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Defence review must be built on firm strategic and financial foundations

18 June 2018

The Ministry of Defence's Modernising Defence Programme (MDP) must address the challenges presented by the resurgence of  state-based threats and be supported by a fully-funded and sustainable financial settlement, says a report published by the Defence Committee.

The report, entitled Beyond 2 per cent, has been produced ahead of the anticipated release of ‘high-level findings' by the MDP, towards the end of June. It examines how the process has proceeded and highlights areas, including capability, commercial practices, recruitment and international partnerships, which the Committee expects the review to consider.

The report explores how the MDP had its origins in the decision taken in mid-2017 to initiate the National Security Capability Review (NSCR) in response to the development of new and intensified threats facing the United Kingdom. The aim of the NSCR was to ‘refresh' the findings of the 2015 Strategic Defence and Security Review and look again at capabilities across 12 broad areas of national security policy, including Defence. However, the ‘fiscally neutral' nature of the NSCR meant that any new resources applied to some aspects of national security would entail reductions in resources available to others – even though the emergence of new threats had not been accompanied by the disappearance of pre- existing ones.

The procedural and financial restrictions of the NSCR led to a range of options being produced which would have resulted in substantial cuts in defence capability across the Armed Forces, such the potential loss of the specialist assault ships HMS Albion and HMS Bulwark. The Defence Secretary, Gavin Williamson, who later described the NSCR as a ‘straightjacket', succeeded in having the Defence element of the NSCR taken out and then initiated the MDP.

The Committee's report congratulates him for taking this bold step. The MDP is seen as an opportunity to review comprehensively the UK's strategic position and the military requirements which flow from that analysis. It can, in this way, be a fully strategy-led exercise, reflecting the increase in the range and intensity of threats posed by state actors, in addition to ongoing international terrorist campaigns.
According to the report, failing to finance Defence on a sustainable basis will continue to result in supposedly settled policy having to be revisited. This makes the implementation of long-term strategy very difficult and fuels the impression that Defence is inherently financially unstable.

The report concludes that the only solution is to move spending on Defence closer to 3% of GDP – approaching the level of investment made by the UK from the end of the Cold War until the mid-1990s. This could produce a long-term settlement providing strategic and financial stability. Although further reform within the scope of the MDP will be necessary, for the MoD to prove that it can be the ‘responsible owner' of a new settlement, it should not be based on elusive and ambitious ‘efficiency savings' in order to make ends meet.

Chair's comments

Dr Julian Lewis, Defence Committee chairman, said:

"We hope that our report will assist in sparking debate  and focusing minds on priorities that should be considered by the Modernising Defence Programme. The Secretary of State was right to remove Defence from the National Security Capability Review which would otherwise have resulted in further disastrous cuts to the Armed Forces, and we endorse his efforts to obtain a better settlement for Defence.

The Government now needs to look beyond the two per cent minimum on Defence spending, and begin moving towards a figure of three per cent, to place our defence policy on a sustainable basis to meet new threats and fill existing financial ‘black holes'. Defence is constantly described as the first duty of government. The MDP is the government's opportunity to show that it means what it says."

Further information

Image: Crown copyright