• ARRSE have partnered with Armadillo Merino to bring you an ARRSE exclusive, generous discount offer on their full price range.
    To keep you warm with the best of Merino gear, visit www.armadillomerino.co.uk and use the code: NEWARRSE40 at the checkout to get 40% off!
    This superb deal has been generously offered to us by Armadillo Merino and is valid until midnight on the the 28th of February.

MoD: £36 billion black hole

#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/new...-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
Litotes said:
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
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
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.

Chapter 8 said:
151. One of the first conclusions to emerge from the Strategic Defence Review was the need for a radical reappraisal of the way we carry out defence procurement. We spend some £9Bn a year on equipment, spares and stores. Despite previous efforts to improve our procurement process, many of our projects take longer and cost more to bring into service than we planned. The 1997 National Audit Office report on major programmes reported an average delay of 37 months, unchanged from 1996.

152. This is not only poor value for money but also brings operational penalties. The length of the procurement cycle means increasingly we are not keeping pace with the rate of technological change which in many areas is now commercially led. The 'Smart Procurement' initiative announced by the Defence Secretary in July 1997 was aimed at adapting our procurement processes to meet these challenges.
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
instinct said:
Litotes said:
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
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...
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......
 
#13
lemonkettaz said:
Do India still get alot of aid from us?
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
jagman said:
lemonkettaz said:
Do India still get alot of aid from us?
Yes, about £825,000,000 over the last 2 years and into next year I believe (3 year period).
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?
Why do we give India aid, if they can afford a decent military with a few nukes too? :?
 
#15
jagman said:
lemonkettaz said:
Do India still get alot of aid from us?
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
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?
Surely China & India, both nuclear powers with space aspirations, have enough money to look after whatever we have funded?
 
#16
jagman said:
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......
unless he becomes ill or his kids need to go to school
 
#17
I guess the fact their rich and poor are so far apart.

A country with nuclear power and space aspirations and we are bailing our their own poor. Someone should mention it on question time :)
 
#18
The pre SDR Green Paper starts with an assumption that there will not be enough money. Surely a proper SDR should start with a blank piece of paper, an analysis of the likely threats and what will be required to counter them. Tot up the cost - and then the politicians can start making decisions as to "what the Nation can afford".
 
#20
PoisonDwarf said:
jagman said:
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......
unless he becomes ill or his kids need to go to school
Bollox
This thread is discussing overspend and inefficiency within the MOD, those same overspends and inefficiencies apply to every government department. Rational spending cuts in all of the above amounting to tens of billions can be made without denting the service we get (or don't get, despite the expense)
We can also cut off hundreds of millions in waste by ditching useless dross like Rural Development agencies that don't develop anything other than cash and jobs for the boys.
We could also stop subsidising unions to the tune of tens of millions.
UK government is only short of cash beacuse they pish it up against the wall. The public purse is vast, it is also mis-spent and squandered and has been for the last 12 years.
There is no shortage of money, we just have to stop spending it on 6 million public sector workers and billions of pounds worth of shite we don't need.

The government spends £600 odd billion of our money every year and they have been stupid enough to throw it away all over the place. There is no shortage of cash, we just have to stop squandering it and use it efficiently.
 

Latest Threads