U.K. To Examine Defense Spending Mismatch

The U.K. ministry of defense this month is expected to address the scale of the spending discrepancy between budgets and plans in the wake of last year’s Strategic Defense and Security Review. A senior panel of ministry officials will convene on Jan. 25 to discuss the issue. There are clear indications the cuts in the SDSR still leave a defense program that outstrips budget plans, but the size of the gap is still being debated. “The whole force is about ₤1 billion ($1.5 billion) down in cash terms for the next few years” with a gap as large as ₤2 billion per year possible, says Michael Clarke, director of the Royal United Services Institute (RUSI). “If the objective [of the SDSR] was to balance the books, they are not balanced,” he said at a RUSI conference reflecting on the review. The defense ministry is in the process of completing the 2011 program review by around April. That process “is already a nightmare” owing to the financial situation, Clarke says. The SDSR “significantly reduced the underfunding” in the defense budget, says Nick Harvey, minister of state for the armed forces. However, he acknowledges, “we are not there yet” in terms of getting the program into balance. A senior military official notes that given the heavy commitment of all services to Afghanistan, there is little flexibility in finding near-term savings to plug the gap. “Our room to maneuver is clearly limited,” the official says. The defense ministry is looking at infrastructure divestitures and personnel cuts to help plug the residual hole of around ₤4 billion. But that savings target is seen as “ambitious.” Long-term, defense officials emphasize that achieving the planned force structure in 2020 requires the government’s promise of real-term budget increases in the second half of the decade. However, officials acknowledge that is contingent on an economic recovery.