France ups the ante on defence spending, or does it?

The reaction to the news that France has increased their defence budget by €2.3 Billion this year and €3.8 billion by 2019 has been met by what I think are predictable reactions in the UK;

  • France now sets the political agenda on European defence
  • The US won’t love us anymore because France is spending more
  • We should follow in their footsteps and do likewise
  • This puts the election focus back on defence

Not so sure about any of that to be honest.

Of course, we are a self-selecting audience and more defence funding is the natural inclination of most of the people that read Think Defence but before getting carried away perhaps we should have a look at what this is likely to entail for France.

Additional top-up funding was needed because expected income from one-off asset disposals (spectrum and land) were not as high as anticipated, the spectrum bonanza boat sailed about a decade ago and, after all, we are in a global recession.

The funding also (and I think this is the crucial aspect to understand) covers operational expenditure. In much the same way the UK has a budget and supplemental cost arrangement, France needs additional funding to cover the cost of additional and longer duration operations in North and Central Africa and Iraq.

They will also be used to cover the additional expenditures anticipated allowing the French military to continue with their increased counter terrorist activities post the terrorist attacks in Paris. Keeping 7,000 service personnel permanently deployed at sensitive sites in France will attract a very large bill. A number of sources indicate that Opération Sentinelle (Operation Sentinel), the current additional internal security deployment, costs approximately €1 million per day.

The increase will reportedly, allow France to reduce already planned defence personnel cuts.

It is not clear from the announcements so far what the funding will be used for in detail but I have read a number of reports indicating increases in reserve capacity and cyber capabilities are also likely.

France maintains highly professional and well-equipped armed forces that are deployed at some scale, a fact that is often forgotten by many. They have in excess of 10,000 personnel currently deployed in Africa, for example, the same scale as UK forces deployed in Afghanistan. The additional 7,000 personnel for security operations in France will also be a significant burden.

The National Gendarmerie is a law enforcement agency that sits within the French Ministry of Defence although funded by the Interior Ministry (thanks JBT). In other nations, the UK for example, much of the role of the French National Gendarmerie is delivered by the Home Office and various constabularies that are funded from outside the defence budget, whether there will be any transfer of wooden Dollars (or Francs) between budget lines, who knows.

I guess as well, someone has to pay for those Russian Mistral’s!

The short point, don’t be expecting any new divisions or squadrons to be established.

Whatever the actual details, there is rather a large political element to the decision.

If a left wing government can increase spending on defence and security, the pressure will mount on this side of the English Channel to do likewise.

Over to you chaps, stand fast at the back Natalie :)

 

PS

Am always very wary on commenting on another nation’s defence matters, apologies for any ignorance induced errors

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Secundius
Secundius
April 29, 2015 3:18 pm

€2.3-Billion and €3.8-Billion, your joking right. For the US. that’s “Chump Change”, Administration Costs…

BigDave243
BigDave243
April 29, 2015 3:44 pm

France isn’t the US genius!!!!

Chump!!

monkey
monkey
April 29, 2015 3:58 pm

The French expect to save 18,500 military personnel from the pre planned chop of 34,000. The will need little or no new kit , no new facilities , no new administration chain etc . So to ‘boost’ their preplanned numbers from 2016 on wards for €2.8bn is good value at €150k per body. That will allow them to rotate the existing 10,000 in Africa and the 7,000 in France on a reduced interval or additional unplanned deployments. If we could save 18,500 troops for £1.85bn I would be pleased but it ain’t going to happen for that figure is it?

WhitestElephant
WhitestElephant
April 29, 2015 4:19 pm

The extra Euro 2 billion figure for this year is due to not receiving revenue for the sale of assets, the money was needed to cover the shortfall. So the budget remains the same this year.

The Euro 3.8 billion out to 2019 is nice. But that doesn’t mean the French defence budget will be 3.8 billion larger in 2019. Its just that an extra 3.8 billion will be spent over that time – like you say, for operations etc.

So next year we may see another Euro 800 million spent on top of the current French defence budget, and so on.

Not enough to propel the French defence budget (Euro 31.5bn) above Britain (GBP 34bn). The important part there being Euro v GBP.

I sort of which the French would outspend us, as it would likely motivate Westminster to do the same.

,

You want sum?

@monkey,

I thought it was 11,000 they were saving from cuts? (all from the army)

Pacman27
Pacman27
April 29, 2015 5:44 pm

Even without the extra money France seems to get better value for money from its budget which is similar in size to the UK.

It does beg the question of what exactly are we spending our money on.

£1b should cover 10k personnel after all it is 100k per person all in which is a fair aggregated cost of employment.

Observer
Observer
April 29, 2015 6:15 pm

Pac, how so? It might be that they are equally “inefficient”, just that you don’t hear much about it or people there accept it as a matter of fact and not complain online about it.

jedibeeftrix
jedibeeftrix
April 29, 2015 6:22 pm

the Gendarmerie sit within the defence ministry, but i thought their funding came from the interior ministry?

monkey
monkey
April 29, 2015 6:24 pm

@WhitestElelphant
I found the figure of 18,500 from a link posted by Chris on this weeks open thread.
http://www.bbc.co.uk/news/world-europe-32509301
But the could be wrong , until its on a .gov.fr website it ain’t confirmed.

Gloomy Northern Boy
Gloomy Northern Boy
April 29, 2015 6:43 pm

@Jedibeefitrix…They are, and almost equal in numbers to the Army…one of the the things about France I admire…along with the refreshing lack of political correctness…the unapologetically robust management of public order issues…le Legion Etrangere…and of course the wine, women and song (Edith Piaf, in any event).

Just think what we could do with another sixty or seventy thousand well equipped and well trained light infantry who specialise in stabilisation issues…available if required for overseas deployment. Would have been handy during the Tottenham Riots as well… :-)

I’d call ours “Carabinieri” though, because I prefer Rome to Paris…and they have “Corazzieri” with horses and breastplates and everything…@Red Trousers would just love them. :-)

GNB

Repulse
April 29, 2015 7:11 pm

@GNB: Seconded – would be a better use of the aid budget. I’d go so far as giving them control of the HM Custom Cutters also, makes more sense them policing the Mediterranean from illegal immigrants.

Red Trousers
Red Trousers
April 29, 2015 7:53 pm

ANY nation that issues tetrapaks of (ghastly) red wine in its’ ration packs, made by retired Legionnaires granted land in the Rhône valley, has my vote.

