The Strategic Defence and Security Review and the National Security Strategy - Defence Committee Contents

4  Strategic Defence and Security Review


84.  Following the May 2010 General Election, the new Coalition Government started work on a Strategic Defence and Security Review. This was the first defence review for 12 years, the last having taken place in 1998. Unlike previous Strategic Defence Reviews, the review was widened to include security matters and was to be overseen by the new National Security Council and developed alongside a new National Security Strategy and a Comprehensive Spending Review. The Ministry of Defence's written evidence to our earlier inquiry into the processes followed in the development of the SDSR stated: [89]

The combination of the SDSR and NSS will provide a coherent approach to security across Government and ensure the right balance of resources to meet our commitments. It is a fundamental objective to ensure that our Armed Forces have what they need to do what is asked of them.

The approach being taken by the NSC involves analysis of national security policy and capability across all relevant Government Departments and agencies. For this reason the Review is being led from the centre of Government, the Cabinet Office working with the Treasury. Defence capabilities and resources are accordingly being considered alongside all other security capabilities in order to measure the relative cost effectiveness of each. Cost effectiveness of capabilities will be measured by what they offer and how effective they are at addressing the defence and security challenges of the 21st Century. This will enable Ministers to consider relative priorities across all national security capabilities in an integrated way. Depending on the outcome of the SDSR, some national security capabilities may be reduced to enhance others if that provides the most effective means of protecting the UK's national security interests.

85.  The previous Government had started work on a new SDR in late 2009 and published a Green Paper in February 2010. When taking up post in May 2011, Rt Hon Liam Fox MP, Secretary of State for Defence, initiated work in the MoD on the new widened review. The MoD undertook 41 individual policy and capability studies in respect of the SDSR. The conclusions of the SDSR were published as a White Paper[90] on 19 October 2010 with the Prime Minister making a statement to the House.[91] It is proposed that future SDSRs shall be held every five years with the next one due in 2015.[92] We commend the Government on the principle of their stated intention of regular SDSRs every five years. A gap of 12 years between reviews should never be allowed to occur again. However we have concerns that future SDSRs will therefore be tied too closely to the electoral cycle and call on the Government to explore ways of breaking this link. Whilst welcoming the widening of the scope of the review to include security issues, we repeat the concern expressed in our earlier Report on the SDSR process that there is some risk of dilution of the defence contribution due to possible immediate or short term threats which may dominate the agenda to the exclusion of long-term defence assessments by the MoD.

86.  The SDSR stated that "Afghanistan remains the main effort of Defence [...] and the Government is fully committed to ensuring that the campaign is properly resourced, funded and equipped".[93] Since publication of the SDSR, UK Armed Forces have also been committed to operations in Libya under UN Security Council Resolution 1973. We assess the impact of this new operation in the context of the SDSR later in this report. We agree with the Government's statement in the SDSR that Afghanistan remains the top priority. We shall continue to monitor the Government's pledge that operations there will be properly resourced, funded and equipped. We note that since publication of the SDSR UK Armed Forces have been committed to operations in Libya. We will monitor this operation closely and will be conducting an inquiry into Operations in Libya in October 2011.

87.  In November 2010, the then new Chief of the Defence Staff, General Sir David Richards explained to us his interpretation of the SDSR:[94]

My interpretation, as we would operate within the military, is that the Commander's intent is the National Security Strategy, while our detailed orders are the SDSR document. As I have said a couple of times, I think the National Security Strategy—we could debate whether it is a strategy in the sense of a grand strategy, which is a different issue, but it has clear aiming points for all of us—is good and clear. We need to get there; how quickly is the issue. The SDSR is our immediate aiming point—i.e. Future Force 2020. While we veer and haul around what is deliverable within the 2020 time line, and I am sure you will want to probe into that, that is my interpretation of orders. But, as with everything else in military operations, the enemy has a vote and money is a factor—all the things we know will make aspects of the SDSR challenging to deliver.

88.  The SDSR started by expanding on the eight National Security Tasks contained in the NSS and sets out "more detailed planning guidelines on how they are to be achieved"[95] and goes on to state that "these will drive detailed decisions by departments over the next five years on how to prioritise resource allocation and capability development."[96] The following sections attempted to "explain how all government departments will implement these new National Security Tasks and Planning Guidelines".[97] These were followed by sections on the implications for alliances and the structural reforms required to implement these changes.

Military Tasks and Defence Planning Assumptions

89.  The SDSR stated that the UK "will take a new approach to developing and employing the Armed forces, consistent with the key elements of the adaptable posture" and will "deliver a major restructuring of the Armed Forces in order to generate future military capabilities."[98]

90.  The MoD's written evidence stated:[99]

Based on the adaptable posture the NSC agreed a set of eight cross-cutting National Security Tasks that link to the priorities set out in NSS, with more detailed Planning Guidelines on how they are to be achieved. These will drive detailed decisions by Departments over the next five years on how to prioritise resource allocation and capability development.

Within the overall framework of the National Security Tasks the contribution of the Armed Forces is further defined through Military Tasks, which describe what the Government may ask the Armed Forces to undertake; and through more detailed Defence Planning Assumptions about the size of the operations we plan to undertake, how often we might undertake them, how far away from permanent bases, with which partners and allies, and how soon we expect to recover from the effort involved. The seven Military Tasks are:

  • defending the UK and its Overseas Territories
  • providing strategic intelligence
  • providing nuclear deterrence
  • supporting civil emergency organisations in times of crisis
  • defending our interests by projecting power strategically and through expeditionary interventions
  • providing a defence contribution to UK influence
  • providing security for stabilisation.

The new Defence Planning Assumptions envisage that the Armed Forces in the future will be sized and shaped to conduct:

  • an enduring stabilisation operation at around brigade level (up to 6,500 personnel) with maritime and air support as required, while also conducting:
  • one non-enduring complex intervention (up to 2,000 personnel), and
  • one non-enduring simple intervention (up to 1,000 personnel);

or alternatively:

  • three non-enduring operations if we were not already engaged in an enduring operation;


  • for a limited time, and with sufficient warning, committing all our effort to a one-off intervention of up to three brigades, with maritime and air support (around 30,000, two-thirds of the force deployed to Iraq in 2003).

91.  The SDSR stated that the new Defence Planning Assumptions (DPAs) "serve as a planning tool to guide us in developing our forces rather than a set of fixed operational plans or a prediction of the precise operations we will undertake".[100] The SDSR also outlined, for planning purposes, the three types of operations that the Armed Forces might be required to undertake:[101]

  • standing commitments, which are permanent operations essential to our security or to support key British interests around the world;
  • intervention operations, which are short-term, high-impact military deployments;
  • stabilisation operations, which are longer-term mainly land-based operations to stabilise and resolve conflict situations primarily in support of reconstruction and development and normally in partnership with others.

Operations are further divided into:

  • non-enduring operations, which last less than six months, typically requiring a force to be deployed and then withdrawn without replacement. Examples might include evacuation of UK citizens (as in Lebanon in 2006) or a counter-terrorist strike operation
  • enduring operations, which last for more than six months and normally require units to carry out a tour of duty and then be replaced by other similar units.

These descriptions help us to structure and scale our forces, rather than to plan for specific operations. In reality there is considerable overlap between types of operation and our forces must be flexible enough to adapt.

92.  One of the intentions of the SDSR was to "confront the legacy of overstretch." It asserted that "between 2006 and 2009 UK forces were deployed at medium scale in both Iraq and Afghanistan" and that "this exceeded the planning assumptions that had set the size of our forces and placed greater demands both on our people and on their equipment than had been planned for."[102]

93.  Admiral Sir Mark Stanhope suggested that the DPAs demonstrated the UK's national ambition:[103]

Following on from the obvious Afghanistan focus, national ambition seems to be set by a sense that we are quite clear that we want to remain a player on the world stage in international security and defence at a given level. That is defined by the defence planning assumptions, which are: a stabilisation operation at a slightly smaller scale than Afghanistan, a complex intervention for example Libya, and another non-complex operation of an evacuation scale. Those latter two are timed to be no longer than six months. There is a clear ambition that this is what we want to achieve, as well as recognising the day-to-day business.

94.  The single Service Chiefs told us that the current operations in Afghanistan and Libya were within the Defence Planning Assumptions in the SDSR. Admiral Mark Stanhope noted that according to the DPAs the Navy was not currently overstretched:[104]

In terms of the defence planning assumption as one stabilisation operation and two complex and non-complex operations—likening Libya to a complex operation—according to the requirement, no, we are not. We are stretched, though, across the other requirements, which makes it quite challenging.

