back to article National Audit Office: UK's military is buying more than it can afford

Military kit costs are going to skyrocket, according to the National Audit Office, which claims the Ministry of Defence now needs to slash an extra £5.8bn from its budget over the next 10 years. “The affordability of the Equipment Plan is at greater risk than at any time since its inception,” intoned Sir Amyas Morse, the head …

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"intoned Sir Amyas Morse"

Are you sure? Maybe he just wrote it.

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Joke

"Morse...Maybe he just wrote it."

..or just tapped it out.

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Coat

"the price of an F-35A has dropped to around $100m (down from initial flyaway costs of $279m in 2007)"

Maybe it's because the planes won't be able to fly away?

Mine's the one with the catapult elastic in the pocket.

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With or without engine?

As above

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Stop

Re: Doctor Syntax

".....Maybe it's because the planes won't be able to fly away?......" <Yawn> Oh, sorry, it's just the hater comments are getting very boring. Exactly the same supercilious nonsense was said about the Phantom when we bought them, and there is still no end of bitter flannel being slung at the Tornado, both of which types gave long and valuable service.

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Trollface

"the artist formerly known as Westland, AgustaWestland, Leonardo, Leonardo Marconi."

You missed GKN in that lot! ;)

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Like the brilliant Tony Benn (RIP) once said, "If we can find the money to kill people, we can find the money to help people."

I'd sooner the billions were cut from the "Defence" budget and injected in to the NHS, instead of the other way round. Nearly 30 years on this Earth and I've never seen anything defended by the military, only invaded.

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Have an upvote for the sentiment, if not the detail.

I believe we need a military. If another country does "go rogue" and threaten us, we need the ability to respond in our defence. We also need to deter foreign powers from attacking us in the first place, and to be able to defend innocent civilians in other countries or help in a humanitarian crisis.

What we don't need to do is throw our weight around, invade countries because they have weapons of mass destruction oil we want, or be America's lap dog. We also, IMHO, don't need as much of a "nuclear deterrent" (or at least not to spend as much on it).

But above all of that, if we are cutting budgets left right and centre, then our current, reasonably safe, position should have entailed more cuts to the military and less to public services.

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I have no idea what UK is so afraid off to spend hundreds of billions. Immigrants?

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While your argument for keeping a military force is good, the problem is that it's generally been used to kill brown people and make corporations wealthy. We do not need the current level of military spending if we need a defensive force. Eisenhower provided the definitive statement on this which is well worth reading:

"A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction...

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence—economic, political, even spiritual—is felt in every city, every statehouse, every office of the federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted.

Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together."

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Re: wolfetone

"....Nearly 30 years on this Earth and I've never seen anything defended by the military, only invaded." Well, this summer will only be the 77th anniversary of the Battle of Britain, maybe they skipped talking about it in whatever progressive/anti-war/ill-educated (delete as you feel appropriate) household you were brought up in. The majority of the young pilots of the RAF in 1940 were a lot younger than thirty when they risked their lives fighting off the Luftwaffe, it's just a shame that people like you are too blinkered by trendy politics to acknowledge their sacrifice.

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Anonymous Coward

"Planning assumptions are currently based upon rates set before the result of the EU referendum"

Seriously? Amateurs are running MoD procurement? Still?

I suppose we have them running the Foreign Office, the Opposition, the Department for Transport, and the Department for Leaping into the Unknown without a Coherent Plan, so why am i surprised ......

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MOD-Pe

Have always been run by idiots. Nothing new there.

the MOD should get the Gubbermint to cancel the F-35 and startup building Harriers again. At least we'd have something to put into the air and use those two carriers.

I'm sure that a Harrier won't cost £100M each. Oh wait we need BAE to build them so perhaps they wiil.

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Re: MOD-Pe

I'm sure that a Harrier won't cost £100M each. Oh wait we need BAE to build them so perhaps they wiil.

It appears the BBC won't be needing Dunsfold for much longer; maybe BAE can reopen the Harrier plant there?

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Silly question...

I'm sure this must be a silly question, just as it's often mentioned as a throwaway sentence in many articles, but I need to ask it anyway:

When I buy things, both personally and in the jobs and places I've worked, I know how much the thing I'm buying is going to cost. This includes services and made to order / bespoke items and even long term arrangements / contracts.

So why does our military and government buy things at "estimated" prices and then end up paying such vast sums in addition? Surely there are suppliers who would do it at fixed prices?