My favourite lunch is a happy memory of some brief months spent with the French Army in Bosnia: vine tomatoes, a dash of olive oil and several generous scoops of Dijon mustard. Fantastic. Makes the office bore go “euuuwwww” and fan her hand in front of her nose. But you can prepare it up to a week in advance and eat it with a Laguiole knife, and also wind her up by planting the knife in a piece of baguette so that the silver cross is in the correct position for praying. I think she thinks that I’m dotty.

monkey
monkey
April 29, 2015 8:32 pm

@RT
Note to self on invading France.
” Do not advance up Rhone Valley due to local population of hard bastards”
Abu Bakr d’ Baghdadi ,
Caliph of Islamic State of Iraq and the Levant

Gloomy Northern Boy
Gloomy Northern Boy
April 29, 2015 8:41 pm

“Carabinieri/Coastguard”…got a ring to it…

@RT “I think she thinks I’m dotty”…I think she’s quite likely right…it’s a great part of your charm I suspect…

@Monkey – Tours is that way as well…

GNB :-)

Gloomy Northern Boy
Gloomy Northern Boy
April 29, 2015 8:48 pm

@Monkey – scrub that, much further north…senior moment…

GNB

Red Trousers
Red Trousers
April 29, 2015 9:12 pm

GNB,

my perceived dottiness is merely a low grade trick to persuade office bores that I am not worth them trying to bore me with whatever nonsense is in their heads when in fact I am trying to look at the cricket score on the Beeb website, or sealing a reputation for being bored by company ruddy process (time sheets, form filling, etc) so that I am given a free pass by everybody on actually doing process and so can concentrate on doing something useful. Sadly, when asked a direct question of “would you like me to make some money for the company, or fill out your poxy little form?”, there are those in society who would rather prefer that the poxy little form was filled out.

My first industry boss recognised this in me. After about 6 months with the company, he took me out for dinner at an eye-wateringly expensive St James restaurant, gave me a bollocking for not filling out my time sheets, and then offered me the services of his PA to do all sorts of admin crap, and instead for me to concentrate on doing business development. She was not too amused, but neither of us cared. Still with the same company a couple of years later, I was accosted by some Finance harridan in a corridor, and informed that I was 133 weeks deficient in my time sheets. I told her that I didn’t have a problem with that, it was she who had the problem.

Gloomy Northern Boy
Gloomy Northern Boy
April 29, 2015 9:34 pm

@RT…the truly cunning bureaucrat…like me…finds somebody who enjoys doing that kind of stuff and gently nurtures them; allowing me to concentrate on important tasks like identifying a comfortable dining room with a well-stocked cellar attached…which is why I am one of natures Adjutants, whereas you are better fitted to command the Brigade…

GNB

wf
wf
April 29, 2015 10:02 pm

@RT: pathetic behaviour. Any cavalryman worth his salt would do what I did: spent 5 minutes charming the bitch from finance with a mixture of self depreciation to stoke her self-worth and charm to lubricate the necessary signatures. I managed with a stone cold bitch from Limerick (stab city according to the wife) whose’s requirements apparently included “six figures”. For the right patter, they’ll all sign off on those three grand expense claims…..

dukeofurl
dukeofurl
April 29, 2015 11:30 pm

Doesnt French military run the Fire brigade in Paris ( Army,sapeurs-pompiers) and Marseilles ( Navy,marins-pompiers).

Remember, for the UK military budget, it has to pay back Treasury a yearly capital charge based on the ‘assets’ used

Nick
Nick
April 30, 2015 5:55 am

Doesn’t the Egypt deal give France a hidden defence budget change ?

As I understood it, some of the Rafales and two of the frigates were coming out of existing French equipment (already in service or near service). The cost of acquiring these assets was already in the 2015 budget. Presumably the cost is now saved (or deferred to a future year) plus there is a source of income for the sate (based on financing plus any difference between the nominal selling price and the actual cost to the French government).

Unless DCNS are going to up current Frigate production rate, then France won’t be able to replace the 2 frigates until after the other 2 have been constructed. Likewise with Rafale, you might expect France to defer or at least slow down its acquisition of new Rafale until after the Egyptian (and possibly Indian) aircraft have been produced.

Both mechanism push the French asset several years into the future, which saves the government cash immediately.

monkey
monkey
April 30, 2015 9:24 am

@Nick
DCNS and Dassault have agreed to ramp up production to make up the shortfall of releasing existing or near to service entry units. The money aspect is a little more obscure with allegedly thecEgyptians paying up front to DCNS and Dassault but the French gov giving them a loan at the same time.

Nick
Nick
April 30, 2015 11:47 am

Monkey

Thanks. I would have thought shipyard capacity would limit the ability to construct faster than they already are doing. I think they are currently making about 1 Rafale per month. Doubling that is presumably quite expensive unless they can move skilled people from the private jet business (which means losing elsewhere).

Tiny Toy
Tiny Toy
April 30, 2015 5:32 pm

There are two main reasons that French defence spending has had to go up. The first is that they are passing laws to prevent privatization of defence contracts (via shell companies that they call “project companies”) such as has been done for the purchase of the 3 FREMM frigates and Airbus A400M whereby the project companies lease back to the state. Although this would have reduced up front procurement costs it would have been more expensive in the long run, plus the PS is ideologically against privatization, so they need to find more money for the state to buy these things outright:

http://www.lemarin.fr/secteurs-activites/defense/21781-fregates-fremm-hollande-renonce-la-societe-de-projet

The second is purely job protection, they had planned to axe 34000 jobs but they are now going to keep 18500 of them. This seems to be in direct response to jihadist threats as Hollande has said that at least 7000 will be on active deployment internally.

Giovanni Martinelli
Giovanni Martinelli
May 1, 2015 9:35 am

In the meantime, here they are some updated facts and figures from the Italian defence budget for 2015.
The Italian Armed Forces receive money from 3 different Ministries:
1) Ministry of Defence, with 13.186,1 million Euro;
2) Ministry of Economic Development, with about 2.300 million Euro; and
3) Ministry of Economy and Finance, with about 800 million Euro.

The money coming from Ministry of Defence are divided between:
– Personale (Personnel), 9.664 million Euro
– Esercizio (Operations & Maintenance), 1.150 million and
– Investimento (Procurement plus R&D), 2.373 million.

The money coming from Ministry of Economic Development are all for Procurement while the funds from Ministry of Economy and Finance are allocate for the military missions abroad.

So said and underlined that fund coming from these 2 last Ministries are yet to be defined in detail, the overall amount of available funds for the Italian Armed Forces should be around 16,3 billion Euro.

About 1 billion euro less than last year and less than 1% of GDP.

So said, in real terms and according to the parameter of percentage of GDP devoted to defense, the budget for Italian military in 2015 means 2 negative historical records.

And despite the commitments taken in the NATO meeting last September (halt any decline in defence expenditure and aim to increase defence spending as real GDP grows), Italy has once again cut its defence budget!
Lastly, consider that over 61% of these funds is dedicated to Personnel, only 10% goes to O&M and less than 29% is for Procurement.

The last hope is in the new “Libro Bianco per la sicurezza internazionale e la Difesa” (White paper for international security and defense), which should redesign the Italian Military.
But, according to the experience gained over the past years, the most likely scenario could be another waste of time.

