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Future Defence Programme

Statement. I am announcing today changes to the defence programme, which will enhance the support to our personnel on operations in Afghanistan, worth £900 million over the next three years, and reductions elsewhere to make these enhancements affordable and to match our expenditure against available resources. In doing so, I have made every effort to ensure that we balance the priority of supporting our forces in Afghanistan with our commitment to maintaining the capabilities necessary for the future, and that we do not take decisions on major changes that should properly be made in next year's defence review. As I have said repeatedly to the House, support for our operations in Afghanistan is our main effort. I saw for myself last week the contribution being made by our forces across Afghanistan—taking on the Taliban and beginning to train and partner with the Afghan national army. I pay tribute to their bravery, their professionalism and their dedication. The defence budget has had the longest period of sustained real growth since the 1980s: it is now £35.4 billion—over 10 per cent. more in real terms than in 1997. As the Chancellor confirmed at the pre-Budget report last week, not a single penny is being cut from the defence budget in 2010-11, but despite this significant investment, acute cost pressures remain. There are a number of reasons for this, including rising fuel and utility costs, increases in pay and pensions and, above all, cost growth in the equipment programme. A number of major projects, while providing superb military capability, have cost more than twice their initial estimate in real terms. All of this presents us with a significant challenge both in this financial year and as we look forward. The National Audit Office's "Ministry of Defence: Major Projects Report 2009", published today, describes the result of these pressures. Going forward, I am determined that we take action to deal with these pressures and to address the challenges head on. That is why we commissioned the hard-hitting Bernard Gray report, why we are taking steps now to implement his report and why we are reforming defence acquisition better to match our priorities to our spending. Getting this right is critical; tough choices are required. We will be publishing in the new year the strategy that will provide a planning and management framework to produce an affordable equipment plan. I am determined to ensure that those who put themselves in harm's way on our behalf remain properly supported and resourced. Our priorities in Afghanistan are to provide the best levels of personal equipment and protection to meet the fast-changing threat and to increase investment in key capabilities, including helicopter capability and our strategic air bridge. I am therefore pleased to announce a number of capability enhancements to support the mission in Afghanistan. They are in addition to the operational costs paid for from the reserve, which continues to increase year on year and has risen from £738 million in 2006-07, when we deployed to Helmand, to over £3.7 billion this year. By the end of 2009-10, the reserve will have contributed over £14 billion to operations in Iraq and Afghanistan, including some £5.2 billion on urgent operational requirements. My decision to fund these enhancements from the core defence programme reflects our determination to ensure that the Ministry of Defence is supporting the current campaign, and our belief that we expect such capabilities to feature in a range of future conflicts that our forces may face. The enhancements total £900 million over three years. They include an improved dismounted close combat equipment package, making equipment such as state-of-the-art body armour and night vision goggles available to 50 per cent. more troops so they can train with it not only before deploying to Afghanistan but before they embark on pre-deployment training; more Bowman tactical radios and patrol satellite systems to improve communications between troops and commanders; an additional £80 million for communications facilities for special forces; increased funding for our intelligence, surveillance, target acquisition and reconnaissance capabilities; and a doubling of Reaper capability. As the Prime Minister announced yesterday, there will be further improvements in our counter-IED capabilities, particularly intelligence and analytical capability to target the networks that are doing so much damage to our troops and to Afghan civilians. There will be an additional C-17 aircraft to strengthen the air bridge, and improvements to defensive aids suites and support arrangements for the Hercules C130J fleet so that we can maximise their deployability and use. There will be 22 new Chinook helicopters, with the first 10 arriving during 2012-13, as set out in the future rotary wing strategy which I also announced today. In addition to that package, the Treasury has signed off the latest funding from the reserve—over £280 million—to support a range of additional equipment for Afghanistan. It will include more new vehicles—for instance, there will be a 31 per cent. increase in the number of Husky