Given the current tempo of operations, the single Service Chiefs agreed that their respective Services were stretched but not overstretched.[105] In June 2011 tensions arose between senior military personnel and the prime Minister following comments by Admiral Sir Mark Stanhope and Air Chief Marshal Sir Simon Bryant regarding the demands being placed on the Armed Forces.

95.  Air Chief Marshal Lord Stirrup, former CDS, was concerned about potential circumstances arising that would be very serious for UK national security. He commented:[106]

We need to keep something, in terms of contingency, in reserve to deal with such very serious threats, should they materialise. So, I get very concerned not only about exceeding the defence planning assumptions, but about committing everything we have to continuing operations. This is not about keeping everything in reserve, just in case something comes up; that clearly does not make any sense. However, it is about keeping sufficient contingency to deal with the unexpected when it is very close to home in terms of our interests.

96.  Wing Commander Andrew Brookes, Director, Air League (which exists to promote the cause of British aviation), went further and asserted that the UK could not carry out all the tasks envisaged in the DPAs:[107]

There are three tasks that are laid down: an enduring stabilisation operation, a non-enduring complex and a non-enduring civil intervention—that is, an Afghanistan, a Libya and rescuing everybody out of Zimbabwe. We can no longer do the third; the third is beyond us. We already do not have the funding to do what is in there.

97.  When he was Shadow Secretary of State for Defence, on 30 April 2010, the current Secretary of State for Defence wrote that "a future Conservative Government will aim to bring commitments and resources into line".[108]

98.  While we acknowledge that the Defence Planning Assumptions in the SDSR serve as a planning tool rather than a set of fixed operational plans or a prediction of precise operations that will be undertaken, we are concerned that as currently applied they suggest that UK Armed Forces will be continually operating at the maximum level envisaged by the Assumptions. This has serious implications. The Government should ensure that sufficient contingency is retained to deal with the unexpected. It is not sufficient to wait for the end of combat operations in Afghanistan at the end of 2014.

99.  We note the Government's intention to "confront the legacy of overstretch" citing the operations in Iraq and Afghanistan from 2006-09 as examples. The new Defence Planning Assumptions in the SDSR suggest that in future the Armed Forces would not be asked to undertake operations of a similar nature to Iraq and Afghanistan simultaneously. The Government should indicate if this is the case in their response to this Report.

100.  When committing to undertake new operations, such as Libya, the Government should state from the outset where that operation fits in the Defence Planning Assumptions and which of the military tasks it is meeting. This should not be limited to the numbers of Armed Forces personnel required, but also the capabilities that will be deployed and the consequences that this may have for other operations or wider defence-related matters, such as the defence budget and defence industry priorities. We can only conclude that the Government has postponed the sensible aspiration of bringing commitments and resources into line, in that it has taken on the new commitment of Libya while reducing the resources available to the MoD.

Decisions affecting Military capability

101.  As part of the move towards Future Force 2020, the SDSR announced several changes to the configuration of each of the Services.[109] The recommendations were wide-ranging and some extremely controversial. Among the proposals were:

  • to decommission the UK's current aircraft carriers and Harrier aircraft, thereby creating a 10-year gap in Carrier Strike capability.
  • To continue with the procurement of the Queen Elizabeth-class aircraft carrier and procure the carrier-variant of the Joint Strike Fighter (JSF) from 2020.
  • To withdraw all British Forces in Germany by 2020.
  • Immediately to cancel the Nimrod MRA4 programme.
  • To close as surplus to RAF requirements RAF Kinloss and two other RAF bases

We were unable to cover all the capability decisions contained in the SDSR, instead concentrating on those listed above and examining how they flowed from the NSS and the military tasks, Defence Planning Assumptions and the plans for Future Force 2020 listed in the SDSR.


102.  The Aircraft Carrier and Harrier Force decisions caused much debate during our inquiry and formed the bulk of the written evidence we received.[110] We focused on the plan to go ahead with procuring both Queen Elizabeth carriers, the uncertainty of the future role of the second carrier and the 10-year gap in carrier-strike capability caused by the replacement of the Harrier fleet with the carrier-variant of the JSF and the installation of catapult and arrestor gear.

103.  At a strategic level, Professor Chalmers from RUSI was uncertain how the decisions flowed from the NSS: "in the discussion of the aircraft carrier decision, there was an explicit difference drawn out between the threat environment that we face in the next 10 years, which doesn't require carrier-based aircraft, and what we anticipate after that, which does. But that isn't related back to the analysis in the NSS."[111]

A single operational carrier

104.  The SDSR announced that HMS Ark Royal would be decommissioned immediately. Following a short further study after the SDSR, the MoD announced that HMS Illustrious would leave service in 2014 after Helicopter carrier HMS Ocean returned to service after a planned refit and that HMS Ocean would be retained to provide a helicopter platform capability in the longer term.[112]

105.  The Government decided to continue with the procurement, started under the previous Administration, of two Queen Elizabeth class aircraft carriers which would provide the carrier strike capability from 2020. Although the SDSR accepted the "strategic requirement for a future carrier strike capability", it could not foresee circumstances in which the UK would require the scale of strike capability planned by the procurement of two Queen Elizabeth class aircraft carriers. It is therefore planned to operate only one of the aircraft carriers with the other held at extended readiness which left open the options "to rotate them, to ensure a continuous UK carrier-strike capability; or to regenerate more quickly a two-carrier strike capability." The SDSR also stated that one of the carriers might be sold and the UK would rely on cooperation with a 'close ally' to provide continuous carrier-strike capability. The next SDSR in 2015 would review these options to take account of how the "future strategic environment develops".[113]

106.  First Sea Lord and Chief of Naval Staff, Admiral Sir Mark Stanhope, commented on having only one operational carrier:[114]

I'm very clear that if you want to have a capability that's available to this nation continuously, you can't do that with one carrier. The French one is a good example. You have your capability five years in eight, because three years, roughly, are taken up either maintaining it or working it up. So if you want a continuous capability, you need both carriers. The options sit in the SDSR, and you're quite right: there is some indecision. But we're building both carriers, and that's the way ahead at the moment.

107.  Admiral Sir Jonathon Band, former First Sea Lord and Chief of Naval Staff, agreed that it would be "very challenging to run the carrier force that we want on one ship only".[115]

108.  At our final evidence session General Houghton, Vice Chief of the Defence Staff, stated that:[116]

We proceed to abide by the SDSR outcome that one will be in operational use and a second at extended readiness. But we sensibly delayed till 2015 a decision on whether or not to keep it in extended readiness in perpetuity or actually to use the existence of the second carrier in the context of what might be a different financial situation, whether or not we want to make operational use of it. Therefore, we give ourselves the ability to have a carrier available 100% of the time rather than just what would be five years out of seven.

109.  We believe that for an aircraft carrier to be held in a state of extended readiness it must be fitted with catapults and arrestor gear.

110.  We challenged General Houghton that if the UK only had one aircraft carrier, every time it went into refit it would prove to the Treasury that it was not needed. He responded:[117]

That is palpably a serious risk. That is one of the areas where, as it were, in international collaboration, it would make sense—would it not?—between, for example, ourselves and the French, that we made certain, in terms of the availability of our single carriers, that we so rostered them that there was a seamless availability between the two nations.

111.  We explored this proposed interoperability further in terms of the capability of UK and French carriers. General Houghton agreed that it would not be possible to 'fight' from the French carrier, Charles de Gaulle, and that a fully laden JSF would also be unable to land.[118] Despite these caveats General Houghton asserted:[119]

If there is a political agreement that there will be defence co-operation and political decision making about the commitment of a coalition force, everything flows from that. We cannot just say, "I'm not certain that we get on with the French." There will be issues of interoperability, but if the political will is there to make the defence co-operation treaty a reality of political will in real-time scenarios, we would salute, turn to the right and match our capabilities accordingly.

112.  We note that the MoD is still examining the options to bring into service the Queen Elizabeth class carriers. We understand that this includes the timing of fitting the catapults and arrestor gear, including whether one or both carriers should have the system fitted. We have received no evidence that any analysis has been carried out on the cost and scope of work required, or on the financial and technical consequences of switching JSF variant at the time of the SDSR. We expect the MoD to publish its work programme and final requirements for the conversion of the carriers and JSF by the end of 2012.