Without significant reforms and even less money for the defense budget.

monkey
monkey
May 1, 2015 9:50 am

@Giovanni Martinelli
Yet despite your nation only spending £12bn ,a third of the UK budget , you still maintain quite effective defence forces , a thriving defence industry and a world class ship building industry . We have lessons to be learnt on the figures presented.

Giovanni Martinelli
Giovanni Martinelli
May 1, 2015 10:45 am

@Monkey
Appearances are deceptive!
Italian military not only suffers from lack of money.
Not only suffers for the huge amount of money spent on Personnel compared with insufficient funds for O&M and, partially, for Procurement.
Consider that there are over than 1.000 Officers and over 40.000 Warrant Officers more than necessary.
At the same time, Armed Forces lack about 40.000 Sergeant, Corporals and Privates.
The average age of Personnel is growing more and more with any attempt to reform it, to date, failed.

The result is that only few departments or units is operative and ready for combat while most of them has only a basic training with weapon systems and vehicle/aircraft/ships inefficient.

And if you consider that for 2016 and for 2017 are already provided for new budget cuts, try to immagine what will happen.

Without significant changes, the most likely scenario for italian armed forces is the operational paralysis within a couple of years!

Martin
Editor
May 1, 2015 1:35 pm

I still think we need to ask hard questions of the Uk military. how can France get what they get while spending 30% less than we do. I am even more amazed at what the Italians get for their EUR 13 billion budget.

at the same time I am also amazed at juts how little the USA gets for its vast vast budget.

It’s a good and well saying we have higher standards, training readiness etc but French forces have fought along side us on a number of occasions and performed every bit as well. They have also conducted some very successful solo ops in Africa and I have to wonder if we would have been so successful.

All Politicians are the Same
All Politicians are the Same
May 1, 2015 3:19 pm

France spend less than 10% less than us.

Martin
Editor
May 1, 2015 4:15 pm

@ APATS

EUR 31 vs GBP 34 billion

That’s GBP 22 billion vs GBP 34 billion

we also have a near identical PPP and GBP is very close to historical average with EUR so we can explain it with exchange rate differences.

Considering the French build expensive kit themselves like SSBN and ICBM where we get the advantage of US tech they seem to achieve a great deal on much less than us.

Rocket Banana
May 1, 2015 4:44 pm

Martin,

But you see, they have only a single nuclear powered CTOL carrier, whereas we have 1.5 non-nuclear LPHs.

That’s where all their savings are tied up. The forethought of an aviation industry geared to offer up economies of scale by using the same aircraft for land and sea base and the notion of nuclear propulsion that means you don’t have to worry about the price of oil.

…obviously, I jest :-)

monkey
monkey
May 1, 2015 5:24 pm

@Giovanni Martineli
175,900 Active – all arms
103,893 Carabinieri
41,867 Reserves
Forgive me for quoting Wiki and indeed your military may be in need of a big shakeup to improve its effectiveness in combat but in terms of numbers your government fields almost double combatants on a third of the budget . I guess pay and various in service benefits ( accommodation etc) are similar to ours and the Carabinieri are an armed policed force in effect but STILL come out of your defence spending and like many of our troops will remain the him country in time of major overseas mobilisation providing domestic military security duties etc. The detail of your force structures etc probably differ from ours but my point was we have something to learn perhaps from yourselves . This site is very much about getting cost effectiveness and openness to learn from others should be pushed to challenge existing processes’ and methodology.

Giovanni Martinelli
Giovanni Martinelli
May 1, 2015 6:39 pm

@monkey
The updated number (2015) for the Italian Armed Forces is: 175.077.

Again, the updated number for Carabinieri is 103.157.
But the most important thing to say about our Carabinieri is that, despite their military status and the fact that they are financed by the Ministry of Defense, they are a police corps to all effects.
Only a small fraction (2a Brigata Mobile, 2nd Mobile Brigade) can be employed both at home and in military operations abroad.

About the reserves, the update is very easy in the way Italian military has… no reserve.

In conclusion, for the real number of combatants you can easily refer to the Armed Forces only.

But there is another important thing to say; according to a 2012 law approved by Italian Parliament, our Armed Forces will have to shrink to 150.000 in 2024.
The reason is that we are spending too much for Personnel; taking in the account the fact that there are no possibilities of increasing overall defense spending, the only way to give money at O&M and Procurement is cutting the number of militaries.

monkey
monkey
May 1, 2015 7:26 pm

@DM
It does seem you have a imbalance between personnel, R&D and new equipment purchase , certainly in regards to NATO guidelines of a third of a budget to be on new kit. Obviously each nation sees its own situation in the context of its past , present and perceived future needs and guidelines ate just that , a guide but with a nation with such a long coast as yours compared to land area and the pressure from the migrants be it across the Adriatic or Mediterranean perhaps a focus on more naval kit whether Military or Coastguard would seem appropriate as this issue is not going away . It would not surprise me that once the media have settled down and jumped to the next big news item, EU support for your countries rescue attempts will fade away and you will be on your own again :-(

Martin
Editor
May 2, 2015 1:34 am

five years ago one could see the extra edge that the UK was paying for vs the likes of France or Italy. However our current force’s are virtually the same size and we are suffering from all the same obsolete equipment (in many cases our problems are even bigger) lack of training etc.

serious questions need to be asked in Whitehall about making the budget go further.

Martin
Editor
May 2, 2015 2:33 am

Maybe one factor to consider in the UK European comparison is our near obsession with paying off perfectly serviceable equipment early. don’t see the Italians junking 54 tranche 1 Typhoons and they seem to be able to keep tornado is the air with out a £7 billion overhaul.

also none of these nations seem to have to copy us with multi billion pound design studies that never actually produce anything. They seem to just go out and actually build kit instead.

Nor do they have to import equipment on mass from the USA because they have budgeted up the industrial base.

topman
topman
May 2, 2015 6:48 am

@ Martin

Well it does help to keep costs down if you don’t really use your equipment as often with regard to flying hours.

Martin
Editor
May 2, 2015 8:45 am

I agree Topman but then the French seem to have performed at least as well as us over Libya and now Iraq. I did not hear any bad reports about the Italains either over Libya.

Not to mention we currently seem to have an entire raft of issues with limited numbers of trained pilots etc.

Martin
Editor
May 2, 2015 8:54 am

The Italian Air Force in particular flys the exact same Fast Jet aircraft as the UK in similar numbers and our RAF budget is probably the size of their entire military budget.

Clearly the Italian forces have issues but so do we and we spend 3 times more than them.

sure we have some transports and some top class recon aircraft but nothing that can easily explain the disparity in our budget’s.

But then the Italians did not buy 160 Typhoons just to junk 54 of them or turn £4 billion worth or MPA’s into Razer blades.

