If You Had to Cut the MoD Budget by 25%

We all want the Future Defence Review to be commitments led rather than resource led and we all know deep down, it won’t be.

Given the rapidly deteriorating state of the nations finances, regardless of right or wrong, regardless of it being more worthy of cash than the welfare or the overseas aid budget and regardless of any other considerations it looks like the MoD is going to be invited to take a substantial cut in its budget.

We already know that it has a £6 billion hole to fill and the next few years are going to be even more difficult.

Pensions, wages, welfare, equipment, units, ceremonial duties; there is nothing sacred. The scope for salami slicing, a little bit here and a little bit there have long since departed, big cuts are needed.

Open question…

If it was your job of achieving a 25% saving off the budget for the next 3 or 4 years where would you start looking?

About Think Defence

Think Defence hopes to start sensible conversations about UK defence issues, no agenda or no campaign but there might be one or two posts on containers, bridges and mexeflotes!

13 thoughts on “If You Had to Cut the MoD Budget by 25%

  1. DominicJ

    The surface fleet.
    Contraversial, probably, but it makes sense given the scale of the cut.
    We’d have to cut the BAFG as well, not bring home, actualy give up any pretentions of fighting mutli division level conflicts.

    We could militarise the Atlantic Territories, 8-12 Typhoons and a couple of Battalions each to give us some sort of out of area clout.
    I dont think we could even keep Cyprus.

  2. Euan Stewart

    Options:
    1. Organise a military coup.
    2. Move abroad.
    3. Become a suicide bomber.

    I not surprisingly am one of those people with the opinions you described or close to them at least the cuts should be elsewhere. To start off a response with some thought put into it first we have to consider a cut of 25% in the MoD budget would amount to something in the region of £8-9 Billion pounds per year. Even although this seems and it is a huge amount of money there are ways of lowering spending without as much damage as some may perceive although there still will be extremely painful and unpopular decisions to be made.

    To start off with Waste and mismanagement would be my primary target of which there is plenty according to the Gray Report from what I can gather therefore I would introduce and follow many of the suggestions in this report. This alone should save a substantial amount of money if the findings were correct and I suspect that many of the findings are correct. Although we cannot truly know what is contained within the report there seems to be plenty of well educated and informed people talking about it. My next target would be the large army of civilians that work for the MoD while many no doubt do an excellent job there has been a massive increase in their numbers while performance and uniformed numbers have dropped. The MoD management I think also needs putting back in its place so they would feel the pinch in regards to pay, benefits, pensions etc although this would save very little money it would be a gesture to show that no one is immune.

    Other areas where money could be saved without damaging the uniformed services is operations as the current operations in Afghanistan soak up large amount of cash. Although some of this is not within the MoD core budget quite a lot of it is so cutting and running from Afghanistan would save money in the long term but also in the short term. Operations elsewhere have already wound down so there is little that could be gained in these areas although training bases in Belize and Brunei could be closed. Closing training bases in Belize and Brunei would be pretty daft in my opinion as they cost peanuts in the grand scheme of things and it would cost more in the long run but politicians are penny wise and pound foolish so why not.

    Actual damage to the uniformed services would still be needed and the best places to start would be trimming the money spent on ceremonial duties although this will be clearly visible to the public so someone might care. Manpower is one of the larger outgoings therefore where possible personnel numbers would be further reduced although this could seriously impact capability in some areas. I would if I had to consider even more cuts remove the airborne role of the Parachute regiment which would save money used for training, equipment etc. Armoured forces would also be a prime target and much of the equipment would be mothballed although I suspect much of it already is.

    To reply to Dominic’s comment what would you do to the surface fleet that already has not been done? The RN fleet would be that last place I would cut as it is already in a poor state and I doubt would survive much more damage. We have also long given up any pretensions of fighting multi division level conflicts certainly alone which went a long time ago now and even in partnership. I doubt we could field a single armoured division for any length of time or with the proper equipment standards.

    As an off topic political comment I would love to see other budgets cut by 25% for instance that would amount to over £50 Billion if applied to social security or £25 Billion if applied to the NHS. Either would be political suicide whereas to apply it to the MoD in the eyes of the public would possibly mean nothing really. In the wider scheme of things in 2010 borrowing will be something along the lines of £176 Billion and spending will be just below £700 Billion so even if the MoD was binned it would make little difference. I would rather the UK Government followed the option taken in Ireland and make blanket cuts but in the case of the UK around 15% of every departmental budget.