Genuinely curious as the reason it always seems to happen and the cost is always to the customer - us

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"So why does our military and government buy things at "estimated" prices"

Because military systems are priced using all up costs. They include the cost of all the mfg hardware and then divide the number ordered.

Unlike normal businesses where you work out a break even quantity and aim to sell that many, then the profit margin goes up. Thus the theory that further copies are "cheaper."

But these government only products work on the concept of a fixed (allowed) profit margin to the suppliers. This is why when the XB70 programme was cancelled the whole programme cost was dropped on the 2 planes built, hence the idea of "$1Bn a plane."

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Re: Silly question...

"Surely there are suppliers who would do it at fixed prices?"

Yes, but fixed prices earn them less money, so the can't afford to 'compensate' anyone, hence they don't get any orders.

If you charge cost-plus, there's plenty of money sloshing around in 'discretionary' funds to ensure that your company wins the contract for the next weapons system.

Of course, all of the above is complete fiction and shouldn't be read as an allegation that the defence industry is corrupt. Definitely not insinuating that, don't know how you got that idea, ahem.

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"All those shiny new ships and aircraft will be of no use if they’ll just end up in mothballs"

How much of the running cost is people (paid in £) and how much fuel and supplies (paid in $)?

Or is the assumption that we'll be crippled by debt and unable to afford anything?

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Happy

Maybe Britain will benefit from this alledged upcoming repricing of the F-35

"We will negotiate a new deal on the F-35. It will be a great deal, I mean spectacular--really first-class. People--important people--are talking about what a great deal this will be." (We need a Donald Trump icon)

More seriously, any improvement in the cost of this plane will be welcome. Let's hope they can get the thing working and out of the factory for a cost that is less expensive than just paying our enemies to go away.

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Re: We need a Donald Trump icon

No we don't. He's racing the ad execs, the lawyers, the politicians and the patent trolls to be the first against the wall when the revolution comes.

And we already have a spawn of Satan icon anyway. It's not quite orange, but it is bald.

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Re: Maybe Britain will benefit from this alledged upcoming repricing of the F-35

Let's hope they can get the thing working and out of the factory for a cost that is less expensive than just paying our enemies to go away.

We could have avoided the entire Balkans conflict simply by giving the entire population TVs and content to watch. Millions of dollars and live saved.

Its not nukes that avoids war, its people watching the Kardashians, big brother and sport. (Used to be James Brown as well).

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Re: Maybe Britain will benefit from this alledged upcoming repricing of the F-35

...less expensive than just paying our enemies to go away.

Maybe that's the real plan with the F-35. Instead of using them to attack an enemy they would be given to the enemy as a "gift". Then, when the enemy goes bankrupt, you show up with some low interest loans to keep their economy afloat.

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WTF?

Re: Loud Speaker Re: Maybe Britain will benefit from this alledged upcoming....

".....We could have avoided the entire Balkans conflict simply by giving the entire population TVs...." I am continually amazed at how ignorant some people are of the former Yugoslavia. Having visited long before the Balkans mess, I can assure you they had plenty of TVs and content, including satellite and DVDs. Yes, they made crap cars like the Yugo, but they had an advanced economy and didn't live in grass huts.

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Pirate

And the winner is...

All those shiny new ships and aircraft will be of no use if they’ll just end up in mothballs.

No, they were of great use to the contractors who got paid a boatload of quid for them. Of course, they would earn the contractors even more for spares and support if kept in service, but BAE et al. would, I'm certain, be content to ride off into the sunset with just the initial costs after those assets are mothballed, should that happen.

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Re: And the winner is...

You can easily save $5 billion a year in maintenance by selling the kit that doesn't work to Canada. And sleep the Sleep of the Just in the knowledge that it will never be used against you. Or anybody, in all likelihood.

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Re: And the winner is...

selling the kit that doesn't work to Canada.

Sounds like you're in the market for a submarine. I can get you a great price, all you have to do is fish it out of the English Channel. May need some body work.

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Mushroom

Re: And the winner is...

Sounds like you're in the market for a submarine. I can get you a great price, all you have to do is fish it out of the English Channel.

There's a load of unexploded[1] ordinance going cheep[2] nearby too. Just outside London.

Of course, getting it shipped might be an interesting process.

[1] Currently. I suspect that wouldn't remain the state for long if people start messing with it.

[2] Better going cheep than kaboom.

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2% of GDP on Defence

What annoys me most is MoD spokes people hiding behind the 'we spend 2% of GDP on defence' and/or '5th biggest defence budget' lines. That's cock all use if it doesn't fund what you're trying to do, either fund defence to actually fulfill your ambitions, or scale you ambitions to fit your funding. Stop taking the third option of ordering things and then cutting in year spending to move costs down the road.