Harrier Force and the JSF

113.  The SDSR also announced that the Harrier, which provided the carrier-strike capability, would be retired from service by April 2011. A smaller Tornado fleet would provide more diverse fast jet capability in the near term in respect of Afghanistan and any other concurrent operational requirement.[120]

114.  The SDSR also announced that catapult and arrestor gear would be installed on the single operational carrier. This would delay the in-service date from 2016 to 2020 and mean a ten year gap in carrier-strike capability but would allow "greater interoperability with US and French carriers and naval jets" which would "ensure continuous carrier strike capability and reduce the overall carrier protection requirements on the rest of the fleet". The installation of catapult and arrestor gear would also allow the acquisition of the carrier-variant of the JSF instead of the short take-off and vertical landing (STOVL) variant to replace the Harrier Force. The SDSR asserted that this version of the JSF had a longer range and greater payload which was the "critical requirement for precision strike operations in the future".[121] It is envisaged that the single carrier would routinely carry 12 fast jets for operations while retaining the capacity to deploy up to 36 as previously planned.

115.  Wing Commander Andrew Brookes thought that:[122]

The JSF decision was exactly the right one. The carrier variant goes further and carries more; it is far more potent and has much more utility. Once you have decided to go for the 65,000-tonne carrier, you don't even need the jumping bean up-and-down capability that the other carrier had, so I think that is a very good decision.

116.  Admiral Sir Jeremy Blackham agreed:[123]

I have always believed that the provision of a conventionally catapult-launched aircraft added vastly to the capability of any aircraft carrier. The payload is greater, the range is greater, you can recover them more easily and so on and so forth. So I think that decision is extremely sensible in principle, although it does, to my mind, open the question as to which aircraft we should buy, because the Joint Strike Fighter would not be the only possible contender for such a role. But it is certainly the most expensive.

117.  However, Admiral Sir Jonathon Band was critical of the late decision to convert to catapult and arrestor gear:[124]

My view is that that was quite a late call in the SDSR process, from all indications; I don't know, but I think it was a fairly late call. To make the change of variant call and at the same time to get rid of your Harrier force, which would have helped you to get there, is unfortunately a strange set of decisions—let me put it that way—in my view. The Navy has got the will, as I have said to one of your colleagues, to get over that problem, but in my view it is not a clever way of doing it; it is a destructive way.

[...] I was absolutely clear—this is exactly what I said when I was First Sea Lord on whether we could afford to keep the Tornado and the Harrier going—that we needed that sovereign capability and a route to the new carrier capability, so we should keep a small Harrier force going, operating off the CVSs. When Queen Elizabeth arrives, she should be a Harrier carrier. If at some stage someone wanted to do a cats and traps change, it should go into the Prince of Wales, which would be worked up as the first JSF carrier, and then, if you could afford it, you convert Queen Elizabeth. That was a very, very simple plot, which I'd guess—though I don't have my hands on the figures—would be the cheapest decision, too.

118.  We discussed with Vice Admiral Jeremy Blackham whether a small number of Harriers should have been retained to meet the capability gap. He commented:[125]

We have Illustrious, which has just come out of refit this week, I think, and will be able to be in service for quite a long time yet, if we wanted to do that. So it would have been possible to keep a ship that was prepared, ready and able. Temporary detachments to other ships work, but they are not the real thing. It would be very difficult to maintain the skills that way. What I am saying is that we have allowed short-term considerations—because the SDSR is dominated by short-term considerations—to undermine our long-term vision. That seems to me to be anything but strategic.

119.  In response Wing Commander Andrew Brookes stated: "Although I hear everything that everyone is saying, we have probably gone past the point of no return. I think you will find that the crews who flew the Harriers are now going through Typhoon training. Much as I agree with him entirely—it is a bit silly to have an aircraft carrier with no aircraft on it—I think that that is past".[126]

120.  We acknowledge the major contribution of the Harrier Force to the Armed Forces and to the security of the UK. We regret that it has been removed from service. We acknowledge the many pieces of evidence that called for the reintroduction of the Harrier Force. However we agree with our witnesses who stated that it is too late to do so due to the cost, industry losing the relevant personnel and the pilots being redeployed. We call on the Government to ensure that the best deal possible is achieved in the disposal of the Harrier fleet and expect the Government to provide us with full details as soon as any agreement is reached.

Carrier strike capability gap and regeneration

121.  We asked Sir Jonathon Band about the effect of a 10-year capability gap on the ability to conduct expeditionary operations:[127]

If you haven't got carrier air, and you have a worry either that you don't get the overflight or it comes too late for the operations, you have answered your own question. You are seriously limited. We can still do expeditionary operations. The challenge will be how high in intensity they can be without an aircraft carrier of your own, or without relying on the French or Americans to do it for you. If the members of the right partnership all agree the mission, we can probably still do quite a lot, and what we provide will be high quality. When it comes to doing something that only worries Britain, then we are badly placed.

He added "for the period that we do not have any carrier capability, you could not do a rerun of something like Sierra Leone. We can't do anything by ourselves where there is serious risk, because you would not do that without a carrier."[128]

122.  At our session with the single Service Chiefs we discussed plans for regenerating the carrier-strike capability. Air Chief Marshal Sir Stephen Dalton commented:[129]

The key for getting the capability together is to ensure that we have the ability to regrow the proficiency not only to fly aeroplanes, but to operate aeroplane—in other words, all the people who make up the capability. People tend to think that is the pilots, but there are also the engineering personnel on board a carrier and the personnel who direct assets on and off the carrier. We need to make sure, as we are doing, that we are putting together a coherent plan that makes sure that we can develop those people and give them the necessary experience so that we keep them available to us for when we have the capability in place. That is part of the strategy we're working right now to achieve.

123.  Admiral Sir Mark Stanhope added:[130]

That is a very important point. In terms of working it up, it is not just the carrier that is not available; you have no way of maintaining competencies, which is something that requires constant training, in the three-year down period. You may be able to leverage off your allies, which of course we would do, but you can never leverage enough, nor would they be willing to supply that much. Then you would have a long period of getting back into the saddle again.

124.  At our final evidence session, we asked the Vice Chief of the Defence Staff about the plan for regenerating the capability and when it would be available for us to examine:[131]

My personal ambition is to scrutinise the plan at the DOB Carrier Strike—subsequently re-titled DOB Carrier Enabled Capability—on about 13 July, when the senior responsible officer, Rear-Admiral Amjad Hussain, is presenting his Level 0 Plan to me. I am absolutely confident that there will be some holes in that plan; of that, I have absolutely no doubt. But I am also pretty confident that sub-strands of work will be beavering away to plug the holes in that plan. I recognise most of what you said as some of the challenges of bringing about the regeneration of this capability in a 2020 time frame. It is significant. [...]

In terms of complexity, this thing is about the size of putting on the Olympics. Do not underestimate the complexity of this thing; I am sure you do not. The closer we can get—the more time you give, the more robust the plan will be—and, therefore, please wait until the autumn at least, so that we are confidently maturing it.

125.  According to the recent National Audit Office's report on the value for money of the carrier programme,[132] when the main investment decision was made in respect of the two Queen Elizabeth carriers in 2007, the estimated cost was £3.65 billion. In July 2010, prior to the SDSR, this had risen to £5.24 billion and following the SDSR rose to £6.24 billion which included the additional £1 billion cost of converting one carrier to catapult and arrestor gear. The report suggests that SDSR decisions should realise savings of some £3.4 billion over ten years. The report raised concerns that the SDSR is unaffordable unless there is a real terms increase in defence funding from 2015 onwards and that continuing problems faced by the MoD in balancing its budget means that the programme is vulnerable to further change. It also noted that the decisions in the SDSR had introduced additional technical, cost and schedule uncertainty and there were concerns regarding the regeneration of the capability especially as the ways they may be used operationally is still developing.

126.  We support the decision to proceed with both the Queen Elizabeth class carriers and to develop the JSF carrier strike capability. We share the concerns of allies regarding the lifetime costs of the JSF.[133] We expect the MoD to take action to ensure that the costs are controlled and to update us on this work on a regular basis. We note that the MoD is currently developing a plan for the regeneration of this capability and expect to have a sight of it at an early stage. The scale of the challenge the Ministry of Defence faces in generating the complex network of skills involved in flying fast jets from carriers in a manner not undertaken by the UK for many years is so great that this plan needs to be subjected to robust scrutiny both in Parliament and elsewhere. The plan must provide clarity of the steps being taken, specific milestones and dates and what funding is required and whether it is in place. We also note concerns regarding the future use of the second carrier and call on the Government to keep us informed of its plans as they progress.

