£10bn 'black hole' means new defence cuts loom

Wordsmith

LE
Book Reviewer
#1
Story just appeared in the Telegraph saying that there's still a big hole in the defence budget.

£10bn 'black hole' means new defence cuts loom - Telegraph

The Daily Telegraph has learned that Ministry of Defence officials have calculated that the department is at least £10 billion short of what it will need in the coming years.

The financial “mismatch” is larger than all the defence cuts announced in last year’s Spending Review, and has raised fears of another round of painful reductions in the Armed Forces.

The MoD’s budget, £33.8 billion this year, is being cut by 8 per cent over four years.

The department has concluded that those cuts will still not be enough to balance the budget, meaning that unless the Treasury increases defence spending to fill the gap, more cuts will be required.
Part of the problem appears to be a more hard headed approach to cost over-runs.

Bernard Gray, the MoD’s head of procurement, is understood to have examined major equipment programmes and argued that more money must be set aside to cover the risk that they will end up costing more than planned.
Although "it's all Labour's fault..."

An MoD source said the budget deficit was part of the “legacy” left by the previous government.

“The financial mess Labour created in the MoD was never going to be solved overnight -- the legacy was always going to take more than one spending round to solve,” the source said.

“The current Government is tackling the issues Labour ignored and refused to face up to. Unless we deal with the historic problems of a mismatch between the defence programme and the budget, defence will never be on a stable footing.”
Wordsmith
 

OldSnowy

LE
Moderator
Book Reviewer
#2
This has been open knowledge in the MOD for months. The machinations - entirely politically motivated - of the last government to buy votes has now come home to roost. Labour never gave a toss about Defence, except when it meant that money could be spent in specific constituencies. The Coalition is a little better, and is at least facing up to the overspend.

Labour spent money they did not have, and Defence, like the rest of the UK, is now having to pay for it.
 
#3
This has been open knowledge in the MOD for months. The machinations - entirely politically motivated - of the last government to buy votes has now come home to roost. Labour never gave a toss about Defence, except when it meant that money could be spent in specific constituencies. The Coalition is a little better, and is at least facing up to the overspend.

Labour spent money they did not have, and Defence, like the rest of the UK, is now having to pay for it.
Last I checked, we were fairly complicit in that spending. Lets be honest, the entire country spent money we didn't have, now we're all paying for it.

And yes, there is a massive difference between the SDSR settlement, and what we think it's going to cost to achieve that. That said, our old friends delay, obscure and double-count have raised their heads in quite a few different departments in order to make "savings".....
 
#4
I'd rather International Aid was cut than Defence, in all honesty. I don't give much of a f*ck about Cameron's "Moral arguements".
 
#5
Perhaps what we need is a hastily arranged 'SDSR Re-show' but obviously we can't call it that because to do so would admit failure. Hmmmm maybe we should instigate some kind of 'exercise' that lasts only a short period ........ say perhaps 3 months?

Just a thought.
 
#6
The House of Commons Committee of Public Accounts The Major Projects Report 2010 (15 Feb 2011) stated:

We have reported before that the defence equipment programme is unaffordable, with commitments exceeding forecast budgets over a ten year period by £36 billion.
This is the legacy of previous governments procurement policy. To balance the books, new projects have to be cancelled and/or savings have to be made in existing capabilities to free up the cash.

Look at the number. That's £3.6 per annum which is nigh on 10% of the TOTAL annual defence budget.

AND THAT'S BEFORE THE CUTS THAT HMG WANTS/NEEDS DUE TO THE AUSTERITY MEASURES.

Now, which new project(s) do you think are up for a culling and which existing capabilities are looking good for the chop to free up cash? Remember, New Labour has tied us into Project CVF, so that £20 billion project (equipment purchase only) is here to stay - even though, alone, it would make serious inroads into the deficit if it were to go.
 
#7
Rest of the Navy to go, remainder of RAF fast air, probably all of the Army's heavy metal. Since we're destined to soon be four minor regional provinces in the EU superstate, we won't need the kit anyway....
 
#8
Groan.

I am no new Labour fan, but I am sick & tired of always hearing every other decade how it was always the last governments fault.

