Beyond 2 per cent: A preliminary report on the Modernising Defence Programme Contents


The Modernising Defence Programme (MDP) is a defence policy review which was removed from the wider and cost-neutral National Security Capability Review (NSCR) and placed under the control of the Ministry of Defence. This provides an opportunity for the Government to realign the size and structure of the Armed Forces with the scale and range of intensifying threats that face the United Kingdom. It also gives the Government the chance to confront the necessity of providing the level of finance required to strengthen the Armed Forces on a sustainable basis. In doing so, the Government must break out of the pattern, observable in past reviews, of strategic direction being lost because the conclusions of the review are inadequately funded and ultimately unsustainable—leading to the entire process being re-opened and revised. This cannot be achieved if a review is underfunded or reliant on seeking spurious ‘savings’ and elusive ‘efficiencies’ to make ends meet. A firm and sustainable settlement is required to achieve strategic and financial stability.

In this preliminary report ahead of the MDP reaching its conclusions, we make a number of observations on capability and force structure, recruitment and retention, international partnerships, business and commercial practices and defence expenditure that we would expect to be explored in the course of the MDP. This is a ‘broad brush’ exercise based both on the evidence we have received and on the conclusions of reports produced by us and our predecessor Committee since November 2015.

The Defence Secretary should be congratulated on initiating the Modernising Defence Programme and removing Defence from the procedurally unsound National Security Capability Review. By operating within the straitjacket of ‘fiscal neutrality’ and counting the cost of Defence as only one strand in a combined ‘Security’ budget, the NSCR had created the dangerous and perverse situation of potential cuts in defence capability whilst the country was facing intensifying threats. We strongly support his efforts to achieve an increase in the Defence budget; but reforms are also necessary within the MoD to demonstrate that the Department can be the responsible owner of a new settlement. We have made recommendations that the Government should give time for the MDP’s ‘high level findings’ to be debated in Parliament before the summer recess. We have also recommended that the Department sets out a clear account of military requirements and their cost, so that the public is more aware of the scale of investment required to discharge the first duty of Government.

In our view this settlement should be based on a level of defence expenditure approaching the figure of 3% of GDP which the United Kingdom still maintained as late as the mid-1990s. Whenever we ask about the place of Defence in our national priorities, we are met with the mantra that “Defence is the first duty of Government”. The Modernising Defence Programme provides this Government with a perfect opportunity to show that it means what it says.

Published: 18 June 2018