Nimrod MRA4

127.  The SDSR announced that the Nimrod MRA4 maritime aircraft programme would not be brought into service.[134] This is expected to save over £2 billion over the next ten years.[135]

128.  This rebuilt aircraft would have extended the operating life of the Nimrod fleet by several decades. It would have had more efficient jet engines, thus increasing its flight range, and an improved flight deck to simplify control operations and reduce crew requirements. New detection systems would have been installed, as well as additional weapons for anti-submarine warfare. It had, however, been subject to significant delays and cost overruns.

129.  On his appointment as Chief of the Defence Staff in November 2010, General Sir David Richards, told us the decision to dispense with this programme had been "very difficult". He considered the decision an acceptable risk but not a gamble.[136]

We live within a financial envelope and the key requirement, if you are going to make big savings, is to take out a whole capability. It hasn't been a happy acquisition story. Given that its primary role is to do with the deterrent, of which it is one of five layers that do that sort of thing [...] the view was that it was a risk that was acceptable, and we have all signed up to that. I cannot go into the detail of those layers of activity, but people who know much more about it than me were of a view that, in this respect, it was a risk but it was not a gamble.

In regard to the Nimrod MRA4's wider role, he added:[137]

On its wider role in things like counter-piracy, what we will have to do—and it is one reason why we have enthusiastically entered the Anglo-French arrangement, the new treaty—is to look at how we can, in an alliance, start to compensate for areas that we might not have enough of, or have at all, but that other countries have. That is going to be a reality as we take all this forward, as equipment gets more expensive and all that sort of thing.

130.  The single Service Chiefs gave some examples of the measures being taken to mitigate the risks associated with this loss of capability. Air Chief Marshal Stephen Dalton commented that "in support of operations and submarine activity, the Navy are making greater use of frigates and of their Merlin helicopters to protect the sea lanes and prosecution of identification and attacks on submarines". In respect of long range search and rescue capability he described the use of "E-3D command and control radar aeroplanes [as the] co-ordinator and control of the search and rescue efforts" and "the ability of [...]Hercules to launch life rafts into the sea".[138] Admiral Sir Mark Stanhope added:[139]

The loss of the risk can be mitigated under the current threat levels that we are expecting to envisage and we are into security areas here which I do not want to go into. So we can mitigate in terms of the delivery of the strategic deterrent as well as in terms of the force protection of deployed task groups.

In respect of counter-piracy he agreed with General Sir David Richards that this was an "area in which [...] we will have to rely a lot more on our allies than we have in the past".[140]

131.  We questioned witnesses whether the removal of the Nimrod MRA4 was consistent with the military tasks in the SDSR of providing a nuclear deterrent, gathering strategic intelligence, protecting the UK and providing security for stabilisation (for example anti-piracy operations). Air Chief Marshal Lord Stirrup stated that:[141]

Anti-submarine warfare is one of the most difficult military tasks that the Armed Forces carry out. It is very complex and requires a layered approach. That has been demonstrated clearly over the years, and wide area surveillance is a very important element within that. [...] We have now lost that. In the light of current threats, it is not a critical weakness, but should the threat re-emerge—it could well re-emerge—it would become an important weakness.

132.  Wing Commander Andrew Brookes commented on the decision in respect of the priority risks listed in the NSS:[142]

There are 15 security priority risks. I have gone through and listed the ones that require the maritime reconnaissance, and eight out of 15 require that. Here we have over half the tasks, and they are not being met because the MPA aren't used. I remember the Falklands; we only retook the Falklands, arguably, because we had the Nimrod and we had the Victor with its radar in the front that could sweep everywhere around the Falklands and South Georgia to make sure there were no naval vessels in the area. That capability is gone. We're a maritime nation, and we do not have that capability. That seems the biggest sin of all.

133.  Our inquiry also explored how this capability and the required skills base could be regenerated. Air Chief Marshal Lord Stirrup noted:[143]

It would be very difficult to recover from because it is a very specialised field. It requires a great deal of expertise and quite a lot of experience. I cannot give a specific answer on a plan to recover a wider surveillance capability for anti-submarine warfare, because it is not yet clear how it is to be done. I suspect that inevitably it will involve bringing in help from allies, who have retained their capability and building upon that, and slowly rebuilding the UK's own seed corn.

134.  Air Chief Marshal Lord Stirrup commented on the area of the SDSR which he would revisit if more money became available:[144]

I think probably the whole area of intelligence surveillance, targeting and reconnaissance. It was an area that we wanted to protect in the SDSR. It was set out as a clear policy decision not only to protect it but, if possible, to improve it. That was not possible, given the financial constraints. So we have reduced in those areas, and I suspect that my first area of concern would be to reverse some of those reductions.

He added that this might include some of the maritime patrol capability:[145]

I am not clear at the moment what stage they have reached in the examination of the ability of unmanned vehicles to help in this area. As you know, we have expanded the number of unmanned aero vehicles over recent years in this area in particular. They are so valuable predominantly because of their endurance, and the fact that they can stay up for so long. They have been critical to current operations, and they will be critical to other operations as well. It would not necessarily be a reversal of the Nimrod decision, not that I think that that is feasible since they have been cut up, but it might be putting some of that capability into the unmanned arena.

135.  We questioned whether the complex systems envisaged for the Nimrod MRA4 could have been deployed in a different platform such as an Airbus. Professor Julian Lindley-French commented:[146]

A representative of a certain American company asked me whether its platform could take that equipment, and the answer would appear to be yes. Again, what saddened me was that I approached the Dutch and spoke to the French about offsetting operating costs with potential multinational forces. The initial response was very interested; the French told me that they would even offer the Breguet Atlantics that they had in store if we upgraded their electronics suites. I don't know whether that is possible, but the point is that of the seven military tasks in the SDSR, the MRA4 could have played a very important role in all of them. It was the loss of the enablers, because the single services were forced back to defend their own core competencies by the process, which for me was the biggest failing of the SDSR process. Forget all the strategic stuff: there was a haggle at that last weekend, which was utterly unacceptable in terms of the national strategic requirements.

136.  When we asked General Houghton, VCDS, about the Nimrod decision he commented:[147]

It would be fair to say that among the Chiefs of Staff and in the military advice, it was one of the most difficult decisions to come to terms with, because it has multiple uses. It was made easier by the fact that there were still some residual challenges—there is still a bit of a debate about that—so it was not a capability in hand but one that was promised downstream. There was still a significant amount of money involved in bringing it into service and then running it. It was a difficult decision for the Chiefs of Staff to support because of its multiple uses, but the ultimate judgment was that there was manageable risk in all those areas of use, including deterrence, where you know there are several layers to it—not for discussion in open session.

137.  We deeply regret the decision to dispense with the Nimrod MRA4 and have serious concerns regarding the capability gaps this has created in the ability to undertake the military tasks envisaged in the SDSR. This appears to be a clear example of the need to make large savings overriding the strategic security of the UK and the capability requirements of the Armed Forces. We are not convinced that UK Armed Forces can manage this capability gap within existing resources. We call on the Government to outline its plans to manage the gap left by the loss of this capability, including the possible use of unmanned vehicles and collaboration with allies. In addition, the Government should outline its plans for the regeneration of this capability, including the skills and knowledge required to provide it.

Basing Review and the return of UK Armed Forces from Germany

138.  The SDSR also discussed the future basing requirements for the Armed Forces. The SDSR stated that as a result of the "withdrawal of Nimrod MRA4 and Harrier, as well as the reduction in size of the Tornado fleet" RAF Kinloss and two other bases would no longer be required. The SDSR went on to state: "However, we have not made decisions on the future use of any of these bases. It is likely that some of the estate vacated as a result of the changes announced in this White Paper will be used by units returning from Germany or retained for other purposes".[148]

139.  We asked Sir Stephen Dalton, Chief of the Air Staff, for an update on progress on decisions on RAF bases:[149]

The decision has been made that we will no longer need some of our air bases for the foreseeable future, and three in particular. Of course, the decision on the first one was made some while ago, and it was the decision that RAF Lyneham will close as an air base next year. We will move our air transport assets to RAF Brize Norton. More relevantly in terms of the SDSR, you will have read that the air base at Kinloss will no longer be required for the RAF as of the middle of next year. The decision about what that air base will be used for has still to be made. The process is ongoing, and I think that the decision is coming nearer, but it has certainly not yet been made.