  3. mike w

    25% cut, British defence force.
    No carriers maybe just keeping the ones we have now.
    Keep the subs.
    No stratigic air support, except for Falklands.
    1 army brigade for out of area operations.
    No BAOR.
    Thats what 25% across the board would work out in reality.
    Thats all we can afford.
    good or bad, I am not sure.

  4. Phil Darley

    Excuse me, but I think everyone is missing the point here. Two points we need to remember. One we are the 6th, yes 6th largest economy in the world. Two, we are the second largest exporter of Defence equipment, in fact in 2008 I think we even beat the US!!!

    The whole premise of making cuts is absurd. The UK armed forces are tiny, so there is not much left to cut. It is also and more importantly in desparate need of re-equiping itself. There are too many vital programes (Typhoon/JSF/FSTA/FRES/A400/CVF/FIST etc etc) that are desparately needed. If cuts are made in these programmes it will hit the UK Defence industry the hardest. Do you see the USA or France doing the same….NO neither should we, in fact we should increase the Defence budget to boost the UK defence industry NOT destroy it.

    We have to think about this over the long term, which is what scares me about the TORIES, they want to make more cuts sooner. That in my view is utter madness, let’s hold our nerve and do the right thing. If we can bale out the Financial sector then we can certainly support the manufacturing sector and not destroy the industry that provides countless jobs, many at the cutting edge of technology and lets not forget allows us to defend ourselves, a point that often seems to be lost in these arguments. Do we really feel so safe that we believe no other nation would take advantage of a weak UK??? Is China cutting back its armed forces? No its building them up…WHY????

    RULE BRITANNIA!!!!

  5. Jed

    Although I agree with Phil, in the spirit of responding to the original question:

    1. loose the SLBM strategic deterrent force (and withdraw from our permanent seat on the security council!)

    2. Cancel carriers

    3. Withdraw from Cyprus entirely

    4. Withdraw from Afghanistan entirely

    If you want to make sweeping budget cuts, you have reap the political whirlwhind that you sow…

  6. Richard Stockley

    “If cuts are made in these programmes it will hit the UK Defence industry the hardest.” Phil, UK defence companies have done very well out of the tax-payer for a very long time.

    The armed forces are there to maintain security for the nation and implement and support UK foreign policy not to keep defence companies in business and likewise keep their share-holders happy or their workers in gainful employment. This is something the likes of BAE Systems seem to have long since forgotten.

    Increasing the defence budget is primarily about expanding military capability not pouring yet more money into UK based defence companies.

    If these companies want to stay in business they should produce consistently good kit that is also value for money. UK armed forces have had to put up with a host of second-rate, unreliable, over-expensive junk in the name of keeping the defence industry sufficiently funded. Also, given the quantity of foreign equipment built into UK systems, self-sufficiency has become something of a misnomer.

    In addition to this, huge sums are invested in UK companies in the name of research and development every year.

    Instead of relying on trying to sell hyper-expensive weapon systems like the Typhoon to maintain our manufacturing base, perhaps we should begin to focus on cheaper, more robust equipment that will achieve wider sales over a longer, more sustainable period.

    As for China, they can afford to expand and re-equip, they don’t fight highly expensive wars on the other side of the world.

  7. thedarknight

    What we are talking about with these possible cuts is a massive,massive diminution of our capability to project power in the world. And these cuts are motivated by the need to respond to a financial crisis of the kind that comes along every decade or so, albeit one made more dangerous by economic mismanagement.

    The answer to the question therefore is that it would be ludicrous to make such cuts. We are faced with a short-term problem, knee-capping the armed forces would lead to long-term problems. Therefore we should find other places to save cash.

  8. admin

    “Therefore we should find other places to save cash.”

    Fair point and I don’t think you will find a single person who reads this blog to think otherwise but regardless of rights or wrings, defence is going to be asked to cut and cut big, maybe not 25% but certainly a big number.

  9. Phil Darley

    Richard, I agree that the UK defence industry well at least one Big And Expensive company has done well in recent years. That is not to say trough it tohat we should now th the wall. I also agree that they have produced some very over-priced and under-spec’d kit. It is worth baring in mind that the Armed Forces and he the MoD have played there part by specifying kit that is poor and/or too UK centric. I do maintain that we we do get it right we don’t buy enough so the costs are disproportionately high!!! Like I said the T45 was designed to be a multi-role ship,but because they have de-scoped the equipmenr fit and bought only half what was needed the unit costs and the export potential has been lost. The Typhoon in my view gets a lot of bad press, it is a fine aircraft and if developed to its full potential (conformal fuel tanks, AESA radar, Thrust vectoring etc.)and bought in sufficient numbers will be a superb asset.

