It has come to light that there is a funding black hole in the Ministry of Defence (MOD) budget that reportedly runs from £36 billion to as high as £80 billion over the next ten years.
This group of MPs that make up the Public Accounts Committee had been looking at the MOD's governance and budgeting processes to ensure they were fit for purpose. What they found was that the MOD's own estimates of a budget shortfall of Â£6 billion, was wildly optimistic.
Not only might the MOD have to cancel many multi-billion pound projects they have just announced the shedding of 300-500 non-critical troops from 2011, just at the time we are heavily engaged in operations in Afghanistan.
Edward Leigh, the chairman of the Public Accounts Committee, said: "Matters have worsened to the point where the department will have to take difficult decisions, such as to cancel whole equipment programmes,
The Defence Equipment and Support Minister, Quentin Davies, said: "The fundamental challenge is that despite defence spending being 10 per cent higher in real terms than 1997, the Ministry of Defence still faces significant cost pressures due to increases in the cost of major programmes.
"[This is] a challenge faced by all advanced militaries across the world, and one which the Government has already shown it is committed to addressing."
In the past programmes have been slipped so the cost goes into the following years budget. But there is only so many times you can do this before the programme becomes obsolete and needs reviewing, amending or scrapping. The 'Ministry of Defence: Major Projects Report 2009' highlighted that "intentional decisions to delay some projects have increased total procurement costs" and that "overall are poor value for money".
The country and, more importantly, our armed forces are in desperate need of a full defence review. The MOD should be funded for the job the country is expecting them to do. You cannot expect them to make their own procurement cutting decisions, then order them to war expecting them to be fully prepared.
One defence project that many will take aim at is the nuclear deterrent currently run by the Royal Navy. Should this go we may be back into forming a larger standing army to compensate, which may in the mong run prove more expensive. Then there's the coveted seat on the UN Security Council to consider. The the French recently put forward a proposal for a joint French / UK deterrent where the nation's submarines would take it in turns to patrol so cutting costs. But the US, which has helped the UK a lot (and maybe the French too) would not be too happy. Then, to ensure mutual trust we would have to have maybe 10-20% of the crews made ip of personnel from the other nation. Then there's access to nuclear targeting, launch codes and command and control for starters.
As an aside, one also wonders how many back room staff in the MOD will be cut. If there's about a four to one ratio there then expect 1,200-2,000 to go. I won't hold my breath, as in the MOD it seems that the pen is mightier than the sword.