Under the SDSR, we are due to lose one more air base. The decision on that one is moving ahead. It is still in the process of being staffed. I do not know when that will be made clear [...] it is quite a complex process, not least because, as CGS has just pointed out, some of them will potentially be required for Army units to move into. Therefore rebrigading, as we are doing now, is necessary to match the requirement from the RAF point of view and for the other flying elements of the Army and Navy. There is a complex study going on, depending on what we will do with the whole site, so I do not expect many decisions to be made before the middle of this year.

140.  The SDSR also included plans for half of UK Armed Forces (approximately 20,000 Service personnel) in Germany to return by 2015 and the remainder by 2020. In the SDSR, the Government stated "there is no longer any operational requirement for UK forces to be based there, and the current arrangements impose financial costs on the UK, disruption on personnel and their families and opportunity costs in terms of wider Army coherence".[150]

141.  During our inquiry Professor Hew Strachan commented that if the aspiration of real terms increase in defence funding from 2015 was not achieved "the thing that seems to me most undeliverable by 2020, if this uplift doesn't happen, is the commitment to bring the Army back from Germany, because the accommodation simply won't be there to enable it to return."[151]

142.  We discussed progress in this area with General Sir Peter Wall, Chief of the General Staff, who commented:[152]

As far as repatriating the 20,000 or so soldiers and 23,000 dependants, who we have living in Germany thanks to the hospitality of the Federal Government, there is indeed a plan to do that over the next 10 or so years. Some of those numbers will be reduced by the units being disbanded, though none will be combat units that have served in Afghanistan; they will be more part of the support structure, but nevertheless very important. The rest will be moved back to new garrison locations in the United Kingdom, which is subject to an ongoing study, and no decisions have yet been made.

143.  We asked whether the Government had given the German authorities the required two year's notice of its plans. General Wall replied:[153]

We are in active discussions with the Germans, at both the Federal level and the Länder level. That is how I know that we have got the support that we have from them for our plans, whatever the time frame is. In fact, they would prefer things to go more slowly.

144.  We also asked General Wall on whether there would be some co-ordination between the closure of RAF bases and the return of UK Personnel from Germany. He commented:[154]

I think that that is going to depend on the situation in each base, in terms of how much additional work is required to convert a base from one role to another; on whether the people who might be coming back are on operations; and on how much we decide that we are going to split our formations and have moves over a protracted period, which is obviously not very good for cohesion for the next turn of the handle in Afghanistan, and all that sort of stuff. At the moment, that is all being worked upon in the context of a defence-led plan.

145.  In a statement to the House of Commons on 18 July 2011, the Secretary of State for Defence announced further decisions on the future of RAF Kinloss, Leuchars, Lossiemouth and Marham:[155]

RAF Kinloss will be used to house Army units from approximately 2014-15 (subject to further detailed planning);

RAF Leuchars will cease to be an air base but will remain in military use and be used to site two major Army units joining from between 2015-17 with a formation headquarters before 2015;

RAF Lossiemouth would be retained as a long-term RAF base with Typhoon force being built up and providing the location for the Northern Quick Reaction Alert task; and

RAF Marham would remain as a Tornado GR4 main operating base.

146.  The Secretary of State also gave an update on plans for the return of UK Armed Forces from Germany, and issued a Written Ministerial Statement which gave additional information:[156]

The Defence of the United Kingdom, and wider military tasks, including the capacity to support the civil authorities in times of crisis, requires a strong military presence across the entire country. We have also considered the impact of changes on local communities. Finally, we have taken into account the need to make the maximum use of existing defence estate and to dispose of that which is not required.

Much detailed planning remains to be done, both to identify the most effective drawdown plan for the forces currently in Germany and to determine which units are the best match for which sites. We will also need to take into account the potential changes in the balance between the Regular and Reserve forces I have also announced today. And there will be a need for the appropriate level of engagement with local authorities, including the preparation of sustainability assessments and the other work needed to meet our obligations. This means that some uncertainties remain, particularly about the timescales in which the necessary moves will take place. But our strategic objective and the key building blocks of our plan are clear. I will set these out, together with indicative timescales we are currently assuming for planning purposes".

147.  The Secretary of State confirmed that the disposition of the Army would be based on five Multi-role Brigades of which two would be centred on Salisbury Plain, a third at Catterick, a fourth in the East Midlands centred on the former RAF Cottesmore and the fifth in a new garrison at Kirknewton in Scotland. It is intended to use other former RAF bases and existing Army bases including North Luffenham (Rutland), Bassingbourn (Cambridgeshire) and Woodbridge (Suffolk) to begin accommodating units from Germany between 2015-18.

148.  Other sites mentioned by the Secretary of State to accommodate Army units returning from Germany are Aldergrove in Northern Ireland in 2015 and Pirbright (Surrey) in 2013.

149.  The Secretary of State stated: "Routine business on basing and further work on disposals will continue. [...] This will be done in close consultation with the German authorities, which will continue as the Army now draws up its plans for how to draw down from Germany in a sensible and coherent way."[157]

150.  In conclusion the Secretary of State for Defence stated:[158]

The detailed planning work, including the investment required to adapt sites, will now get under way based on this strategic direction. The Ministry of Defence will now begin the process of detailed planning and the appropriate and necessary engagement with the Devolved Administrations and local authorities concerned around the country.

Further work will be done to draw up individual project plans and determine the timing and sequencing of the Army moves, and this may affect some of the indicative timescales set out here. Once completed, this will deliver the military requirement for basing and estate, which will facilitate our work to maximise the effectiveness of our Armed Forces under the adaptable posture set out in the SDSR. It will rebalance the Defence footprint across the UK, offer stability to our Armed Forces, and deliver better value for money for the taxpayer.

151.  We are conscious of the uncertainty that the basing review has created for Service personnel, their families, local communities and businesses. We will monitor the outcomes of the review. We call on the Government to outline its proposals to assist the Service personnel, families and communities affected at an early stage in line with the obligations outlined in the Armed Forces Covenant.

152.  We note the MoD's update on 18 July 2011 of the plans for the withdrawal of UK Forces from Germany. However, given that half of UK Forces are due to return by 2015, we are concerned that the plans are not further advanced. We note that the required two years notice has not been given to the German authorities. We call on the Government to set out with clarity the costs and benefits of this project in terms of providing accommodation, infrastructure and training facilities which are already available to the United Kingdom in Germany. The MoD should provide us with a full implementation plan, its funding and method of attaining the stated goals, at the earliest opportunity and deliver clear communication of these plans for Service personnel, their families, local communities and businesses. The elements of the SDSR are interlinked and failure in one area may mean failure elsewhere.

153.  On 18 July 2011, The Secretary of State also confirmed that:[159]

RAF Lyneham is the preferred location for future defence technical training. This confirms that the Department will withdraw from Arborfield in Berkshire and Bordon in Hampshire, releasing the sites for sale by 2014-15 at the latest. This announcement in no way threatens the existing defence presence at St Athan. There are no plans to move or reduce the 300 technical training posts as part of the rationalisation to Lyneham. Indeed plans to relocate additional defence units to St Athan are being developed, and if those plans come to fruition, they will bring a major uplift in employment at that base. We intend to make an announcement before the end of the year.

154.  We expect to be regularly updated on these plans. We are concerned about the future of defence technical training and request an early statement on how it is to be taken forward and will continue to monitor this vital aspect of defence reform.


155.  In written evidence, it was asserted that some regions of the UK had seen a reduction in their defence footprint and that this had not been addressed by the outcomes of the SDSR.[160]

156.  Responding to this assertion, Peter Rogers, Chief Executive Officer, Babcock, commented:[161]

I would like to see some evidence that proves that is the case, because I don't have any. We have 3,000 people in defence in Scotland; we had 3,000 people there six months ago; and we still expect to have 3,000 or more in a year's time. I don't see any evidence of Scotland being picked on or suffering more than any other region.

Ian Godden, Chairman, ADS, added:[162]

The ADS Scotland Council—we have a council of 50 companies in Scotland—has never raised that subject with me, and we have not debated it at any of our last four meetings. If it is an issue, it is in somebody else's mind not ours at the moment.

157.  During his statement to the House of Commons on 18 July, the Secretary of State was questioned on the regional impact of the outcomes of the basing review. He responded:[163]

The security of the nation and the requirements of defence were paramount in our analysis, but we have also considered the impact of changes on local communities, the impact on service personnel and their families and the current pattern of the armed forces in Britain.