Topman
Topman
May 2, 2015 9:49 am

@ Martin

‘The Italian Air Force in particular flys the exact same Fast Jet aircraft as the UK in similar numbers’

But crucially they use them far less, if you plan that in from the beginning you can save large amounts of money. Especially in everything from personnel to spares to repair/support contracts through to avtur. If people want that that’s fine, but lets not pretend the IAF can do everything we do for 1/3 of the cost.

‘sure we have some transports and some top class recon aircraft but nothing that can easily explain the disparity in our budgets.’

Not easily no but there are differences, they cost money. In everything from training to deploying a/c that aren’t at first obvious. Of course things could be better but you don’t get something for nothing. I think costs for personnel are quite marked in things like wages through to service accomodation or total lack of.

As to the rest of defence I’m sure APATS would know about the Italian navy how much high end training they complete, days away at sea, things like disparity in wages etc.

Martin
Editor
May 2, 2015 10:27 am

@ Topman

I do agree with what you are saying. However I think we have gotten too use to letting the MOD off the hook by saying that it’s our high state of readiness or the amount we use equipment that justifies are costs.

I think our military now has to get use to living with smaller budgets and it has to change its thinking. Perhaps RAF pilots fly too much. I know the historical perspective was that it was better to have less very highly trained pilots but I wonder of it’s still the case in the BVR world.

Clearly when combat aircraft cost more than £100 million for 6-8,000 flying hours we can’t afford to be running around in them as much as we did in the past for training.

we also need to get out of the mindset where the first trenches of aircraft bought are soon junked to make way for later aircraft that have all the bugs worked out.

Same goes for scrapping fleets to avoid running costs and a load of other issues.

we should stop looking across the pond at how the USA does things because they are clearly playing in a different league and we can’t afford to act the way they do. But we could possibly learn a thing or two by looking over the Channel.

Mark
Mark
May 2, 2015 10:38 am

Martin

Knowing first hand the “quality” of Italian aerospace engineering this is the best statement I can think off to sum up the Italians “When an Italian tells me it’s pasta on the plate I check under the sauce to make sure. They are the inventors of the smokescreen.”

Giovanni Martinelli
Giovanni Martinelli
May 2, 2015 10:49 am

@Monkey
The main problems for Italian military are:
1) lack of funds;
2) great difficulties to process a medium-long term planning due to the continuous cuts of money;
3) too much money spent on Personnel, with too many Warrant Officers and too few Sergeants, Corporals and Privates;
4) and, last but non least, no money either for basic and especially advanced training nor for weapon systems and infrastructure’s maintenance.
This the biggest deal to manage for Italian Armed Forces.
Again, the most likely scenario is an operative paralysis, with hundreds of vehicles stopped inside their warehouses, tens of aircraft fixed in their hangars and tens of ships docked at their ports.
In few words: “a hollow force”.
Lastly, till few years ago we didn’t have too many problems in the area of Procurement.
The money was not enough but, in any case, sufficient to keep a decent modernization pace.
In the past 4 years, with over 4 and a half billion euro of cuts, the acquisition of new kits is increasingly becoming a problem.


Also Italian Air Force is going to scrap all but 4 (maybe, double-seat trainer version) Tranche 1 Typhoons.
So that, in the near future, we should have 72 Typhoons.
And regarding the overhaul of our Tornados, we are not spending a huge amount of money for the simple reason that the process of MLU is just about for 40 aircrafts (25 IDS version and 15 ECR version) and provides only a limited update.

Martin
Editor
May 2, 2015 10:53 am

@ Giovani

I agree the Italian Air Force has a great many issues but everything you write could be said about the RAF. With aircraft left in hangers nod lack of manning and no money to fit weapons. But we spend 3 times as much. What kind of force do you think the Italians could have if they tripled the budget.

Topman
Topman
May 2, 2015 10:55 am

@ Martin

We are changing, the technology is there that we can start using simulators (or synthetics as they are called now). The amount of FH will fall as we can do a larger % out of the cockpit and on the ground.

The tr1 a/c are a seperate issue more from historic decisions and lack of planning.

On the broader point about lower budgets, we’ve no god given right to any amount of money. If people are happy with vastly reduced budgets then so be it. As long as we are fully aware of what those cuts mean and I don’t just mean raw numbers either.

@ Mark

Ah another fan then? I honestly think they’ve got worse looking at the issues between older and newer platforms, say 20 odd years apart. They are the biggest headache, not only that no-one seems overly bothered. I won’t pretend I have a loads to do with them day to day but I do see the issues their (lack of) QC causes. I’m not saying anyone is perfect but they noticeably worse than anyone else.

Topman
Topman
May 2, 2015 11:01 am

@ Martin

‘With aircraft left in hangers nod lack of manning and no money to fit weapons.’

Nowhere near at the same level, in the slightest. To give you an idea, there’s publically available figures for Typhoon. Out of all Typhoon FH in the world, we have flown c40% of them, with all the other countries sharing the rest. All that costs lots of money, if we want that level that the IAF is at so be it. But don’t think the differences are all down to us being really inefficient.

Mark
Mark
May 2, 2015 11:18 am

Topman

Most definitely If I were allowed to post what was found when checking there engineering and quality of the Italian product on the programme I was involved with I would be sacked and it was that bad most would probably not believe me. The quality guy who went out to audit the site said in his 26 years in aerospace engineering he had never seen anything like it there build process and stock control was a complete work of fiction.

It was a recommendation all the way the engineering chain to board of directors level to have them removed from the program but it was overruled, we were never told why but we could guess. A large team was then put it to in all but name take them over and all there engineering approvals and sign offs were removed.

mr.fred
mr.fred
May 2, 2015 11:49 am

Martin,
“But then the Italians did not buy 160 Typhoons just to junk 54 of them or turn £4 billion worth or MPA’s into Razer blades.”

I suspect you may be confusing cost and worth.

Giovanni Martinelli
Giovanni Martinelli
May 2, 2015 12:38 pm


“What kind of force do you think the Italians could have if they tripled the budget”.

The one which can deploy 6 AWACS instead of none, 5 Sentinel (plus other battlefield surveillance aircrafts) instead of none, 3 RC135W Rivet Joint instead of none, almost 9 air tankers instead of 4, 8 C-17 Globemaster instead of none, 60 Chinook instead of none.
And the list could be longer!
As you know, a well equipped and balanced air force not only needs to adequate number of fighter/attack aircrafts but also for “force multipliers”.
And if you consider this, even considering the problems of RAF, I think that you’ll realize that the differences between these 2 Air Forces are still considerable.

Martin
Editor
May 2, 2015 1:41 pm

You all make some valid points about the IAF. But what about the French Air Force. assuming and granted it’s a big if they get most of their A400m’s they will be have very similar capabilities to the RAF but with substantially more aircraft (almost double the number of FJ’s) and their budget is substantially lower than ours as well.

They were also able to develop an indigenous 4.5 gen aircraft and make sure it came with all the bells and whistles that we have to wait until 2019 for.

