Mounting military equipment costs put UK troop numbers in peril

The rising costs of huge new military equipment programmes such as the replacement of Britain's nuclear deterrent mean the Ministry of Defence will be forced to make more significant cuts to troop numbers unless the next government agrees to keep real-terms increases to the defence budget, new figures show.

Defence is one of the most vulnerable departments because the three main political parties go into the election proposing both to protect other large departments such as health and education, and to cut overall government spending.

The Ministry of Defence's equipment plan for the next 10 years, released on Tuesday, indicates that while spending is under control, there is little room for manoeuvre. Officials expect to cut nearly £6bn from support costs through efficiency measures in the next decade. But the increased cost of projects such as new "scout" light infantry fighting vehicles and the UK's future nuclear deterrent meant the forecast for procurement spending was revised up by £5.4bn compared with the same figure last year.

Under the current deal with the Treasury, agreed in 2013, the armed forces receive a 1 per cent annual real-terms increase to their equipment budget while funding for areas such as manpower and support costs stay flat in real terms.

While the plans contain a £4.6bn "contingency" fund as well as £8bn of unallocated funding over the 10 years, independent analysis indicated such buffers could be easily eroded. The National Audit Office warned on Tuesday that spending on equipment was already "significantly higher" than the amount allocated for such purposes by the Treasury, making the ministry's spending plans unsustainable in the event of further cuts.

The MoD spent about 40 per cent of its budget on equipment under last year's plans and would spend 44 per cent based on this year's revisions, the NAO said in its official assessment of the MoD equipment plan. Any change in the next parliament to MoD funding could see this figure rise to 47 per cent or higher by 2019-20, the official watchdog said.

At such levels, the MoD would have to make more reductions to its manpower budget.

"For the third successive year [the equipment plan] is realistic and affordable and provides excellent value for money to the taxpayer across the coming decade," said Philip Dunne, minister for defence equipment, support and technology.

Defence chiefs have so far publicly stood by government spending plans but behind closed doors disquiet has mounted recently over the impact future cuts could have to already-strained forces.

Manpower cuts have already seen the number of full-time soldiers in the British army fall to its lowest level since the Napoleonic wars.

"Unattended, our current course leads to a strategically incoherent force structure: exquisite equipment, but insufficient resources to man that equipment or train on it," Sir Nicholas Houghton, chief of the defence staff, warned in December 2013.

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More recently the other defence chiefs have voiced concern about the impact on military capability that another bout of cuts would have.

Even within the equipment budget itself, expenditure is significantly skewed, reflecting the complexity and cost of certain specific undertakings.

The single biggest area of MoD spending during the next decade will be submarines, for example.

According to the latest equipment plan, more than £40bn is due to be spent on submarines - among them the "successor" fleet to the UK's current nuclear-armed vessels. This figure is more than is due to be spent on new land equipment and air equipment combined.

Twitter: @samgadjones

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