158.  The Secretary of State also noted in the House that Scotland would gain some 2,500 new Army posts, and that of the 20,000 personnel currently serving in Germany, some 6,500 to 7,000 were likely to return to Scotland.[164]

159.  In response to a request for research to be carried out on the defence estates and the industrial footprint of UK defence in Scotland, the Secretary of State undertook to look at the footprint across the United Kingdom. We welcome the Secretary of State's undertaking to carry out an assessment into the defence and industrial footprint of United Kingdom defence across the UK.[165]

Review of Reserve Forces

160.  In October 2010, following the announcement of the outcomes of the SDSR, the Prime Minister commissioned a review of Reserve Forces to be undertaken by an Independent Commission. The Review was to look at the balance between Regular and Reserve Forces, and whether in the context of modern threats and modern skills, optimum use was being made of reservists and the volunteer ethos in society. The Review reported on 18 July 2011 and reached "four broad conclusions":[166]

  • Our Reserves are in decline;
  • We have failed to modernise reservist Roles;
  • We are not exploiting the potential of our Reserves; and
  • We are not using the Reserves efficiently.

The Review then made a number of recommendations to address these issues.

161.  Following publication of the Review, the Government stated that it would proceed with a £1.5 billion investment package over 10 years to enhance the capability of the Reserves. We welcome the Government's commitment to the reform of the Reserve Forces and the investment of £1.5 billion over the next 10 years. However we wish to see more detail on the planning and timing of the shift towards greater reliance on Reserve Forces.

162.  The Committee notes the conclusions and recommendations of the Independent Commission's Report, in particular that the internal governance process should be administered by a Board, chaired by the Vice Chief of the Defence Staff. We particularly note the recommendation that the Council of Reserve Forces and Cadets Associations should report annually to Parliament on progress in implementing the recommendations of the Review.

Future Force 2020

163.  The SDSR stated that the planning framework of Military Tasks and DPAs had enabled the Government to "identify the Armed Forces we will need over the next ten years and the changes that are required to deliver them."[167] These are set out in the SDSR as Future Force 2020. The SDSR states that Future Force 2020 will, in general, comprise three broad elements:[168]

  • The Deployed Force - which consists of forces engaged on operations and those forces which conduct permanent operations essential to national security, including the nuclear deterrent, the maritime presence in the South Atlantic and UK air defence.
  • The High Readiness Force - which allow the UK to react rapidly to crises and constitute a balance of highly capable land, air and maritime capabilities.
  • The Lower Readiness Force - including those personnel recently returned from operations and those preparing to enter a period of high readiness. These forces will support enduring operations and provide additional flexibility.

    Figure 1: Future Force 2020

Data source: HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, p 20


164.  Given the single Service Chiefs' rejection of the UK national ambition to 2015 as being a full spectrum capability (see paragraphs 60-66), we attempted to establish whether Future Force 2020 could be described as full spectrum. Nick Harvey MP, Minister for the Armed Forces believed "it will have a wide spectrum of capability".[169] General Houghton added:[170]

If it is positive, made affordable and delivered, you can have a dance about the meaning of full spectrum. I read what Sir Rupert Smith said, and full spectrum is, in many respects, relative to one's enemy, not to the universe. You have to constrain your boundaries. It meets the National Security Council's adaptive posture in its considerations of the time. So it still has the ability to project power in all three environments at a strategic distance, and the ability to commit to a sustained operation on the land in the messy environment as depicted in our "Future Character of Conflict". In that respect, it would be full spectrum within sensible bounds; it must be bounded in the reality of national ambition.

165.  We asked Air Chief Marshal Lord Stirrup about the robustness of the Future Force 2020 goals and their susceptibility to events. He described them as "reflect[ing] a robust military thinking on what balance of capability, given that we have a balanced approach to this as a strategy baseline, can be afforded within the defence budget that we are envisaging in the 2020 time frame."[171]

166.  Admiral Sir Jonathon Band, former First Sea Lord and Chief of the Naval Staff, commented:[172]

What I would say is that for the level of ambition that I still read into the NSS, and the sort of activities in the past two months of our Prime Minister and statements from our Foreign Secretary, it seems we need a set of defence forces certainly nothing smaller than 2020 force structure. My personal view is that in some areas that is too tight. However, that is the choice of the Government of the day.

167.  In our examination of Future Force 2020 proposed in the SDSR we also discussed with General Sir Nicholas Houghton, Vice Chief of the Defence Staff, what his assessment was of the "critical mass", that is the threshold of operational effectiveness, of UK Armed Forces and how this translated into Future Force 2020. General Houghton set out his assessment at three levels: that of each Service, the combined Armed Forces and the adaptive element of the force in the 2020 outcome.[173] In respect of the three Services he commented:

If you take the Royal Navy, it needs to have a finite number of frigates and destroyers. I think the First Sea Lord would say that the 19 frigates and destroyers that are posited for the 2020 force structure are at about the critical mass of that element of the Navy. You would say the same for the amphibious capability, the carrier strike and the strategic submarine force. Similarly, the Army would probably speak to a critical mass of being able to conduct combined arms manoeuvres at brigade level and being able to sustain that brigade level over time on a long-term operation. The RAF, as well, will have its own sense of what the critical mass of its service is institutionally. It would speak to that better than I can, but I give you a flavour of it. The number of fast jets posited for the 2020 force structure is close to what that institutional sense of the critical mass would be.

168.  In terms of the combined Armed Forces he defined "critical mass" as:

[T]he critical mass of the combined Armed Forces—the combination of all the Armed Forces of the country—in meeting what is expected of them in terms of the military tasks. Here, you can sensibly break out critical mass between those things which, if you like, are nationally non-discretionary, which relate to the committed force—the security of the United Kingdom, the security of the overseas territories, the maintenance of the nuclear deterrent and a whole range of standing commitments—and those things that, on a wholly national basis and on a non-discretionary footing, we would need to do.

169.  General Houghton rejected the suggestion that UK Armed Forces were currently below "critical mass" as "we are drawing down elements of the force to the 2020 structure in terms of numbers of destroyers, the size of the Army and those sorts of things."[174] We put to him concerns that the additional calls being placed on the Armed Forces could distort priorities and impact on the aspirations of Future Force 2020. He acknowledged these concerns, but stated that "ultimately that decision is made politically" with advice from the Armed Forces to Ministers on "the degree to which running two operations hot over a period of time would stress the force structure". When pressed on whether a critical stage was approaching in terms of force structure, he replied "no. I do not think it is. It does involve the requirement to run elements of the services hot for a sustained period of time, but the force structure is sufficiently resilient enough to do that."[175]

170.  We note the observation in the Future Reserves 2020 Report that the costings on the manpower element of the defence budget, amounting to one-third of the total, need further work. We endorse the study's recommendation that detailed costing of Regular and Reserve units be prepared.

171.  We are not convinced, given the current financial climate and the drawdown of capabilities arising from the SDSR, that from 2015 the Armed Forces will maintain the capability to undertake all that is being asked of them. We note that there is mounting concern that the UK Armed Forces may be falling below the minimum utility required to deliver the commitments that they are currently being tasked to carry out let alone the tasks they are likely to face between 2015 to 2020 when it is acknowledged that there will be capability gaps.

172.  We are concerned that, on the one hand, Future Force 2020 seems to be regarded as a "wide spectrum" force able to undertake the security tasks required by the adaptable posture envisaged by the NSS while at the same time being regarded as the "critical mass" of the Armed Forces with some spare capacity that may be achieved by the establishment of alliances and bilateral operations.

173.  We recommend that the MoD should develop further the concept of a "critical mass" for the Armed Forces and establish a clearer measurable statement of what constitutes "critical mass" to allow verification and monitoring by Parliament. This should include not just the roles and structures of Regular and Reserve Forces but should be expanded to encompass enablers such as DSTL, industry, academia, the scientific and research community and the development of the defence knowledge base especially amongst the military and civil servants.


174.  When announcing the outcomes of the SDSR to the House of Commons, the Prime Minister set out his aspiration for real terms increases in the defence budget from 2015.[176]

The White Paper we have published today sets out a clear vision for the future structure of our armed forces. The precise budgets beyond 2015 will be agreed in future spending reviews. My own strong view is that this structure will require year-on-year real-terms growth in the defence budget in the years beyond 2015. Between now and then the Government are committed to the vision of 2020 set out in the review and we will make decisions accordingly. We are also absolutely determined that the Ministry of Defence will become much more commercially hard-headed in future and will adopt a much more aggressive drive for efficiencies.