Mark
Mark
May 2, 2015 2:11 pm

Martin

As far as I know the French will order 180 rafale aircraft this will be the only fast jet in there armed forces. Not to mention they have no equivalent to the 60 chinooks we have. I thought the French had overtaken the UK defence budget very recently.

How the helmet mounted sighting system going on rafale?

WhitestElephant
WhitestElephant
May 2, 2015 2:51 pm

,

“I agree Topman but then the French seem to have performed at least as well as us over Libya and now Iraq. I did not hear any bad reports about the Italains either over Libya.”

Ultimately, Libya was a low end job. Neither the Italians, French or British were pushing aircraft and pilots to their limits (except pilot fatigue for the RAF early on!).

I suspect however, you would start to see a significant performance gap between the RAF and the likes of the IAF or even FAF during a more high-intensity scenario. RAF pilots achieve far more flight hours than either for starters.

Topman
Topman
May 2, 2015 4:26 pm

@ Martin

‘their budget is substantially lower than ours as well. ‘

Can’t say I’ve studied their budget, but a similar sized force will cost the same the world over. Are there ways of doing things better? Yes but not to the point were you can get something for substantially less.

Maybe FAF wages are less or pensions are from elsewhere etc. But if you are wanting a similar size, capability, depth and training then it will cost much of a muchness. I’d don’t believe the FAF or anyone else has a magic formula.

All Politicians are the Same
All Politicians are the Same
May 2, 2015 5:27 pm

a source I actually trust reckons France spend about 8 billion US a year less than us. i think Martin looked at dollar figures and assumed they were pounds and Euros for his crazy 30% claim.

Topman
Topman
May 2, 2015 5:39 pm

@TD

I understand 1 to be true in comparison to most countries in Europe. There is a report available online comparing aus/uk/us/can/nz wages and benefits.
2 is an interesting one, in all other areas competition is seen as good to lower costs. We seem to the opposite effect?

Chris
Chris
May 2, 2015 6:07 pm

Topman – I described the same competition effect in the 4th paragraph of this comment earlier: https://www.thinkdefence.co.uk/2015/04/open-thread-2015-week-18/comment-page-1/#comment-340854

WhitestElephant
WhitestElephant
May 2, 2015 6:35 pm

While we may have better wages and benefits for personnel (which is a good thing btw), the French spend a higher proportion of their defence budget on personnel than we do, simply by virtue of having many more troops than we do. The UK is spending closer to 30% while France is spending closer to 40%.

So i’d suggest the problem for us isn’t personnel costs, but that we aren’t getting enough value for our money when it comes to getting kit into service. Which I think is quite apparent really…

Topman
Topman
May 2, 2015 7:13 pm

@ Chris

Thanks, I thought would be up your street I have to admit to little knowledge of AFV of any description. Although one thing I do know is if this decades long train crash that is FRES continues it will make the MRA4 look like a beacon of procurement!

Chris
Chris
May 2, 2015 7:26 pm

Topman – the competition lark is (to my mind) inappropriate for most large item MOD procurements. Fine for pencils, lampbulbs and cans of soup, not fine for vehicles aircraft weapons or ships. We buy too few, and they are always very specific to UK requirement. Competition only really works when the shelves are full of products adequate for the role, then its a simple case of choosing which to buy. If the shelves are empty, or have products that don’t meet the need, and you know whoever you pick will design anew or significantly rework their older product once the contract is signed, then the competition is a dog & pony show. A long winded and expensive one at that.

In my opinion.

Martin
Editor
May 3, 2015 2:37 am

@ APATS France’s defence budget is quoted at EUR 31 billion and ours at GBP 34 billion. It’s simple maths to work out we spend about 30% more.

I agree with TD’s point that we pay better and offer more benefit’s to forces.

Our competition strategy certainly no longer seems to drive down costs and indeed seems to massively increase them when we factor in the never ending designs studies. It’s also left us with more capability gaps that the French as well.

No doubt now our top brass will simple want to just buy American products of the shelf as a solution as with the P8.

however this will no doubt make the MOD an even bigger drag on the economy. Perhaps they need to be more realistic in their goals and aim for less high end Gucci gold plated solutions that can be made at home and exported to other countries who already realise they can’t afford Gucci gold plated solutions.

Martin
Editor
May 3, 2015 2:40 am

@ Chris – I also don’t think it helps that our national champion BAE is in essence a North American defence company that has gotten use to the unaffordable way things are done in the states. at least the USA still has economies of scale to balance things out but we simply can’t afford to operate in this way anymore.

All Politicians are the Same
All Politicians are the Same
May 3, 2015 6:56 am

France actually spend $55 Billion we spend $63. 30% is nonsensical bollocks.

Chris
Chris
May 3, 2015 7:50 am

Martin – the behaviour of the large defence corporations has not entirely been due either to US DoD procedures or to voluntary changes in corporate policy. MOD decided to adopt a DoD-like procurement process that (presumably) they thought would make their job more efficient. Pretty sure I never heard of PDR/CDR until 1990; before then it seemed a much more tailored approach where MOD assessed the supplier’s way of working and interacted in the most appropriate way to get the job to succeed? Now process is everything. I too think the process is best suited to US-sized procurements, and the UK really needs to wind itself back in – it needs a process more suited to buying stuff in tens not thousands. It might make sense to have scalar processes too – simple fast cheap ones for low value projects, moderately searching ones for average value projects and the full-fat current process for the huge ticket items?

Martin
Editor
May 3, 2015 9:19 am

@ APATS – where did you get the $55 billion figure from?

Chris – given British industry is piss poor at mass production but great at small boutique high end you would think it could better accommodate MOD needs.

DavidNiven
DavidNiven
May 3, 2015 9:36 am

Is it really a like for like comparison?

The navy have a tiered force of light frigates and patrol vessels for presence tasking with roughly the same number of major surface combatants and types as the RN, I am not aware that they have an equivalent RFA (can someone confirm this, please?) and the capabilities they bring, such as true power projection through sustainment not to mention our MCM capability along with survey etc.

French land forces as a whole are geared towards a colonial style of force with a very large proportion of the army being light with a very small heavy element. During Op Granby the French forces were assigned flank protection due to the type of formations they deployed and I doubt the French could sustain a full medium brigade for any length of time such as we have in both Iraq and Afghanistan.

The French air force is capable and modern but it’s strange that as their forces are geared towards operations such as Chad and Mali they have not had the numbers in strategic lift to compliment their forces.

Is the question are we trying to do to much with our budget? rather than what the French get for theirs.

All Politicians are the Same
All Politicians are the Same
May 3, 2015 10:09 am

A source I actually trust.

Chris
Chris
May 3, 2015 10:14 am

Martin – funnily enough I have a lot to disagree with in such a short sentence. I do agree that one of British industry’s strengths is the ability to call on craftsmanship where projects are too small for effective big-business models. Quite often the size of team forces a high degree of multi-skill working (designer becoming purchasing officer, integration engineer and trials officer for example) where the big-business model would insist on experts in each discipline picking up their narrow task. Perhaps rather than ’boutique’ I would prefer to describe this as a small-business model.

