Revisiting the UK’s national security strategy: The National Security Capability Review and the Modernising Defence Programme Contents

Conclusions and recommendations

A less favourable strategic outlook for the UK

1.The cornerstones of UK national security are being undermined in four ways:

Fixing UK defence

2.The long-term plan for defence set by the Government in 2015 was never affordable. It relied instead on the “alchemy” of unidentified efficiencies and on a misplaced optimism about the financial risks involved. Some of those risks are now materialising, at a cost to the Government of £1.8 billion so far. This is unlikely to be the final price of what we were advised was the “collective self-delusion” that prevailed in 2015. (Paragraph 24)

3.Today’s hi-tech and hybrid threats in areas such as cyberspace and information warfare do not obviate the need for soldiers, sailors, airmen and conventional equipment. These remain essential for deterring more traditional threats. The UK’s armed forces must have the capacity and balance of capability to respond to both types of threat, and to protect conventional equipment from newer threats such as cyber-attack. (Paragraph 35)

4.The Modernising Defence Programme was undertaken in the context of significant challenges to UK defence. Having set high expectations at its launch, the MDP provided only a short-term fix for the capability and funding gaps that had emerged since 2015, and ultimately raised more questions than it answered. This has left the Ministry of Defence in a ‘holding pattern’ until the next Spending Review. (Paragraph 36)

5.While we welcome the recognition in the MDP report that UK defence must be able to harness new technology and innovation more effectively, the initiatives it sets out are only the first steps towards a wider change in culture that is urgently needed. This includes the ability to identify disruptive technological change and its implications for the application of military force, as well as the willingness to adapt defence programmes accordingly and often at speed. (Paragraph 37)

6.As we said in our March 2018 report, strong arguments have been advanced that it is not enough to spend 2% of GDP on defence, in light of both the scale and range of threats to the UK and the costs involved in keeping pace with rapid technological change. Yet a recent Defence Committee report found that Ministry of Defence expenditure fell from 2.4% of GDP in 2010/11 to 1.8% in 2017/18, while overall (cross-government) defence spending under the NATO definition fell from 2.5% of GDP in 2010/11 to 2.1% in 2017/18. (Paragraph 42)

7.But spending more on defence is only part of the answer. The NSCR and MDP processes have shown that the funding model for UK defence is broken: the Treasury persists in not funding the Government’s ambitions for defence properly, while the Ministry of Defence has repeatedly struggled to manage its budget efficiently and effectively. The current programme budget is heavily over-committed and dominated by so-called ‘legacy’ capabilities, leaving little opportunity for an effective response by the MoD to changing threats and technology. (Paragraph 43)

8.We recommend that, as well as increasing the overall defence budget, the Treasury help the MoD move away from its ‘use it or lose it’ mentality towards a more agile approach to planning and procurement. This would enable the MoD to take better advantage of rapid technological change. At the least, some of the MoD’s budget should be ring-fenced for the identification and adoption of cutting-edge technologies with potential military application. It should also be possible to roll over this ‘transformation’ funding from one financial year to the next in the event of underspend. The National Security Council should oversee a joint process between the MoD and the Treasury to determine the size of this ring-fenced budget. £500 million should be the minimum for such a Transformation Fund. (Paragraph 44)

Time for a re-set on UK national security?

9.It is time for the Government to go back to first principles on the national security strategy. The UK will have to chart a more nuanced course in the coming years as the direction and influence of key countries such as the US and China change unpredictably, and following its departure from the European Union. It will also have to respond to fast-changing and increasingly complex security threats, as described in our March 2018 report on the NSCR. (Paragraph 51)

10.Yet the Government has become accustomed to talking a better game than it plays on national security, despite efforts to improve how it makes and delivers strategy since the National Security Council was established. The ‘Global Britain’ concept is meaningless against the current background of reduced diplomatic spending and under-powered defence. If the Government wants to turn ‘Global Britain’ into a meaningful strategy, it must re-build the UK’s hard power while reinvesting in and unifying the various instruments of soft power, including aid and diplomacy. This will require a combination of increased funding and rebalancing funding between defence, diplomacy and aid. National security strategy-making is about making choices, and the Government must now steel itself to make the difficult choices that it has sidestepped for too long. (Paragraph 52)

11.We recommend that the Government, under the new Prime Minister, immediately set about addressing policy and budgetary decisions that have been left hanging by the National Security Capability Review and especially by the Modernising Defence Programme—with its implicit requirement for greater defence expenditure. The next Spending Review would provide the best opportunity to do so. The Government should describe in its response to this report what action it is taking to ensure that the Spending Review is based on thorough consideration of the issues raised. (Paragraph 53)