175.  On 4 November 2010, in a debate on the SDSR, the Secretary of State for Defence restated the requirement for real terms funding increases from 2015: "my very strong belief, which the Prime Minister shares, is that the structure that we have agreed for 2020 will require year-on-year real-terms growth in the defence budget beyond 2015."[177]

176.  We discussed the ambition of real terms increases in defence spending with ministerial witnesses on 9 March. While they all agreed with the aspiration, they argued that it could not be made Government policy as it was not possible for the Government to commit to spending outside the period of the current Comprehensive Spending Review settlement nor commit any future government following a probable General Election in 2015. Rt Hon Oliver Letwin MP, Minister of State at the Cabinet Office commented:[178]

It is not possible for the machinery of government to set expenditure decisions across a longer range than the spending review range—that is the whole structure of our machinery of government. We set expenditures according to spending review patterns. So, SR10—spending review 2010—sets a pattern for four years. It does not stretch to 2020, and I don't know of any Government in the world who could do that.

He added "It is inevitable, isn't it, if there is an election, that whoever emerges as the Government after that election will take a view on expenditure beyond that election?"[179]

177.  Several of our witnesses expressed concern about what would happen if a real terms increase in funding was not possible. Vice Admiral Jeremy Blackham commented that, if real terms increases from 2015 were not forthcoming, "in brief, the risk seems to me, in a word, to be incoherence".[180] Air Chief Marshal Lord Stirrup noted "the reality is that Future Force 2020 would be completely unaffordable and the Armed Forces would have to be substantially smaller than is currently planned."[181]

178.  Witnesses also remarked that there was a lack of clarity on the level of real terms increase required to deliver Future Force 2020. Professor Malcolm Chalmers stated:[182]

The first point that I would make in relation to that commitment, which was made in the SDSR debate by the Prime Minister, is that it is very close to the wording the Government used for the national health service. The Government are committed to real-terms, year-on-year increases for the NHS which, in practice, in the spending review, is translated into real growth of about 0.2% per annum. So I think that we can take from the Prime Minister's commitment a clear statement that there will not be a real-terms reduction after 2014, but I don't think we can read anything from it about how big the real-terms growth that he is committing to is. For the MoD to be able to afford its current plans up to 2020 would, as far as I understand it, require real-terms growth after 2014 of the order of 2% per annum. I think it will be pretty difficult to reach that level of real-terms growth, but it depends on the broader geopolitical climate and on the country's economic prospects.

179.  James Blitz from the Financial Times agreed:[183]

I don't see the Prime Minister's commitment with the statement on the SDSR as a bankable commitment in any way. [...] It is, first of all, completely dependent on the Prime Minister being there in 2015, which may or may not be the case. It is also completely dependent on the economic environment. We may well be in a more benign economic environment, but we may well not be. [...] The question that I think arises, given this uncertainty, is how will Defence be able to press ahead with programming in the next year or two? That is the concern of the chiefs, because what they are saying is, "We have to know where we're going to be in 2016-17". My own view is that they are just going to have to muddle through, because I cannot imagine a situation in which the Treasury will turn around and say to Defence, "We will guarantee you a number and not do that for any other Government Department".

180.  Air Chief Marshal Sir Stephen Dalton, Chief of the Air Staff, was asked what would happen if the Prime Minister's wish for an increase in the Defence budget from 2015 were not to be achieved. He responded:[184]

The most important thing is the question of whether that is decided now and something is put against that statement. In other words, are we going to see a figure put against that and an allowance made so that we can plan against that figure? If not and the question will be decided only once we have had the next election, the implications are that we will have to plan on the assumption that there won't be any increase because the Treasury, naturally enough, will not allow us to plan on something that does not exist in policy terms. So that will have an effect on what programmes we need to have in the future, in terms of both people and equipment, because that planning is critical if we are to get through the initial stages of understanding capabilities for the future without actually buying equipment. You have to have some sort of research and development in relation to what is going on and some evaluation of the options that are there. If that is not given some meat in the foreseeable future, the most important consequence is that we will have to plan on the assumption that there won't be an increase, even if there subsequently is to be one.

181.  Air Chief Marshal Lord Stirrup commented that:[185]

"all this depends on meaningful real-terms growth in the second half of the decade, and I cannot give you a figure for that. Well, I could give you a figure, but I do not mean 0.2% a year in real terms; I mean something substantially more than that. [...] It would be enormously welcome if there were a degree of cross-party support for that particular proposition. I do not think that there necessarily is such support at the moment, not least because the Ministry of Defence has to plan now for certain aspects of the force structure beyond 2015. It can only plan on what it knows, so at the moment it is planning on the basis of a flat real budget from 2015 onwards. At the moment, the Ministry of Defence is planning not to achieve Future Force 2020.

Three month review of the SDSR

182.  In a speech at Chatham House on 19 May 2011, the Secretary of State for Defence announced that he had initiated a three month review of the SDSR:[186]

Having completed the current planning round, we have started the next Planning Round to take forward the work needed to balance defence priorities and the budget over the long-term. The Department has recently initiated a three month exercise as part of that work to ensure we match our assumptions with our spending settlement. This allows us to draw all this work together to inform the next planning round and to avoid the mistakes of the previous government in building up to an unsustainable Defence programme We have made it clear that while the SDSR had made substantial inroads into the £38bn funding deficit, there is still more to be done. Given the mess we inherited putting Defence on a sure footing, with a predictable budget, was always going to take time, but we believe it is better to be thorough than quick.

183.  During our final evidence session it became clear that part of the three month review was to establish the level of funding required to reach Future Force 2020. The Vice Chief of the Defence Staff stated:[187]

You have referred back to the point of the three-month exercise. In the absence of any other financial direction from the Treasury, we could only plan on an increase—of flat real—from 2015 onwards. Patently, SDSR force structure 2020 is not affordable on a flat real profile. [...]

In the process of the three-month exercise, we are trying to absolutely understand what that delta is to inform the debate. Hopefully, we can then get the planning authority from the Treasury to plan with confidence against those out-years.

184.  We asked Bernard Gray, Chief of Defence Materiel, whether he had calculated the real terms increases required to achieve Future Force 2020:[188]

No, because we are working through all the exercises, not only on the underlying funding assumptions, but on the equipment structure possibilities and the real cost of equipment. I have been conducting an exercise to re-test the costing proposals for each of the individual programmes from the bottom up, for example. I have been looking at what we might do through efficiency savings, what the Reserves review might generate and so on. A bunch of moving parts within this are being brought together as part of the three-month exercise to determine what it would be. As the Secretary of State and the Prime Minister have said, it will require significant real-terms increases.

185.  On 18 July 2011, despite the earlier assertion to us by Ministers that it was not possible for the Government to commit to spending outside the current CSR period, the Secretary of State for Defence in announcing the outcome of the three months review to the House of Commons stated:[189]

Commitments must match resources in order to achieve a balanced budget. As part of preparation for this year's planning round, we have identified a number of adjustments to the Defence programme. This includes rationalising vehicle acquisition to make best use of those we have procured to support operations in Afghanistan and continuing to bear down on non-front line costs, where we will aim to deliver further substantial efficiencies in support, estate spending and IT provision. Against this background, and as part of the overall approach to balancing the programme, I have agreed with the Treasury that the MoD can plan on the Defence equipment and the equipment support budget increasing by 1 per cent a year in real terms from 2015-16 and 2020-21. [...] Such a long-term planning horizon will give greater stability and predictability, and stop the old practice of simply pushing programmes into future years. These and other changes will enable us to proceed with a range of high priority programmes set out in the SDSR. I can now give the go ahead for the procurement of 14 additional Chinook Helicopters, the upgrade of the Army Warrior's vehicles, spending on the Joint Strike Fighter, the procurement of the Rivet Joint Intelligence and surveillance aircraft, the cats and traps for the Queen Elizabeth aircraft carriers and the development of the Global Combat Ship. The equipment can now be bought with confidence ending a decade of uncertainty for our Armed Forces, and for industry.