Even in large corporations the project teams are often structured on this small-business model; bringing issues when later in the programme the inevitable fire-fighting injects many narrow-discipline experts to fix things (the real thing that needed fixing was up-front commitment and funding but that’s never fixed). A lot of project friction is caused by the clash of the small-business model core team who at one point had absolute authority for the project and the large-business model experts who sweep in like royalty.

But assuming companies large and small build small-business model teams to deal with the MOD’s small volume requirements, wouldn’t you think MOD would structure itself as a small-business customer? ‘Fraid not. It is clear MOD has an expectation that when it issues its vast requirement for a dozen forklift trucks or the likes, it expects the entire might of BAE or GD or Lockheed or Thales to jump to attention and hang on its every word. MOD will only deal with big corporations; this presumably because they expect big teams to work their projects. Clearly that never happens; the teams are small, often minimally funded, with experts added in and ejected as work products need just to keep spending down. And yet the small team chasing its dozen forklift order is faced with a 1200 requirement spec and a 600 requirement statement of work and an MOD audit team an order of magnitude bigger than their industry project team. There is a huge discrepancy between what industry thinks the project might be worth and what MOD thinks its project deserves.

As for UK not coping with Mass Production any more, that has probably changed with the maturing Japanese car plants that have created a pool of talent very much attuned to modern mass production. JCB similarly has grown like topsy and is now very much a mass production business. The knowledge exists, albeit in the civil vehicle engineering domain.

WhitestElephant
WhitestElephant
May 3, 2015 11:49 am

DavidNiven,

The RN has almost double the major surface combatants as France – 19 v 10.

I believe it would be unwise to count the French 2nd tier frigates as 1st tier. Even the Frogs don’t dare do such a thing and are themselves quite depressed when acknowledging such. Their defence white paper also admitted they would require the support of the RN (RFA) in order to sustain a task force.

DavidNiven
DavidNiven
May 3, 2015 1:14 pm

WhitestElephant

I don’t count the 2nd tier frigates as 1st tier, but they can muster very comparable 1st tier numbers to ourselves (due to our availability and other taskings etc) to escort their carrier/amphibs.

The more you look at the French forces as a whole is it not a question of wether they get real value for money from their procuremnt policy?

Nick
Nick
May 3, 2015 1:31 pm

@DN

DCNS at least does get some export orders at a reasonable volume, which must effectively subsidise French naval construction costs at least to a certain extent.

The Other Chris
May 3, 2015 1:35 pm

Sensible to use native currency as it’s more reflective of that economy’s output without contaminating the figures with another economy’s performance via foreign exchange conversions.

martin
Editor
May 3, 2015 2:47 pm

@ APATS – I took my figures from Janes

http://www.janes.com/article/44033/france-announces-flat-2015-defence-budget

EUR 31 billion or EUR 39 billion counting pension. Not sure what pensions entail for their budget. I know for us current forces pensions are included in our GBP 34 billion budget but war pensions are not. Either way with a current exchange rate at 1.35 we are still spending significantly more.

@ David Niven

I agree with what you say and I have heard the story of French forces in 1991. However the UK forces of today are no where near the levels they were in 1991 and with just three medium sized armoured infantry brigades with only 56 Tanks each we are not exactly heavy ourselves these days.

@ Chris

The MOD only deals with large companies because small ones can’t offer the ex brass directorships. :-)

WhitestElephant
WhitestElephant
May 3, 2015 3:07 pm

.

IIRC, 800 million in the UK budget is for pensions. The French spend more on pensions than us, a lot more I believe.

Martin
Editor
May 3, 2015 4:04 pm

@ whitest elephant

Certainly they do on their social pension but I am unclear about their military ones. The last figures I saw for the MOD budget were about £3 billion going on forces pensions.

Frenchie
Frenchie
May 3, 2015 4:27 pm

For those who wonder how we’re doing to save money, it’s simple.

For its purchasing policy, the French State reinforces the industrial and technological defense base, consisting of companies that contribute to the production and maintenance of weapons systems and military equipment. The Ministry evaluates the number in 2600.

In 2010, € 11.1 billion was disbursed to 2,257 companies included in the database.
As a shareholder in some of its suppliers, it supports the development of public enterprises in the sector.
As a shareholder, it is also attentive to the performance of these companies in a heritage perspective and hope a return on investment enjoying the dividends.

For DCNS by example, the state alone accounted for 30% of its turnover in 2011. The bilateral relationship between the maintenance department of naval equipment and DCNS is decisive for both parties. It knows the estimated amounts of the coming year from the previous October.

Some contracts were awarded to DCNS after competition but most, including the largest in volume, have been concluded while the competition is in fact nonexistent, including maintenance of the aircraft carrier Charles de Gaulle or the sub nuclear-marins. While some small scale markets, competition may increase, the situation can not be changed, especially for nuclear powered vessels.

Until 2000, DCNS was a branch of the Department of Defense, the direction of shipbuilding. It has since become national competence and service public company in 2001.

Its shareholders was opened to the private sector in 2007, notably with the integration of naval activities of Thales group. Despite this change in status an important part of management, staff remained after the change of status or arrived since, is from the body of the arms weapons engineers or officers; DCNS has service locations in the naval bases of Toulon and Brest; most of the buildings of the Navy were produced by DCNS who knows how often and to what extent it will ensure their maintenance.
The state remained the capital of the company in which it holds 65%.

The opening of the capital has been accompanied by increased attention to performance and profitability of the company. The State shareholder who receives dividends from its participation in benefits.

Nexter is 100% owned by the state. On July 1, 2014, the shareholders of the two French and German companies signed a memorandum of understanding for an equally owned alliance. This project is progressing and should produce concrete results in 2015.

Nexter’s business includes the supply of weapons systems and ammunition for Army, Air Force, Navy and law enforcement applications. The range of products offered by Nexter includes: Artillery systems CAESAR, TRAJAN, Leclerc, VBCI IFV, ARAVIS highly protected armoured vehicle, TITUS, an armoured 6×6, BONUS smart ammunition, all backed up by customer service, support and recycling.

There is too the Scorpion program, Nexter will work on development and building the chassis for the six-wheel troop carrier named Griffon, and six-wheel combat vehicle named Jaguar. Renault Trucks Defense will work respectively on the engine and driveline, and Thales on electronics and communications systems.

The cost for the Griffon has a fixed cost to € 1 million and Jaguar has a fixed cost to € 2 millions approximately.

While it’s true that we don’t have ultra modern equipment, such as reconnaissance vehicle we have the VBL, it is long way from the modernity of the FRES SV, but it is a light and fast amphibious vehicle, for the rest we have about 200 Leclerc, 44 MLRS, 630 VBCI, 39 Tigre, among others, it’s not bad.