tactical support vehicles and a 40 per cent. increase in the number of Jackal fire support vehicles for deployment in Afghanistan—and additional equipment to combat the threat of improvised explosive devices, including over 400 hand-held mine detectors, robots, and other items of kit. That one-off package is in addition to the resources already allocated for urgent operational requirements for the current financial year, and in addition to the protected mobility package that has already been announced. The pressure on the public finances means that we need to prioritise carefully within our resources. We need to make reductions in lower priority areas to fund these enhancements, and to better match the defence programme to available resources. That has meant stopping or slowing spending in other areas, and pushing down hard on headquarters costs and overheads. Inevitably these measures will have an impact on some capabilities, but we judge that it will be manageable. We will continue to reduce the number of civilians working in the Ministry of Defence. We recognise the importance of the civilian work force and the critical outputs that they deliver. That is why in the pre-Budget report we announced an independent study of the shape and size of the civilian work force, including the distribution of tasks between civilian and military personnel. This study will be undertaken by Gerry Grimstone and will inform the defence review. Without prejudicing its outcome, we would expect to be able to continue reducing the overall size of the civilian work force, above the 45,000 reduction already made since 1997. This is not just about doing more with less; we will need to make some hard decisions about what we can stop doing altogether, and about how we can bear down on other costs. The other key adjustments we are making to the current programme are as follows. In line with our current aspirations to reduce to two fast jet types—the Typhoon and joint strike fighter—we will pursue without delay the Typhoon future capability programme phase 2. This is fundamental to the development of its multi-role capability and integration with the latest weapons. We will reduce now the size of our Harrier fast jet force by one squadron, close RAF Cottesmore and consolidate the Harrier force at RAF Wittering. This will maintain our joint carrier-based combat air capability. We plan to reduce our Tornado and Harrier force by a further one or two squadrons; decisions on the make-up of our future force will be taken in the defence review. We intend to withdraw the Nimrod MR2 force 12 months early and slow the introduction of the MRA4. This will have an impact on our use of RAF Kinloss, but there is no change to our assumptions on the future basing of the MRA4 at this stage. The decision to withdraw the MR2 has been taken for financial reasons and is unconnected to the report by Mr. Haddon-Cave on the circumstances that led to the tragic loss of the Nimrod XV230 in Afghanistan. Mr. Haddon-Cave was very clear in his report that the aircraft remains safe to fly. I will make a further statement on Mr. Haddon-Cave's report in the House tomorrow. We intend temporarily to reduce some aspects of Army training that are not required for current operations. We will also take one survey ship and one minehunter out of service early, and cancel the current competition for unprotected utility vehicles and defer the programme for two years. We will bring forward the planned reduction in some of the older maritime Lynx and Merlin Mk 1 aircraft prior to the transition to the more capable Wildcat and Merlin Mk 2. We will spend less next year than previously planned on the wider defence estate but will continue to prioritise investment in both service family accommodation and single living accommodation. The measures I have set out will also have implications for service personnel numbers. The details have not yet been finalised, but the emphasis will be on prioritising our manpower for operations in Afghanistan. Changes will be targeted so as to avoid affecting personnel involved in current operations. Reductions in service personnel numbers will mainly be managed by slowing recruitment and releasing some personnel, in accordance with their contracts. I appreciate that these changes will be difficult for many service and civilian personnel, their families and the communities in which they are based. I am fully aware of the consequences, and we will support those affected. In making these choices, I have had to consider that the Government and the Opposition parties are committed to carrying out a defence review after the next election. A Green Paper explaining the Government's vision of what that review should encompass will be published early in the new year. The measures reflect our stated priority of support for the Afghan campaign, and continued investment in new capabilities with enduring military benefit. This is a difficult balance to strike, but I am confident that we have got that balance right, and that that will be demonstrated where it matters most: on the front line, where our brave servicemen and women, supported by MOD civilians, are fighting for the future of Afghanistan and the security of our own country.