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Re: 2% of GDP on Defence

Actually if you look at what the US government is saying, and what the UK government is replying, it is ALL about money. How much money the British taxpayer is going to fork over to the American shareholder, executive and the rest of the MICC.

As a few other comments have pointed out, the UK today - and in the foreseeable future - faces few serious military threats. The real threats that could take us down are of a nature against which weapons are utterly useless - for instance hyperinflation, massive immigration, degradation of our food and fresh water, etc.

The UK would do well to take a leaf out of Russia's book. Neither country has any plans to attack anyone else or to grab anyone else's resources. So the problem is just a matter of perimeter defence. The UK's perimeter, of course, is vastly smaller than Russia's. Moreover, much of it is somewhat protected by friendly (and at the moment allied) nations. All we need is a small but effective fleet - no aircraft carriers need apply - with maybe a dozen good hunter-killer submarines, powerful missile and aircraft defences against bombers and warships, and a small but highly automated and mobile army as a last line of defence. We would be far safer without thermonuclear weapons, which merely make us a default target in any exchange of such weapons that breaks out for any reason anywhere in the world.

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Facepalm

Re: 2% of GDP on Defence

Hehe. I'm not sure Russia was a great example to use about someone just doing border defence... *cough*South Ossetia*cough*crimea*cough*Abkazia*cough

I guess it depends where you consider your actual borders and where the rest of the world considers them, right?

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WTF?

Peace loving Russia

The UK would do well to take a leaf out of Russia's book. Neither country has any plans to attack anyone else or to grab anyone else's resources.

Now that Russia has annexed the Crimea? Tell that to the people in the Ukraine, and indeed the Baltic States.

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Re: 2% of GDP on Defence

All three examples you cite were cases where a Russian population had ended up under "foreign" rule because of the disorderly break-up of the USSR. In Abkazia and South Ossetia the Georgians, egged on by Washington and NATO, launched a ruthless attack which killed many civilians and Russian soldiers - entirely without warning. (Indeed it was carefully timed to catch Mr Putin in Beijing for the Olympic Games). The Russians reacted quickly, drove the Georgians out of Abkhazia and South Ossetia, and figuratively had them lying helpless on their back with a Russian sword at their throat. Then the Russians stepped back into their own country without any attempt to take Georgia back into Russia.

In the case of Crimea, first of all Crimea had been an integral part of Russia since before the USA existed. (1783). Second, Russians shed as much blood for Crimea as Americans shed in their Civil War - defending against an entirely unprovoked invasion by Britain and France, together with Turkey, and later against the Nazis. It's unreasonable to think they would give it up; it is a far more vital part of Russia than the Falklands, for instance, are of the UK.

Moreover, the citizens of Crimea were never even consulted when Ukraine declared itself an independent nation after the dissolution of the USSR. It had only become (technically) part of Ukraine by courtesy of Khrushchev - himself Ukrainian - in 1954. And that didn't apply to Sevastopol, which has always had a separate status as a Russian city.

Ever since the Treaty of Versailles in 1919, the Western powers have made great play with two principles: the territorial integrity of nations, and the self-determination of peoples. Cleverly, these two principles are mutually incompatible: citizens cannot decide to form their own government and break away from an existing nation without the permission of that nation's government. Oh, except in Kosovo and South Sudan and South Korea and South Vietnam and Ukraine... (in other words, wherever the US government says so).

By choosing which of these two supreme principles is to be applied in a given situation, Washington can always get whatever it wants. The people of Kosovo wanted independence from Serbia, so of course they were given it. But if the people of Crimea wanted independence from Ukraine... too bad, that would infringe the rights of the Ukrainian government!

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Re: Peace loving Russia

Russia did not "annexe" the Crimea. Its government agreed to the request of the Crimean people to be re-admitted to Russian citizenship. That wish was expressed in an overwhelming referendum result.

As for the Baltic states, what of them? No one in Russia has the slightest wish to conquer them. They have little of value, and their own people are rapidly leaving them for better prospects in "the West". Recently when the Lithuanians spoke of building a wall to seal their border with Russia, the Russian governor of Kaliningrad offered to provide the necessary bricks. http://russia-insider.com/en/politics/russia-masterfully-trolls-lithuania-you-build-wall-well-pay-it/ri18661

Russia is almost unique among major nations in having more territory than its population can handle, and vast amounts of untapped resources. (Which is why Washington wants to seize control of it). Why would it want to take over three tiny, resource-poor states largely populated by foreigners who hate Russia?

