The Bernard Gray review into defence procurement is finally out. It is as damning as billed. Most of the conclusions were leaked over the summer. But seeing the raw findings is shocking. The graph below is a terrifying summary of the financial mess at the Ministry of Defence. What it tells you is that, on a best case scenario, the MoD can’t afford between a quarter and a third of all the equipment it plans to buy over the next decade. In the worst case scenario (which is more realistic given the national debt problems), Britain can’t afford about half of it: in 2020 the MoD would have about £5bn to spend and about £10bn of commitments. To put it in balance would mean dropping or massively scaling back the aircraft carriers, joint strike fighter, most other aircraft programmes, a much less ambitious or delayed Trident.
How did this happen? Well, the story is all in the difference between the purple line (the 2005 equipment plans) and the black line (2009). Officials underestimate costs to get projects signed-off (in four years the planned commitments soared by almost £100bn), then push everything to the right (delay it) when there is no money to pay for it. Something will have to give. But can the Treasury afford to wait for a strategic defence review next year?
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