!

I’m afraid under such “leadership” those in DE&S who try to do the right thing are stuck between a rock and hard place. 15 years ago, or even 10, it could have been fixed. But today, because there are so very few left who have been taught properly, I see a GOCO type structure as the only way out for MoD. But even then, as I said before, it is highly unlikely they will follow the extant rules, because Bernard Gray won’t want to admit “his” solution is simply to regress to an old policy that actually worked. So, what we’ve got, is a bastardised version which didn’t even draw a bid from a reputable defence contractor.