186.  We note the outcome of the Government's three month review of the SDSR. We acknowledge the planned 1% real terms increase in the defence equipment and equipment support budget between 2015-16 and 2020-21. However we note that this is based on a number of adjustments to the Defence programme, including rationalising vehicle acquisition and continuing efficiency savings from non-front-line costs. Although we welcome the additional certainty that this will bring in respect of the defence equipment and equipment support budget, we are concerned that this increase is simply a reallocation of resources and does not represent the real terms increase in funding required to deliver Future Force 2020. In its response to this Report, the Government should also set out in much greater detail the baseline for the calculation of the 1% real terms increase in the defence equipment and defence support budget and the savings that will be made to realise it.

187.  We are concerned at the lack of information in the SDSR on the levels of funding required to deliver Future Force 2020 and the increase in defence spending that this would represent. The Government should provide an estimate of these in its response to this Report and the figures should be updated in the annual updates on implementation of the SDSR. We regard defence planning and procurement as being of a unique nature, particularly given the long timescales associated with it, and recommend that the Government should initiate ways of allowing the MoD to proceed with implementing Future Force 2020 with budgetary certainty outside the normal CSR timetable.

188.  We share witnesses' concerns that there are serious risks if Future Force 2020 is not achieved. A failure to achieve Future Force 2020 would represent a fall below "critical mass" and a reduction in the influence that the NSS and SDSR set out as desirable. We fully support the Prime Minister and the Secretary of State for Defence in their personal aspirations for real terms increases in defence funding from 2015 that will enable the commitments made in the SDSR for Future Force 2020 to be realised. However this is meaningless without a concrete commitment that these increases will be delivered. Decisions for post 2015 funding will have to be made in the very near future to ensure progress towards Future Force 2020. If the ambition of a real term funding increase is not realised, we will have failed our Armed Forces.

189.  We questioned Ministers about how the public would perceive a real terms increase in defence spending in 2015 at the same time as UK Armed Forces ended their combat role in Afghanistan. The Secretary of State for Defence responded:[190]

We have set out what we believe to be the correct posture and force balance for the United Kingdom going ahead. In the SDSR, we had three options: first, to salami-slice everything and try to keep our heads above water year by year; secondly, to freeze capabilities where they were and not to sign future contracts or invest in future capabilities; and thirdly, to say, "We're in a hole. Let's find a strategic aiming point," which was 2020, "Let's set out what we think is the appropriate force balance for the UK in that year and then work our way towards it." That was always going to be a difficult course to take, but I still believe it was the right one.

190.  We note that a real terms increase in defence funding from 2015 will coincide with the withdrawal from a combat role in Afghanistan and anticipate that the UK public, whilst being passionate in their support for the Armed Forces, will question this decision. The Government must ensure that the reasons for the increase are effectively communicated to the public. This should begin now.

89   Defence Committee, First Report of Session 2010-11, The Strategic Defence and Security Review, HC 345, Ev 13 Back

90   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948 Back

91   HC Deb, 19 October 2010, cols 797-801 Back

92   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, para 1.3 Back

93   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, paras 2.2-2.3 Back

94   Defence Committee, Appointment of the Chief of the Defence Staff, Oral and written evidence, HC 600-i, Session 2010-11, Q 2 Back

95   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, pp 10-12 Back

96   Ibid., para 1.6 Back

97   Ibid., para 1.7 Back

98   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, pp 10-12, paras 2.10-2.11 Back

99   Ev 125-126 Back

100   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, para 2.13 Back

101   Ibid., p 18 Back

102   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, para 2.5 Back

103   Q 189 [Admiral Sir Mark Stanhope] Back

104   Q 201 [Admiral Sir Mark Stanhope] Back

105   Qq 201-214 Back

106   Q 281 Back

107   Q 504 Back

108   "A Conservative Strategic Defence and Security Review", Defence, 30 April 2010. See also Conservative Party, A new Covenant for our Armed Forces and their Families: The Conservative Armed Forces Manifesto, 2010, p 15. Back

109   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, pp 19-34 Back

110   Ev w1, Ev w5, Ev w7, Ev w12, Ev w60, Ev w77, Ev w115, and Ev w120 ff Back

111   Q 8 Back

112   The announcement regarding HMS Illustrious and HMS Ocean was made on 15 December 2010 after a short study to determine which platform would provide the most effective helicopter platform capability (HC Deb 15 December 2010, 103WS). Back

113   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, pp 22-23 Back

114   Q 215 [Admiral Sir Mark Stanhope] Back

115   Q 423 Back

116   Q 578 Back

117   Q 579 Back

118   Qq 580-582 Back

119   Q 584 Back

120   The SDSR committed to a fast jet capability of Typhoon and JSF with Harrier being withdrawn immediately and a smaller Tornado fleet being retained as an interim measure. See also HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, pp 25-26. Back

121   The SDSR committed to a fast jet capability of Typhoon and JSF with Harrier being withdrawn immediately and a smaller Tornado fleet being retained as an interim measure. See also HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, p 23 Back

122   Q 494 Back

123   Q 497 Back

124   Q 441 and Q 446 Back

125   Q 499 [Vice Admiral Sir Jeremy Blackham] Back

126   Q 499 [Wing Commander Andrew Brookes] Back

127   Q 419 Back

128   Q 420 Back

129   Q 215 [Air Chief Marshal Sir Stephen Dalton]  Back

130   Q 215 [Admiral Sir Mark Stanhope] Back

131   Q 604 and Q 607 Back

132   National Audit Office, Carrier Strike, July 2011, HC 1092 Back

133   Q 609 Back

134   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, p 27 Back

135   SDSR Briefing Pack: RAF, October 2010 Back

136   Defence Committee, Appointment of the Chief of Defence Staff, Oral and written evidence, HC 600-i, Session 2010-11, Q 38 Back

137   Defence Committee, Appointment of the Chief of Defence Staff, Oral and written evidence, HC 600-i, Session 2010-11, Q 38 Back

138   Q 241 [Air Chief Marshal Sir Stephen Dalton] Back

139   Q 241 [Admiral Sir Mark Stanhope] Back

140   Q 241 [Admiral Sir Mark Stanhope] Back

141   Qq 276-277 Back

142   Q 510 [Wing Commander Andrew Brookes] Back

143   Q 290 Back

144   Q 293 Back

145   Q 294 Back

146   Q 510 [Professor Julian Lindley-French] Back

147   Q 597 Back

148   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, para 2.D.13 Back

149   Q 232 Back

150   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, p 28 Back

151   Q 45 Back

152   Q 230 Back

153   Q 237 Back

154   Q 236 Back

155   HC Deb, 18 July 2011, cols 643-645 and Ev 158 ff Back

156   HC Deb, 18 July 2011, cols 67WS Back

157   HC Deb, 18 July 2011, cols 69WS Back

158   HC Deb, 18 July 2011, cols 70WS Back

159   HC Deb, 18 Jul 2011, col 69WS Back

160   Ev w71 Back

161   Q 388 [Peter Rogers] Back

162   Q 388 [Ian Godden] Back

163   HC Deb, 18 July 2011, cols 644  Back

164   HC Deb, 18 July 2011, cols 645, 649 and 655  Back

165   HC Deb, 18 July 2011, cols 647 Back

166   The Independent Commission to Review the United Kingdom's Reserve Forces, Future Reserves 2020 , July 2011, p 4  Back

167   HM Government, Securing Britain in an Age of Uncertainty: The Strategic Defence and Security Review, Cm 7948, para 2.A.1 Back

168   Ibid., para 2.A.2 Back

169   Q 551 [Nick Harvey MP] Back

170   Q 551 [General Sir Nicholas Houghton] Back

171   Q 281 Back

172   Q 423 Back

173   Q 528 Back

174   Q 529 Back

175   Qq 532-533 Back

176   HC Deb, 19 October 2010, col 799 Back

177   HC Deb, 4 November 2010, col 1069 Back

178   Q 152 Back

179   Q 155 Back

180   Q 482 Back

181   Q 284 Back

182   Q 43 [Professor Malcolm Chalmers] Back

183   Q 43 [James Blitz] Back

184   Q 252 [Air Chief Marshal Sir Stephen Dalton] Back

185   Q 287 Back

186   "Strong economy, Strong Defence, Strategic Reach: Protecting National Security in the 21st Century", Speech by Rt Hon Liam Fox MP, Secretary of State for Defence, on 19 May at Chatham House. Available at: Back

187   Qq 543-544  Back

188   Q 553 Back

189   HC Deb, 18 July 2011, cols 643-644 and Ev 158 ff Back

190   Q 163 Back

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Prepared 3 August 2011