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… and the ONLY Royal Navy ship able to fully replenish the UK’s aircraft carriers will be unavailable for a year because of a refit!

By stewartb

It’s always relevant to amplify new information about the actual state of this UK nation-state, the one within which we in Scotland are supposedly ‘better together’. Is the UK all that it’s cracked up to be in Unionist messaging?

Notwithstanding the fact that in the Union the people who live in Scotland have to rely on the UK Ministry of Defence (MoD) and the UK’s armed forces, the effectiveness of these important organisations receive little or no coverage from the mainstream media that (supposedly) serves Scotland.

Notwithstanding the fact that taxes paid into the UK exchequer from Scotland contribute to the defence budget – and a pound sterling paid in tax in Scotland has the same value as a pound sterling paid in tax in England – the same media never seem interested in informing voters in Scotland on how Westminster, by way of the MoD and The Treasury, delivers on its responsibilities in defence matters.

The latest assessment of what should be of concern to taxpayers/voters in Scotland comes in a report by the cross-party House of Commons Committee of Public Accounts (PAC) entitled ‘MoD Equipment Plan 2023–2033’. (See: https://committees.parliament.uk/publications/43732/documents/216970/default/)

This is what we learn about the governance of the Union’s defences (with my emphasis):

• there is a £16.9 billion deficit between the MoD’s stated capability requirements and its budget, despite the MoD having increased the 2023-2033 Plan’s budget by £46.3 billion
  • the PAC reports that this is ‘the largest funding deficit in any of the 12 Plans the MoD has published since 2012’
• the PAC argues that the real deficit is even larger, ‘because some parts of the Armed Forces have not included costs for all the capabilities government expects the MoD to provide, but only those they can afford’
  • the Army could need around £12 billion more to fund all the capabilities the government seeks.’

So the Westminster government may talk up its aspirations for enhanced defence capability to impress but there is a huge shortfall in funding to deliver.

The PAC report is scathing about the MoD’s financial management and its credibility: ’The MoD has not had the discipline to balance its budget by making the difficult choices about which equipment programmes it can and cannot afford. Instead, it has opted to assume—or perhaps, given the uncertainty, hope—that fiscal and economic circumstances will improve during the next ten years so that government will fulfil its aspiration to annually spend 2.5% of GDP on defence. This, combined with the marked deterioration in the Plan’s affordability, means that the MoD has not credibly demonstrated to Parliament how it will manage its funding to deliver the military capabilities that government wants.’

And this is not new: ‘In this Committee’s report on last year’s Plan, we commented that we saw the same problems recurring year-on-year, with many defence procurement programmes being delayed and over-budget. We are disappointed, if not surprised, that these failings are evident yet again. The need for the MoD to assert firm control on defence procurement remains as acute as ever.’

On the MoD’s equipment Plan, the PAC report provides this: ‘… the Minister of State for Defence said in the House of Lords on 7 December 2023: “I have looked at budgets for the last 40 years and I have never seen a budget that resembles anything like this one, and that is not just the absolute figures. The way in which it is constructed means that it is very difficult to get to exactly the way in which the money moves around”. We are similarly puzzled about how the Plan can be allowed to contain such inconsistent approaches.’

This is tax revenues from Scotland the Minister is referring to!  If the all foregoing was about ‘ferries’ in Scotland – even though the sums involved in ferry procurement are probably two orders of magnitude smaller – such findings would be a headline writer’s (recurring) dream. BBC Scotland, much of the mainstream commercial media and opposition politicians would be on a feeding frenzy for weeks if not months!

One wonders how many voters in Scotland will have any awareness of how Westminster and the MoD are utilising their taxes?

Budget details

As defence is a reserved matter, each of the figures quoted in what follows includes a c. 10% contribution from Scotland’s taxpayers or will be c.10% liability on Scotland’s public finances:

• the MoD has allocated a budget of £288.6 billion to the current equipment Plan’s 10-year timeframe
  • this is £46.3 billion more than the MoD allocated in the 2022–2032 equipment Plan: it is 49% of the entire 10-year forecast defence budget
• forecast costs have increased by £65.7 billion to £305.5 billion, resulting in a £16.9 billion deficit between the MoD’s capability requirements and the budget available to provide them
  • this is the largest affordability gap in any of the 12 Plans published annually by the MoD to date.

We learn about the causes of the budget deficit: ‘Part of the reason for this deterioration is inflation, which the MoD estimates added £10.9 billion to its costs, and adverse foreign exchange movements which added £2.2 billon.’ But – and for many in Scotland this will be particularly objectionable – ‘The greatest cause of cost increases, however, is the MoD’s decision to fully fund the nuclear enterprise, with costs at the Defence Nuclear Organisation having increased by £38.2 billion (a rise of 62% compared to the previous Plan).’