The political masters change around all the time even when there is a cabinet reshuffle & no change of government, but the military & civil servants responsible for the day to day running of the mod are the fixtures & fittings.

So when I hear about the financial mess labour created in the mod & an mod source said the budget deficit was part of the legacy left by the previous government, I am left wondering what responsibility those working in the ministry bear for the so called mess. Were`nt they there ? or did a couple of political ministers wreak all this damage single handed ffs.
 
#9
Story just appeared in the Telegraph saying that there's still a big hole in the defence budget.

£10bn 'black hole' means new defence cuts loom - Telegraph



Part of the problem appears to be a more hard headed approach to cost over-runs.



Although "it's all Labour's fault..."



Wordsmith
While I regret any adverse effect on your national defense and without minimizing your situation, I would but note until you start talking multiple TRILLIONS of a black hole it is hard for some of us Americans to appreciate "mere" 10B pound one.
 
#10
...It is Labour's fault. Getting all guardianista with your inverted commas doesn't make that any less true.

However, it's our fault as well. We're far too spoilt as a nation to give a **** about defence spending. The NHS and education win votes and, as a result, absorb all available funds. If we voted for defence, the forces would have plenty of cash and we'd be a lot more secure, and a lot more influential on the world stage.
 

Grumblegrunt

LE
Book Reviewer
#11
why dont the mod get the accountants in properly to audit telic and herrick to work out just how much gordon brown stiffed them out of non paid promised funds. he seemed to think that he could treat the forces like all the fake promised aid, initiatives and projects which never happened.

the amount the mod had to save by tying the ships up in port for 10 years with no live fires must add up to a few billion. plus all the special kit which went through speedy procurement because the issued stuff wasnt up to it.

cant we borrow some off greece? 330 billion and counting so a few more wont be noticed.
 
#12
...It is Labour's fault. Getting all guardianista with your inverted commas doesn't make that any less true.

However, it's our fault as well. We're far too spoilt as a nation to give a **** about defence spending. The NHS and education win votes and, as a result, absorb all available funds. If we voted for defence, the forces would have plenty of cash and we'd be a lot more secure, and a lot more influential on the world stage.
Same dynamics here--the "peace at any cost/one happy world/hate their own country" wing of the progressivists here continually point to the costs of national defense as if they are the reason for the dire straits the US is in with an almost geometrically increasing deficit. The reality, however, is that the defense budget pales in comparison to the current costs of benefit programs that given the demographic trajectory we are on will grow exponentially in coming years and this does not even take into account the so-called Obamacare that is less about health care than it is about expanding the power of the federal government far beyond its Constitutional limits.

When it is also apparent that the progressivist agenda includes making more and more Americans dependent on the federal government, the share of these benefit programs of the total budget will grow even more. The main problem of course is these "budgets" are funded with borrowed money or by printing it.

I am the first to agree that there is a great deal of waste in the defense budget that should be eliminated but even with such waste numerous studies show the biggest return on investment for the people in terms of value for the taxes they pay is in the military.

The really troubling and perhaps ultimately fatal problem for America is that our politicians do not have the moral courage and selflessness to do what needs to be done in drastically cutting the sacred cows of the benefit programs and just keep putting off the hard decisions. All this does not bode well for our near term economic health and our long term health may be irrelevant since the system may collapse under its own weight before anything meaningful can be done.

Finally, if one analyzes those few times in the last 40 years or so when we have had a surplus or even a manageable level of debt it has been due to reductions spending and NOT by inreasing taxes. Most reputable and apolitical economists agree that ours is not nearly so much a need for more income through taxes but rather more austerity in our spending and almost without exception (regardless of party) cuts are only at the margins and are usually illusory anyway due to the deliberately byzantine way the politicians spin and obfuscate the true cuts that are usually an order of magnitude less than those announced.
 
#13
£10bn black hole in defence?

Let's stop this 'free hand out' once and for all. I've said before that the dole should be in return for work in the community (ie litter picking or recyclable sorting).

Let's go global.

'What's that [insert poor nation here] you want how much?', 'I tell you what, you supply us with x amount of y and we'll pay you z for it'.

