MoD: £36 billion black hole

Discussion in 'Current Affairs, News and Analysis' started by Blogg, Mar 23, 2010.

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  1. NAO delivering more good news:

    "Edward Leigh MP, the committee’s chairman, said that the MoD's current estimate of a £6billion shortfall depended on “over-optimistic” year-on-year funding increases of 2.7 per cent.

    He said: "According to the NAO, even if cash spending on defence remains flat, then the projected deficit will be of the order of £36 billion. The deficit could be even higher than that.

    "Matters have worsened to the point where the department will have to take difficult decisions, such as to cancel whole equipment programmes."

    The MPs also uncovered "serious consequences of failings in the department's governance and budgetary processes".

    In the report - 'Ministry of Defence: Major Projects Report 2009', the committee said "intentional decisions to delay some projects have increased total procurement costs" and "overall are poor value for money".


    http://www.telegraph.co.uk/news/newstopics/politics/defence/7498439/Ministry-of-Defence-could-have-to-cancel-programmes-to-fill-36billion-black-hole.html
     
  2. It has been coming towards us for a long time; the equipment programme is unaffordable. I thought we were writing cheques 3-5 years ago that we couldn't afford. And so it has proved.

    Having written that, if you spread £36bn over 10 years and say it quickly, then it is a mere drop in the ocean, which is how the financiers have been doing it, ably led by the Treasury!

    But what do we cut? We would have to remove whole capabilities or cancel equipment programmes to make any difference.

    Any suitable candidates?

    Litotes
     
  3. Hmmm i forsee the following list from the people of arrse.

    Loose
    Carriers, JSF, Typhoon, RAF Reg, The RAF as a whole, Submarines, FSC, A400 and Trident

    Keep

    FRES, Warrior upgrade etc...
     
  4. Report which, despite some encouraging trends and some postives, overall makes for very unpleasant reading indeed.

    The legacy of short term political and budgetary fudging at the behest of the Treasury (i.e Brown, G.) coupled with multiple self interested factional decisions has taken the place of anything like an SDR with inevitable results.

    In short, a complete clusterfcuk.

    http://www.nao.org.uk/publications/0910/mod_major_projects_report_2009.aspx?alreadysearchfor=yes

    "The current defence programme is unaffordable, according to a report from the National Audit Office. The Ministry of Defence has already reduced the deficit between the defence budget and planned expenditure by £15 billion, but a shortfall of between £6 billion and £36 billion remains. The financial crisis means a substantial increase in funding is unlikely, and closing the gap will require bold action as part of the Strategic Defence Review which is expected after the General Election.

    To address the deficit the Ministry of Defence has reduced equipment numbers being bought on some projects and taken short-term decisions to slip other projects. This short-term approach to savings will lead to long-term cost increases. In 2008-09, costs on the 15 major defence projects examined by the NAO increased by £1.2 billion, with two thirds of this increase (£733 million) directly due to the decision to slow projects. Attempting to save money in this way does not address the fundamental affordability problems, increases through-life costs and represents poor value for money on the specific projects affected.

    One example of a project slowed is the Queen Elizabeth Class aircraft carriers. Although this action is forecast to save £450 million in the next four years, it is forecast to add £1,124 million in costs in subsequent years. This is a net increase in the forecast cost of £674 million. The NAO judges that this is poor value for money.

    On some projects, the MOD has taken the decision to reduce the amount of equipment being purchased. For example, the MOD has taken the decision to save £194 million by reducing Lynx Wildcat numbers by 23 per cent, from 80 to 62 helicopters. This has reduced planned flying hours by a third.

    These actions make it difficult to conclude on the effectiveness of the delivery of individual projects. Analysis by the NAO suggests signs of improvement in project cost control with innovative decisions being taken to ensure progress. Unless the MOD addresses the underlying budgetary and governance issues it will not consistently deliver value for money nor, vitally, will the operational benefits of expensive new capabilities be available to the Armed Forces in a timely manner or in the numbers originally planned."
     
  5. in_the_cheapseats

    in_the_cheapseats LE Moderator

    Put simply it is time for an SDR and a proper and long term review of capability and of government policy of international intervention.

    It will replace the desperate and frankly destructive last minute cuts to internal and future capability that the spending round is doing to us now.

    There haven't been efficiencies for years - simply cuts.

    However, an SDR isn't going to stop us having a disastrous period before a proper plan comes forth.
     
  6. Ah, the infamous 'Black Hole', a thing created by political meddling on equipment purchases that has resulted in at least 5 major programmes coming to maturity in the same decade. Moving smartly on 10-15 years when all the big price programmes have ended and the 'hole' magically dissappears.
     
  7. New Labour gave us SMART Procurement in 1997 and jazzed it up in the SDR as SMART Aquisition a year later.

    12-13 year down the line, what has New Labour achieved in improving defence procurement?
     
  8. Whitecity.... definitely nail, hammer, head. The comparison between the 1998 SDR and the situation now is the most telling and undeniable expose of defence spending of this governments useless time in office.
     
  9. Alternatively, knock 25% off Health, education and welfare budgets. Cancel all foreign aid and send half a million public sector emloyee's off to pick cabbages.
    Double the defence budget and the taxpayer will still be better off......
     
  10. Do India still get alot of aid from us?
     
  11. Do we really need a stockpile of around 200 operational nuclear warheads tho? Why not just keep 12 and bin the rest? That should save a lot of money :?
     
  12. 800 Million last year
     
  13. Yes, about £825,000,000 over the last 2 years and into next year I believe (3 year period).
    http://www.guardian.co.uk/politics/2008/nov/18/douglasalexander-development
    Roughly speaking we are giving each and every Indian a pound out of the UK taxpayers pocket. Thats £13.75 out of the pocket of every person in Britain which will help fund India's space and nuclear projects I suppose
    That's India alone, not including all the other nations (including China) we give cash too.

    Yes you read that right. Anybody wonder why the country is skint?
     
  14. Why do we give India aid, if they can afford a decent military with a few nukes too? :?
     
  15. Surely China & India, both nuclear powers with space aspirations, have enough money to look after whatever we have funded?