As war in Europe looms, David Hencke reports on the Government’s controversial attempt to modernise our defence equipment

As Russian tanks rolled into Ukraine earlier this week, the National Audit Office (NAO) issued a worrying report on the UK’s defence capacity.

Even if there is no outright war with Russia, it looks likely that the UK will be expected to make a bigger contribution to NATO in order to deter Russia from moving on to claim more territory in eastern Europe and the Baltic states. The UK has already had to double its number of troops in Estonia, from 800 to 1,600.

Russian President Vladimir Putin has made it clear that his long term aim is to restore Russia’s sphere of influence back to 1991 and before the fall of the Soviet Union.

The Government did announce in 2020 a £16.5 billion defence plan to reshape the armed forces and a 10 year plan to modernise defence equipment. However, this was not simply extra money to spend on defence. To fulfil the equipment programme the ministry has to introduce cuts, the fine details of which the NAO reveals in its report.

The NAO’s verdict does not make comfortable reading, with Gareth Davies, head of the NAO saying: “In this year’s Equipment Plan, risks remain of over-optimistic assumptions about costs, budgets and the likely achievement of savings targets.”

The report points out that the equipment plan proposes an increase of £48 billion to £238 billion between 2021 and 2031 – far exceeding the extra £16.5 billion given by the Government to 2025.

As a result, savings are being made elsewhere. The size of the army is being reduced from 82,000 to 73,000 by March 2025 – compared to the 150,000 or more Russian troops currently amassed on the Ukrainian border.

The estimates for wages and salaries assumed in the programme will mean that both military and civilian staff will be paid less in real terms by 2030 than now. Every 1% increase on the wage bill will cost the Government an unbudgeted extra £1 billion.

There are also delays and cuts in the re-equipment programme. Plans for new Chinook helicopters are being delayed for three years, although the Government will need to lease existing ones for a further three years, costing an extra £295 million.

A plan for a new radar system to detect incoming ballistic missiles is being delayed from 2026 to 2029. There is also a three year delay in purchasing new light armoured vehicles.

The Government is ordering more F35 jets on top of the 40 under order, but they will not be delivered until 2027-28. It is also ordering more Royal Navy warships and a new upgraded Boxer armoured vehicle that will replace Warrior armoured vehicles dating from the 1980s. There will also be more money spent on cyber security.

Other decisions see the retirement of Hawk trainer jets, Typhoon jets and Hercules transport planes from service.

The NAO points out that the Ministry of Defence will have secure more unannounced savings to pay for the equipment, and raises questions about whether this can be done.

In response to Russia’s aggression in Ukraine, Prime Minister Boris Johnson has emphasised that the UK is spending record sums on defence, and has highlighted the Government’s increased spending. The NAO report confirms that this is the highest increase in military spending since 2012, but still emphasises that cuts will have to be made to buy the new equipment.

Dame Meg Hillier, chair of the House of Commons Public Accounts Committee, is sceptical whether the Ministry of Defence can really afford the new programme.

“Its claim to balance overspending against future savings sounds suspiciously like jam tomorrow,” she says. “Time will tell whether the recent £16.5 billion of new money is merely a fig leaf for deep-seated affordability issues within the plan.”

Civil servants can expect a grilling from MPs on the programme when they appear before them, particularly in the light of the changed, intensifying situation in Europe.

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