Sorry for my bad english and I collected the little details on reliable sources as the court of French accounts.

WhitestElephant
WhitestElephant
May 3, 2015 4:51 pm

,

Ah you are right, I was thinking only of war pensions. Still though, all that expenditure makes up the 30-33% of our defence budget we spend on personnel related costs. Overall, the French are spending much more than us on personnel related costs, about 45% of their total budget according to 2012 EDA figures – but that has come down slightly since then I think, nearer 40%.

According to the 2012 EDA figures, Italy spends 15 bn out of a total defence budget of 20 bn on personnel, or 75%.

Frenchie
Frenchie
May 3, 2015 5:10 pm

In France, the expenses related to staff reach 19.6 billion euros, 15.1 billion for military and 4.6 billion for civilian employees of defense.

Pensions constituted 32%, or 6.3 billion.

Giovanni Martinelli
Giovanni Martinelli
May 3, 2015 6:05 pm

The figures in the report of EDA and referred to Italy are not correct.
In 2012, the real defense spending of my country was around 17 billion €.
Over 3 billion less than indicated by EDA.

Not correct at all also the data for Personnel; the percentage devoted to this chapter of expense is around 65%.

Not a big difference, so that the conclusion is the same: Italy spends too much money on Personnel, especially because we spend too little for Defense and politics prefer to sacrifice other things such as O&M and Procurement.

ArmChairCivvy
ArmChairCivvy
May 4, 2015 6:29 am

Thanks Frenchie,

I think the figures you gave “”The cost for the Griffon has a fixed cost to € 1 million and Jaguar has a fixed cost to € 2 millions approximately” are very indicative (for the benefits gained from stable, long-term planning). Incidentally they match the ones for Patria’s AMV and its predecessor, more optimised for peace keeping. Bespoke developments with either short production runs (planned, or from lack of export success) have easily hit 2-3 times the e 2m level, for a fighty one.

A nuclear carrier costs what is costs (15 bn?) and so do advanced fighters (£ 100m+). Noteworthy though that over their 25 year history, Eurofighter and Rafale unit costs have exceeded their planned levels by 75% and 5% respectively… this is where we come back to the benefits from stable & l-t planning.

Slurpee
Slurpee
May 5, 2015 3:42 pm

In terms of role and capability, UK and French armed forces appear essentially equivalent. The UK has more hvy airlift, France has more amphib capability. France has larger troop numbers but about a quarter are tied up in garrison roles (Djibouti, horn of Africa, Guyana and Reunion). Both France and the UK would be hard pressed to deploy a brigade sized group and support for any length of time without stripping assets from elsewhere.

The budget increase is a blind, Hollande’s govt remaining cred is based on his tough militaristic bent (ironic for a socialist) so fielding 10’000 soldiers permanently where they aren’t really needed is good PR.

Finally, the UK has resorted to Private financing on at least one occasion for the Voyager tankers, Only time will tell whether this was a smart move.

WhitestElephant
WhitestElephant
May 5, 2015 5:53 pm

Slurpee,

Ocean, 2 x Albions and 3 x Bay class (109,000 t) v 3 x Mistral (63,000 t)

I’d say the UK has a clear advantage in amphibious capability, even with ocean gone in c.2020. Furthermore, the QE-class will be delivering a LPH amphibious capability as envision the the carrier enabled power projection plan.

The French LPD Siroco will be gone next month, so I suppose we shouldn’t count it.

ArmChairCivvy
ArmChairCivvy
May 5, 2015 8:06 pm

Slurpee, first of all welcome… we are not an unfriendly bunch.

But I have two points to make:

1. The French may have more first wave capacity (in amph.) as the vertical capacity is more and the over-the-beach part is also more modern. But: there is no 2nd and 3rd wave at all (the Points being the Brit 3rd wave)

2. PFI, yes, a very expensive way of massaging the national debt (pay 20% when you can do it for a fraction of that… at least for now). Another “but”: did not the French just “outlaw” the use of shell companies by the defence provider companies that were being used exactly for the same effect?

Martin
Editor
May 6, 2015 1:18 pm

I believe the French are consider a load of leases as their budget won’t cover their committed acquisitions. essentially the same as PFI.

PFI is not necessarily a bad thing. It’s the air tanker deal that was the real stinker.

Nick
Nick
May 6, 2015 1:56 pm

I sort of agree with Martin. A large proportion of civilian aircraft, trains and shipping are actually leased rather than bought. This issues are the interest rate on the embedded loan (governments should get a very very good rate as there is little to no financial risk) and the terms on which the equipment is used.

The problem in the UK is that the PFI/PPP arrangements seem to have high finance costs (even though the embedded loan terms are very long) and we seem to be writing them with combined service contracts which are very poorly scoped and priced.

I do wonder of the government might not be better served by hiring a bank (say) under a standard commercial arrangement rather than negotiating these deals themselves. I don’t see why the RAF shouldn’t lease Eurofighter engines from Rolls Royce (say) in the same way Emirates Airline will for the $10 billion Trent-900 deal and have a separate contract to maintain and service the engines.

Gloomy Northern Boy
Gloomy Northern Boy
May 6, 2015 11:56 pm

@Nick – I believe the Bank run by Fred (the Shred) Goodwin (Gordon Brown’s favourite banker) was involved, although in what capacity I know not. What I find puzzling is why PFI became the preferred method to secure what is essentially Rentier Capital through a complex process highly likely to offer opportunity profit to the Rentier at the cost of the taxpayer.

Why do we not issue “Defence of the Realm” 30 year bonds with a fixed yield through the Bank of England…and then buy and own the assets ourselves? Could even impose a requirement on foreign house purchasers in London that they match the cost of their palace in Mayfair with an investment in same of like value…

On the France/GB issue it seems to me pertinent that:

1 The French Republic preceded any idea of “international socialism” by some margin, and in consequence even quite left-wing French politicians are unapologetically patriotic…a tendency that I presume is encouraged by the “Grande Ecoles” at which many of them are educated.

2 By contrast, the left have been very strong in our great Universities from the fifties…when Ed’s Dad Ralph Milliband was making a pile writing popular history from a revolutionary Communist perspective… and I’m therefore assuming that the PPE Graduates of Oxford emerge from the place wracked with post-imperial guilt even if they themselves are of the political right.

3 Furthermore, the French think “multi-culturalism” utter bilge, and impose a diet of Liberte, Egalite and Fraternite…with the new addition of Laicite…without apology (although with limited success in some cases!)…

4…which means that French Presidents of both left and right do what they see as good for France… without being much pre-occupied with previous errors of judgement, or worried about how their actions might play in the Banlieue…

5…whereas our lot are a now overcome with horror about events in Afghanistan and Iraq, frightened to death about this “Vote” or that (in the collective, community sense)…and therefore much happier dreaming up ever better and more generous ways to bribe the electorate with their own or other people’s money.