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Re: In Abkazia and South Ossetia

Товарищ Archtech, за успешной борьбы на идеологическом фронте награждаем вас...вилочкой и туфлями.

ic.pics.livejournal.com/re1ayer/16354475/948/948_320.jpg

ru-vilochka.livejournal.com

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FAIL

Re: In Abkazia and South Ossetia

If Crimea was always Russian and so should be part of Russia, I take it you have absolutely no objection to if Poland or Germany annex Kalingrad? I mean it was part of Prussia (thats the Germans) since before the 12th Century. That's a lot longer than crimea is Russian (since that only dates to 1783 - before that it was the Crimean Khanate ruled by the Crimean Tartars).

What about the Kuril Islands? I guess you will have no Problem if Japan annexes those? I mean they've only been russian since WW2, they were Japanese for 500 years before that. Doesnt that always count as Japanese if Crimea always Counts as Russian?

And large parts of what is now Russia totally belonged to the Mongol Golden Horde. Maybe it should return to Mongolia now?

You can make up claims for historical backing as much as you want, the truth is if you annex a land based on that, then you better be prepared for others to demand the same from you when there Claims are significantly stronger...

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Re: In Abkazia and South Ossetia

Que? I don't understand Russian.

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Re: In Abkazia and South Ossetia

I just hope you people with the hard-on for Russia aren't British. I can (just about) understand Eastern Europeans whose ancestors got ground up in the wars over there nursing a hatred of Russia. But you should remember who started WW2 - not Russia. After being invaded by Europeans for the third or fourth time, coming within a hairbreadth of ultimate defeat - which would have meant extermination or slavery - and losing 27 million lives, it's understandable to any rational person why they decided to retain a wide buffer zone. Hence the Iron Curtain, which guaranteed for 45 years that any Western invasion of Russia would have to start from several hundred miles further West.

There has never been any good reason for Britain to be an enemy of Russia - although in fact Britain has invaded Russia twice and caused hundreds of thousands of Russian deaths, without the slightest provocation.

How many times has Russia invaded Britain? (Potential maybe-perhaps-someday encroachments on the Glorious Indian Raj don't count).

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Re: In Abkazia and South Ossetia

You are arguing, most perversely, on the basis that one state should never annexe territory from another. However the Crimean situation is based on the fact that (1) the Crimeans were never asked if they wanted to be part of Ukraine in the first place, and (2) when they were asked, about 90% of them voted to return to Russia.

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Re: In Abkazia and South Ossetia

Whilst I would far rather have cordial relations with Russia and regret the promise that Gorbachev showed in thawing relations was not carried through (on many sides) and acknowledging that as a Brit I should be aware of the less glorious parts of our history as judged by modern standards, I really must take issue about Russia "not starting WW2" in the same way.

The Molotov-Ribbentrop pact sent Russian troops into Poland at the same time as the Nazis, certainly oiling the cogs of the process that kicked it all off. There may well have been good reason "buying time to build up defences" etc, but many Poles might see the issue in a rather different light.

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Re: Archtech Re: In Abkazia and South Ossetia

"......But you should remember who started WW2 - not Russia....." Very debatable given how the Soviets attempted to spread Communism through revolution throughout Western Europe. Spain's Civil War is a good example of Russia's meddling in Europe and is considered by some historians to be the real first action of WW2.

"....and losing 27 million lives...." One of the reasons the Russians suffered such high losses was Stalin's pre-War purges and horrendously ineffective government, which slaughtered millions through executions and starvation, and left the Soviet forces poorly led, poorly positioned and poorly equipped to face the Nazi invasion. Stalin thought nothing of sending such poorly led and equipped troops to certain death in the vain hope of slowing the German advance. For lefties to now whine about "Russian losses in the Great Patriotic War" is to completely fail to understand that Stalin and Communist policies were the direct cause of those losses.

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Manpower?

Given that the combined manpower/womanpower of all three services now runs at about 157, most of them admirals and generals, that's a shitload of money to be spending on hardware - and £23.5 beeeelyon on IT, even over 10 years, buys a heck of a lot of cat5 cabling and laptops. Or is it an IBM project manager for a year?

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Re: Manpower?

The UK's total "defence" spending is quite close to Russia's. Just look at the difference in capability.