12.At the same time, the Government should begin an honest conversation at the national level about the extent of its ambition for the UK as a significant global player, the risks it is willing to take in relation to national security, and the resources it is willing to commit to these ends. In 2009–10, the then Government produced a Green Paper that facilitated such a discussion. A similar Cabinet Office-led exercise in advance of the next National Security Strategy and Strategic Defence and Security Review would leave the UK better prepared than it was in 2015 to deliver on its national interests in the face of unpredictable strategic change and evolving threats. This next full review should take place alongside a Spending Review. (Paragraph 54)

Stronger direction from the centre of Government: Fusion Doctrine

13.The Fusion Doctrine was one of the stand-out announcements of the National Security Capability Review. We welcome this attempt to strengthen the National Security Council’s authority across Government—both in pursuing its strategic priorities and in responding flexibly to national security threats. However, it is unclear how, under the Fusion Doctrine, the Government is engaging with the private sector and the UK’s allies and partners, all of whom are central to our national security. (Paragraph 61)

14.We also remain concerned that efforts to integrate the assessment and use of defence and security capabilities across Government will continue to be hindered by the fundamental challenges facing UK defence. It is no solution to ‘fuse’ reviews of security with reviews of defence, as the NSCR attempted to do, if every extra pound spent on the one comes at the expense of the other. (Paragraph 62)

15.We recommend that the Government publish the list of National Security Strategy and Implementation Groups, the ‘home’ department of the Senior Responsible Official for each NSC policy priority, and the frequency with which each NSSIG meets. In its response to this report, the Government should also set out:

16.The value of the Conflict, Stability and Security Fund comes from the way in which it brings together multiple departments and agencies—as well as both Official Development Assistance and non-ODA funding—to deliver programmes which provide significant national security benefits but might ordinarily be beyond the remit and/or risk appetite of individual departments. The Committee recognises the value of this approach. However, it is precisely this combination of complexity and greater risk that necessitates strong direction from the centre of Government, and especially proactive ministerial oversight. We will therefore monitor the work of the new National Security Council sub-committee closely as part of our ongoing scrutiny of the CSSF. (Paragraph 66)

17.We recommend that the Government share the agenda for the NSC sub-committee on cross-government funds with us, in confidence and on a regular basis, as it does for the NSC and its other sub-committees. (Paragraph 67)

A more agile approach to national security between SDSRs: ‘posture reviews’

18.The national security landscape is changing more quickly than the current cycle of five-yearly reviews of UK national security can accommodate, suggesting that a form of interim review is needed. The way in which the National Security Capability Review and then the Modernising Defence Programme unfolded in 2017 and 2018 demonstrated the importance of a more deliberate, considered process. Such reviews of national security should be led, as far as possible, by policy need rather than politics. (Paragraph 70)

19.We therefore welcome the Government’s intention to hold regular, limited ‘posture reviews’ in between the publication of the National Security Strategy every five years, although we caution against holding them too frequently. This formalised approach would allow the Government incrementally to adjust the UK’s course and capabilities. It would have the advantage of providing:

This dynamic review of national security should be a key function of the National Security Council. (Paragraph 71)

20.We recommend that when the Government publishes its first posture review, it should set out: how it was conducted; by whom (including which Ministers were involved and at what stage); whether it was “fiscally neutral”; and how it relates to the National Security Risk Assessment (which is also conducted on a regular basis between the five-yearly reviews of national security). In addition, the Government should weigh up the benefits of conducting this first posture review against the costs to departments, with a view to making a more informed decision about when to hold the next one. (Paragraph 72)

21.The Government should use these posture reviews to establish a regular dialogue with our Committee on national security threats and wider challenges, on the understanding that some of this discussion will need to take place in private. A good first step would be for the Government to share the 2018 National Security Risk Assessment with us, in confidence, so that we can better understand its current assessment and prioritisation of risk. (Paragraph 73)

The future of five-yearly national security reviews

22.If security and defence reviews are held with no Spending Review in sight, the likely result will be a rupture in the Fusion Doctrine, such as that which happened when the Modernising Defence Programme was divorced from the National Security Capability Review. (Paragraph 76)

23.The new Government should set out in its response to this report when it intends to hold the next full review of UK national security, and how in the longer term it intends to reconcile the divergent timelines of the NSS & SDSR, the Spending Review and the start of a new Parliament. (Paragraph 77)

Published: 21 July 2019