A despairing Gloomy

Nick
Nick
May 7, 2015 5:52 am

I do find the governments inability to do things that Commercial organisations like Airlines do routinely surprising. I suspect that that they try too much to include too many complex terms in the associated service contract. Even there, you might have thought that the basic requirements would be very well understood by the guys who operated the previous arrangements and any good set of accountants and lawyers would be able to document the existing procedure and term it into a set of commercial performance criteria. Most civil servants aren’t specialist trained in either area, and even those who are may well lack sufficient experience.

I think the original idea behind PFI was to allow private sector businesses construct or operate specific assets while funding it themselves in return of a 20 to 30 year contract. Since the funding is specific to the contractor, they borrow at commercial risk rates, whereas the government would be able to fund more cheaply. Again I think the ideological part (private service provision) is the main culprit. Constructing an asset on a sale/leaseback type arrangement should be pretty straight forward, but making sure that the asset is then operated by the private sector under very specific terms designed in the office rather than in the field seems to be the problem.

Undoubtedly it would be much cheaper for the government to provide the finance. However, as the French routinely demonstrate, their private motorway operators are able to construct very expensive assets (eg Millau viaduct) on long term cheap finance. This is something that doesn’t seem to happen in the UK.

I’m not sure I agree with your point 5 though. Re Middle East adventures, I think the public are sick of spending our limited resources without any clear political objective or end game. Libya is a good example. It was absolutely right that we should have stopped Gadhafi from slaughtering Benghazi, but was it right that we went further than that ? Surely recent experience from Yugoslavia to Iraq suggests that the solution comes from within and is very messy and drawn out. Trying to pick winners at the outset, like we did in Iraq, Afghanistan, Libya and now Syria, doesn’t work unless you are prepared to back them with all of your resources. However, that just defers the problem.

On the election, I really don’t believe there are that many “don’t knows”. A lot are probable “don’t cares” who won’t vote and many will be “won’t say”. As for politicians, they are frightened to tell us the truth (like where the cuts will be made and extra spending is coming from) for fear that we wont vote for them. We know that UKIP/Tory view point is very highly split on the EU issue. And yet, If we have a Tory government, we don’t even know what Cameron want to actually change with our relationship with the EU (perhaps apart from a cap on EU migration, which is the least likely thing to actually happen). Worse still we don’t even know if this will be a negotiating position that entire Tory party can agree on.

As a result, many of us despise them for that and many many others don’t believe a word they say. I would guess the majority of voters today will have serious reservations about the party they choose to vote for.

martin
Editor
May 7, 2015 6:50 am

@ Nick – Too put up a straw man the argument used to support the crazy PFI’s like the air tanker consortium is that there were very few companies prepared to take on the job. If profits were unusually high then their should be more.

I agree about Whitehall making these contracts overly complicated. The aitanker PFI for instance has the consortium fixing 30 year fuel costs. That makes no sense to me at all.

Surely the RAF could just have leased then aircraft engine and ground facilities if it did not have the money to buy. That would take virtually all the risk off the consortium. Also paying for use of 5 planes is stupid. A much better idea would have been to use the A400M as a backup AAR tanker and just lease the 9 required for full time use.

Obviously it probably does not hurt that airtanker represents a massive amount of UK defence contractors all of whom have board seats and require consultants.

Chris
Chris
May 7, 2015 7:20 am

Nick – ref “don’t knows don’t cares won’t say” – I find myself in a don’t know situation even on the morning of the vote. An argument between heart & head; between the party with policies that seem most sensible on the one hand and the least bad option of the two leading parties on the other. Sometimes you wonder if the media pundits had been told to shut up and stop predicting vote/seat numbers whether more people would vote on issues and policies rather than to ‘stop the other lot’.

Whichever way it pans out, defence is in for tough times.

As for PFI, I thought it was blatant political flam – announcing vast new projects worth vast billions to get the political kudos, while all the time knowing their successors would have to pay for it all. Snigger snigger. (That is their political successors and your children and grandchildren, obviously.)

Nick
Nick
May 7, 2015 8:07 am

Chris

I sympathise. Personally I would say that no one party reflects 100 % of what I consider to be the most important issues facing the UK today (which are all economic related at the end of the day). I don’t know if I’m typical or not, but for me its goes down to the overall balance. I also believe that none of the parties will be able to implement their full plans and cut government deficit from c5% of GDP to the maximum sustainable level of c3 % of GDP even with a growing economy. The next 5 years might not be as tough as the last five, but it will be tough.

monkey
monkey
May 7, 2015 8:01 pm

Neil Findlay , a (rare) Labour MSP has proposed buying back the PFI deals from their holders , mostly banks,pension funds and insurance companies by raising extra taxes in Scotland. Scotland’s PFI debt, coupled with the Scottish Government’s capped non-profit distributing (NPD) contracts, stands at £35.3 billion , almost £6000 ( that GBP Great British Pounds) per person in Scotland . The legacy of the Scots who ran the UK , Blair and Brown for 13 years at least struck north of the border as hard as it struck south. A house of cards they have built and the Finance industry is holding all the Aces :-(

dave haine
dave haine
May 8, 2015 9:23 am

From commercial air ops point of view, one of the things that makes it all very simple is that the contract terms are all standardised and understood by all parties. For example, any airline could charter an aeroplane for one operation from anywhere in the world, on an ACMI (Aircraft, Crew, Maintenance & Insurance) basis; i.e. We give you money and you fly the op. A longer term charter would be on a ‘bare bones’ basis; i.e. We give you the money, and you lend us the aeroplane, we’ll look after it. ACMI is good for short-term, but can be costly, and barebones good for longer term, easier to control costs ifyou have the crew.

Even long-term contracts (between carrier & charterer) are on standard terms. Everyone understands and is clear- Any special provisions, over and above the standard terms adds to the cost.

The air tanker thing is effectively a kind of mutated, hybrid ACMI charter over a longer term, with special provisions.

It’s this idea of sub-leasing to cut cost’s, that is the stitcher. AirTanker have basically passed all commercial risk onto the MOD (properly in my opinion- If they have to back out of a sub-lease to meet an MOD requirement, it’ll cost them). This also explains why the A330’s haven’t got cargo doors- they’re configured for passenger charter ops (I understand a couple are on a long-term charter to Thomas Cook) which is a growth market, whereas the air cargo market has over-capacity, sound commercial sense.

…Maybe the MOD would have been better to opt for a straightforward barebones lease, after all they had the crew and maintenance staff, the only additional cost would have been training, and even then there would be an ongoing cost from the previous fleet, which could be carried on. Equally, maintenance costs.

ian
ian
June 4, 2015 12:26 pm
Reply to  Topman

I am not sure about the wages in FAF but as I am told army privates salaries are lower than the UK one would expect similar levels in FAF. However if private employment costs are reflected in the French Military then you can expect an 80% on cost for employers contributions. I can see however that as the state is the employer it would be less than that but still considerable.