Z would obviously be scandalously over generous for the x amount of y, but it means that they don't just sit around spunking our cash up the wall. And might even get to like the idea of being productive.
 
B

bokkatankie

Guest
#14
What will become of all the UOR vehicles and kit once we retreat (sorry withdraw) from Afg?

As the funding for a new fleet of Armoured vehicles appears to have been withdrawn my guess is that it will be soldier on with it!
 
#15
What will become of all the UOR vehivcles and kit once we retreat (sorry withdraw) from Afg?

As the funding for a new fleet of Armoured vehicles appears to have been withdrawn my guess is that it will be soldier on with it!
Some of it is being taken into core, some of it will be binned as it's utterly shagged. FRES is probably dead as a result of this decision.
 
#17
Do these future "commitments" include paying for the farce that is the Tory PFI policy? Labour's mistake was carrying on with it. Both parties ignored dire warnings. Much of the £36Bn or whatever must be tie-ins to these ludicrously conceived and priced contracts. And penalty charges for escaping from those that are no longer needed. Don't hear the Tories mentioning this.
 

Wordsmith

LE
Book Reviewer
#19
Do these future "commitments" include paying for the farce that is the Tory PFI policy? Labour's mistake was carrying on with it. Both parties ignored dire warnings. Much of the £36Bn or whatever must be tie-ins to these ludicrously conceived and priced contracts. And penalty charges for escaping from those that are no longer needed. Don't hear the Tories mentioning this.
PFI was indeed started under the Tories, but one G. Brown Esq markedly expanded the scale of PFI contracts. They were a way of financing his grandiose public spending plans without the cost appearing in official government burrowing figures. It turned out that many of the private sector companies who negotiated PFI contracts under the Brown regime got away with murder and are now making profits far greater than intended. So much so that PFI contracts are being sold on from one company to another when the original company wants to realise its profits now, rather than over the lifetime of the contract. The Tories have been kicking and screaming about the more ludicrous PFI contracts they inherited but there's not a lot they can do without taking those contracts back into public ownership.

The MOD's future "commitments" include a number of PFI projects - the sanity of some have been called into question. Here's some recent newspaper headlines:

Ministry of Defence pays £22 for 65p light bulbs - Telegraph

The Ministry of Defence has paid £22 for light bulbs valued at just 65p, officials have admitted. Leaked Private Finance Initiative (PFI) invoices, dated 10 days ago, show army officials also spent £103 on inch-long screws for Land Rovers that are worth £2.60.
BBC News - MPs criticise MoD air tanker deal

The Ministry of Defence (MoD) was guilty of "astonishing" failures in its purchase of a £10.5bn fleet of tanker aircraft, a committee of MPs has said..."We need to ensure that, whilst PFI (Private Finance Initiative) contracts can deliver long-term efficiencies and savings, they do not stifle flexibility..." The planes, which will be based at RAF Brize Norton in Oxfordshire, are nearly six years behind schedule. The PAC's report said the taxpayer would probably also have to pay hundreds of millions of pounds more for the aircraft - a modified Airbus A330-200 that will also be able to carry troops - because they did not have sufficient protection to fly on operations in Afghanistan and other combat zones.
Governetz Public Property - MoD in dog-house for botched PFI kennel scheme

The Ministry of Defence (MoD) has defended its handling of a PFI contract for the defence animal centre in a 25 year scheme worth £109m. According to the Daily Telegraph it would have been cheaper to accommodate the dogs in double rooms at the five-star London Hilton, on Park Lane.
I personally think Cameron needs to do three things.

(a) Ensure that the more incompetent of the civil servants involved in these grotesque purchasing failures are included in the lists of those scheduled for redundancy.
(b) Ensure that all future contracts have clauses that if costs overrun, the manufacturer will take the hit.
(c) When this mess is sorted out (and not before) start funding the Armed Services better.

Wordsmith
 
#20
What will become of all the UOR vehicles and kit once we retreat (sorry withdraw) from Afg?

As the funding for a new fleet of Armoured vehicles appears to have been withdrawn my guess is that it will be soldier on with it!

Most will be gashed or flogged off, some because we won't need them, some because they'll be clapped out and most to rationalize the insane spares situation we're now inheriting.