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Defence Procurement – Where it has all gone wrong

Despite the countless MoD reviews undertaken over the last several decades to identify failings in its defence procurement process, there remain barriers which continue to hamper the achievement of acquisition goals. Some of these barriers are:

(a) The instrument of competition has been rendered ineffective by Bidders who are quoting identical bottom-line Selling Prices against the same Requirement – thereby denying MoD Abbey Wood Team Leader the opportunity to select the preferred single Contractor on the basis of price competitiveness – and therefore value for money.

(b) MoD’s Competition Policy is further undermined by the ‘revolving door’ which continues to allow procurement team members to take up appointments with Bidders whilst the competition is still under way.

(c) The decision on which Bidders to down-select for the next phase is dependent upon warm soothing words, false promises and hollow statements of intent offered in Management Plans, instead of the much more sensible way of selecting Bidders on the basis of their performance measured during the previous phase.

(d) The extended industrial Supply Chain remains infested by distortions and inefficiencies because lower-tier subcontractors are continuing to mark-up goods and services, without adding any value. In addition, competition is not being applied by ITT recipients to select first and lower-tier Contractors. Instead, they are chosen using the old boys’ network or during a gathering at the 19th Hole limited to the great-and-the-good from subsidiary companies wholly-owned by the ITT recipient, or some other favoured, old school-tie chums – which has, in itself, allowed the continuance of corrupt practices.

(e) The widespread practice of digging out old ITTs from the archives, dusting them off, searching & replacing the project name and despatching them off to industry has resulted in the Principles of Natural Justice being routinely violated, because selection criteria essential to inform the decision on down-selection phase-by-phase is omitted – leaving Bidders in the dark as to what evaluation criteria they will be measured against.

(f) The probability of the pre-programmed schedule being ‘eroded’ during performance of the Contract is 100 percent, on account of Contractors enforcing a minimalist staffing policy of being just ‘one-man’ deep, in many of their specialist core functions with no slack or succession plan.

(g) The talent pool from which appointees for acquisition roles are drawn has only succeeded in supplying a steady stream of people who are ill-equipped to deal with the Private Sector – yet they are put in charge of spending public money! This situation has, in turn, led to dramatically reduced confidence in any new policy initiatives advanced by DE&S amongst wider MoD stakeholders and interested observers, such as Members of Parliament, National Audit Office and Treasury officials.

(h) There is no evidence of MoD’s long-standing policy of securing input of Private Sector capital into defence programmes being applied, which means that projects continue to be funded exclusively by the taxpayer – yet, the Intellectual Property Rights for the resultant fully engineered equipment, which rightly belong to the MoD, is simply handed over to the main Contractor for nothing in return.

(i) Technical risks are allowed to accumulate towards the end of acquisition cycle where they suddenly morph into 'show stopping' risks and come to the fore immediately after the main investment decision has been taken (never before), forcing Team Leader to raise Contract Amendments and let short-term, renewable Post Design Services Contracts which, in turn, has led to MoD getting appallingly poor value for money these last several decades.

It’s not so much a lack of skills at MoD Abbey Wood that is the problem, but a surplus of people with the wrong skills. The fact of the matter is that innovation and new ways of working will only come after the headcount has been cut, not before!

@JagPatel3 on twitter

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Reply

quote

Like the brilliant Tony Benn (RIP) once said, "If we can find the money to kill people, we can find the money to help people."

unquote

That observation is probably the one that started SALT talks and could possibly lead to the human race surviving.

Didn't Stephen Hawkin predict extinction of our species within the next 1000 years or so?

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Re: Reply

Stephen Hawking's always doing that -- aliens, AI, nukes,global warming etc.

In reality, even if one of those things happens, we have more capability of surviving as a species now that we ever have. Whether or not you want to be one of those survivors who has to clean up the mess, is another issue.

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Our military spending might be considerably less if we'd stop wandering into countries where we have no business being.

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Anonymous Coward

What the MoD needs

Is to grow a pair of bollocks when dealing with suppliers.

Vet and clear more of them and encourage competition.

Then your prices might come back down to Earth.

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Re: What the MoD needs

Don't be silly.

The MoD only exists to keep those suppliers in orders.

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I can't speak to the UK (although I *assume* it's a similar situation), in the US defense spending is in reality little more than a jobs program. Politicians want the pork for their state or they will not be re-elected, and defense spending is . Actual defense is secondary. Not to mention, with all it's military might the US's only "successful wars" since WWII were in the 1980's (Panama and Guatemala - Not exactly super powers). In the US defense spending is about 3.5% of GDP. That's a lot of jobs.

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