    If we need to make cuts then in my view it must be the carriers and the JCA/JSF. Without the carriers we don’t really need JCA (Typhoons can fill the gap)we don’t have the escort ships to defend them anyway. I also agree with dumping the Trident replacement. This is beneficial to a death by a thousand cuts, which means that many vital bits of kit will get culled. We have already seen this with the LIMARS Gun and Rocket projects being canned.

  10. Euan Stewart

    Well this comment thread is full of grumbles not surprising of course as other areas of the Government budget are far more deserving of cuts and have massive amounts of fat. However the admin did acknowledge this and asked what you would do regardless of how undeserved it may or may not be.

    Most of the people have commented here that just about the first thing to go would be the carriers but are we not forgetting these are the very same carriers that will incur cancellation charges. The cancellation charges have been reported to be extremely punishing and would likely not be cost effective in any way. Furthermore massive amounts of money have already been spent and I mean spent not just allocated for instance Rosyth dockyard has had large amounts of work done to make it ready for the first blocks arriving in less than 6 months. Some of those blocks have also been completed or are due to be completed very soon, for instance the bulbous bow is near completion at Appledore and blocks on the Clyde are progressing well. The massive stabilisers have been constructed so are ready to go and the rudder is progressing well. The aircraft lifts and diesel generators are complete and waiting. Much of the design has been finalised and items risk reduced such as the automated munitions handling system. A mock-up of the masts is being built to test all the radar systems, communications and all the other electronic wizardry. The point is the Carriers are moving along well, money, time and skills have been invested that cannot be refunded without crippling penalties and cancelling now would be pretty daft in my opinion. If the carriers went it would be wise to sign on the dotted line to relinquish our seat on the UN Security Council as we would no longer be able to project power. It would also be wise to tone down our rhetoric on the world stage as we would no longer have any teeth to fit in the mouth that we shout with. Carriers are also far more relevant than SLBM’s as we are more likely to use carrier air power than nuke someone.

    WARNING: What follows below is very political…Phil Said “We have to think about this over the long term, which is what scares me about the TORIES, they want to make more cuts sooner. That in my view is utter madness, let’s hold our nerve and do the right thing.” This is what scares me about Labour is the unwillingness to do what has to be done to reduce the massive burden of debt before the UK loses its credit rating. If the UK’s credit rating gets downgraded the cost of maintaining the debt burden and paying it back will increase substantially and will takes years more to make progress. As it is it could take decades to pay off the debt we owe and who says there will not be another crisis around the corner that coupled with the debt burden sink the UK. The route taken by the current Government is to keep borrowing until growth is secured and then cut spending but the spending cuts will need to be massive and coupled with tax rises in order to make progress on the debt. This could kill growth just as it sets in as it could well be artificial growth and doing so damages the economy for a longer term. Cutting spending now will induce severe pain but it will be shorter lived and should allow the economy to grow on a solid bed of reality rather than stacks of wobbly debt.

    Of course I could be very wrong but from where I stand it looks like a better approach than continuing to borrow vast sums of money hoping people that loan you the money are blind.

  11. DMolloy

    Cancel the new Trident replacement programme, see if life extension cant keep the current systems going. Cancel the rest of the Eurofighter order after we have 100, even that number seems excessive.
    Reform defence procurement and buy more of the shelf equipment that is proven. If we cant afford to buy enough unitssystems to justify the R&D then why build it.
    Keep the Carriers & JSF, Carriers would cost a bomb to get out of.
    Cut the last 4 type 22 Frigates.
    Cut the last Swifture class SSN and the oldest Trafalgar SSN.
    Combine Guards Division into Guards Regiment.
    Cut two Armoured Regiments.
    Early retirement of the Tornado Air Superiority variant.

    Off the top of my head at any rate.

  12. DominicJ

    “To reply to Dominic’s comment what would you do to the surface fleet that already has not been done?”

    Close it.
    Sell its ships, lay off its staff, reform the submarine service as a Naval Corps within the Armed Forces and Coastal Patrol Ships within a militarised Coast Guard.

    25% is role crippling.
    Look at your own personal finances, then cut 25% off your pay.
    I’d have to lose my house, no amount of trimming fat can deal with that, its amputating limbs.

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