British Defence News

Financial Times
August 2009

Edited by Andy Ross

Did Brown Bury Damning Report?

Gordon Brown was accused of suppressing a "damning" review of defence procurement policy that concluded billions of pounds were being wasted. The report was due to be published in July but was delayed. It finds that the Ministry of Defence has just two-thirds of the funds it needs to meet existing commitments to buy equipment.

Compensating Injured Soldiers

The regime for compensating wounded soldiers appeared in disarray as Downing Street expressed sympathy with a senior government aide who described the policy as "profoundly wrong". The Ministry of Defence is pressing ahead with a legal case to reduce compensation to two wounded servicemen. A review is under way.

Fewer Eurofighters

The four partner nations behind the Eurofighter Typhoon have signed a deal for the third batch of the fighter jets, but the Ministry of Defence ruled out plans to buy its final quota of aircraft. Officials meeting in Germany placed orders worth €9 billion for 112 aircraft with the Eurofighter consortium in return for commitments to cut the cost of supporting them.

Army Vehicle Procurement

The government is moving ahead with a £16 billion programme to acquire thousands of multi-purpose armoured vehicles for the military. Soon the Ministry of Defence will send a final invitation to contractors BAE Systems and General Dynamics (UK) to bid for a chunk of the Future Rapid Effects System project worth up to £2 billion. In total the MoD plans to buy about 1200 specialist vehicles comprising three families, including reconnaissance, medium armour and manoeuvre support.

Helicopter Clarification

Gordon Brown ordered a Foreign Office minister to "clarify" claims that British troops did not have enough helicopters in Afghanistan and insisted that recent deaths on the front line were not due to a lack of air support. Lord Malloch-Brown, the Foreign Office minister responsible for Afghanistan: "We definitely don't have enough helicopters."

Big Navy Deal

The Ministry of Defence and BVT Surface Fleet, a joint venture between BAE Systems and VT Group, have signed a landmark agreement worth at least £3.5 billion to sustain the British shipbuilding industry over the next 15 years. Under the legally binding agreement, BVT has committed to find at least £350 million of cost savings over 15 years in return for a guaranteed minimum workload. The MoD decision to delay the two aircraft carriers for two years has led to a £1 billion increase in costs.

No Defence Budget Cuts?

Lord Mandelson added defence to the list of "essential frontline services" that Labour wants to protect from spending cuts. Treasury plans assume cuts in defence spending in both nominal and real terms next year. In 2010-11, total defence spending is projected by the Treasury to fall by just over £2 billion to £45.5 billion.

New British Army Head

Gordon Brown is viewing the arrival of a new head of the British Army next month as an opportunity to draw a line under an embarrassing period of public infighting between the government and the military over the Afghan war. General Sir Richard Dannatt, the chief of the general staff, publicly stepped up demands for more resources for British troops fighting in Helmand.

Nuclear Sub Plans

The government is to delay a spending decision affecting plans to replace its independent nuclear deterrent. Officials said the government would not place the initial design contract to build a new submarine platform for the deterrent until after the 2010 general election. Plans for four new submarines to replace the existing Vanguard fleet would have cost up to £3 billion as the first tranche of spending in a £20 billion project intended to put new submarines in service by 2024.