The PAC makes a fairly basic recommendation: ‘The MoD should demonstrate in its future Plans that it has a disciplined approach to budgeting which keeps costs in line with the funding available, challenges project teams on costs and takes account of risks such as inflation.’ Image if Audit Scotland had stated that the Scottish Government needed to ‘demonstrate a disciplined approach to budgeting’? But then with a largely fixed budget it has little choice.

The PAC uncovers some rather remarkable inconsistencies in the MoD’s budgetary practices: ‘The Plan is inconsistent because some parts of the Armed Forces include the costs of all capabilities that the government expects them to deliver, while others only include those they can afford. …. the Royal Navy has included in the Plan predicted costs for all the capabilities the MoD expects it to deliver, and it has reported a deficit of £15.3 billion. In contrast, the Army has reported a deficit of £1.2 billion in the Plan, because it only includes those projects it can afford. However, its deficit would increase by around £12 billion if it had included all the capabilities the government has requested.’

There is this mention of shipbuilding: ’… the failure to provide budgets that match ambition, such as the £5.9 billion funding shortfall in the shipbuilding pipeline, risks undermining suppliers’ confidence to invest in their capacity.’

Impact of prioritising weapons of mass destruction

The PAC report notes that the MoD’s prioritisation of the ‘Defence Nuclear Enterprise’ risks the further squeeze on budgets for conventional capabilities. It states: ‘Maintaining the nuclear deterrent remains the MoD’s highest defence priority. This year’s Plan is the first time that the MoD has set out its nuclear budget separately from other defence spending, and it has sought to limit the long-term costs of its nuclear programmes by prioritising their quicker delivery over immediate cost constraints.’

Repeating an earlier stated fact: ’The greatest cause of cost increases, however, is the MoD’s decision to fully fund the nuclear enterprise. This has increased 10-year costs at the Defence Nuclear Organisation by £38.2 billion (62%) compared with last year’s Plan, to £99.5 billion. Costs at the Royal Navy, 20% of whose budget is for nuclear, have increased by £16.4 billion (41%).’

And it reports scope for even higher spend on nuclear weapons: ‘The MoD has agreed a minimum budget with HM Treasury for its nuclear activities, and it said that it might ask HM Treasury for more money for nuclear programmes in future planning rounds. If additional money is not forthcoming, the MoD has the flexibility to redirect money from its budgets for conventional equipment to nuclear programmes. However, the current budget for conventional equipment is £9 billion less than forecast costs, and HM Treasury recognises that it will be difficult for the MoD to fund fully its nuclear requirements through the reprioritisation of conventional capabilities.’

Reliance on others

Given that Unionist messaging about Scotland’s defence after independence has always tended to emphasise the dangers of isolation and the loss of the support of UK ‘broad shoulders’, it is ironic that the PAC report highlights the increasing reliance of the UK on allies.

It reports: ‘The MoD is becoming increasingly reliant on the UK’s allies to protect the UK’s national interests, which carries the risk that such support might not always be available.‘

It adds: ‘…. for deterrence to be effective the UK’s Armed Forces must be credible. Such credibility is undermined by widely reported recruitment and retention issues, with more people leaving the Armed Forces than are being recruited, the mothballing of Royal Navy ships because of crew shortages, and the unavailability this year of the only Royal Navy ship able to fully replenish the UK’s aircraft carriers because of a refit.’

That latter revelation should be widely and loudly regarded as a scandal! The BBC News website today (8 March) has an article headlined ‘UK military capability at risk, MPs warn’. It seems odd does it not that this stark admission about carrier support was not mentioned in the article?

On a similar vein, the PAC report adds: ’… there is uncertainty about whether two Type 23 frigates that have recently gone into refit will return to active service. If they do not, this would further curtail the Royal Navy’s already limited capacity to provide escorts. The Type 23 class is coming to the end of its in-service life, and the cost of refitting them has increased from £23 million to £100 million because their age means that the necessary work is now much more extensive and takes almost twice as long to complete.’ 

But hey, get some perspective: it’s only the ‘defence of the realm’ and it’s only The Treasury’s money. Much more importantly, have you been following the media coverage of what’s been happening with ferry procurement in Scotland?

Talking-up Scotland costs nothing so donate to our friends at  https://www.broadcastingscotland.scot/donate/ or take out a subscription to the Scots Independent newspaper in which I have a column, at: https://scotsindependent.scot/FWShop/product-category/subscriptions/