In December 2018, just before policymakers and pundits escaped their besieged bunkers for Christmas, the UK government published the long-awaited final report on its Modernising Defence Programme. This programme was meant to update the military commitments made in the last full-blown Strategic Defence and Security Review of 2015.
How far it has succeeded in that task is debatable, however. The report’s brevity and lack of detail left many lamenting a missed opportunity.
Revising 2015’s review became necessary thanks to a marked change in circumstances. Partly, those changes are strategic. Relations with Russia have deteriorated even further since 2015, Islamic State (IS) is much diminished, and new military technologies and tactics are advancing.
Mainly, however, those changes are economic. The lower growth trajectory induced by Brexit has reduced the resources available to the Ministry of Defence (MOD). (The UK Defence Budget is set at 2% of GDP, which means that if GDP is smaller than it might have been, so too is the budget available to the military.)
The pound’s depreciation since the Brexit vote in 2016 has also raised the real costs of buying defence equipment from abroad, such as the US-sourced F-35 combat jet. A broader rise in inflation has further added to cost pressures on a 2015 review that was already seen as financially optimistic.
Taken together, these pressures have stretched the disconnect between intended military expenditures and available resources beyond the point that could reasonably be ignored. A political consequence of this has been the MOD – currently led by Gavin Williamson MP, a Defence Secretary unusually willing to provoke budgetary confrontations within Whitehall – demanding more government money to ensure that neither current nor planned military capabilities receive further cuts.
The Treasury, for its part, recognises that Britain’s security environment has deteriorated to a worse condition than at any point since the Cold War. Yet it is still attempting to avoid major new spending commitments until the full fiscal shock of Brexit becomes clear. It has also long been sceptical of the MOD’s budgetary requests, viewing the department as a perennial financial black hole.
Political turmoil, strategic change
With a full cross-government spending review now scheduled for post-Brexit 2019, this Modernising Defence Programme report represents multiple levels of compromise. It has provided the government with a “good news” item, in the form of modest amounts of new funding to important areas such as high-technology research and “net assessment” of threats.
It also recognises growing pressures in defence, such as the need to increase the usability of existing equipment if Britain is to pose a credible conventional deterrent against Russia (for example, by ensuring adequate numbers and varieties of munitions for ships and aircraft).
But the report has also dodged some of the hardest choices. For if more money is not eventually forthcoming from the Treasury to pay for equipment – and the people and infrastructure who turn such equipment from mere “stuff” into effective fighting capability – how will it be paid for or what will need to be cut?
These “micro” politics are all occurring against a backdrop of “macro” change in Britain’s strategic environment. The post-Cold War era of unrivalled American (and therefore Western) power is arguably coming to an end, with the rise of China and partial resurgence of Russia.
All of Britain’s closest alliances are simultaneously in flux. With the major European powers, this is due to Brexit. With the US, it is thanks to a combination of President Trump’s mercurial temperament and a longer standing requirement to pivot towards containment of China.
Yet even as Washington wants to focus on Beijing, European states face a hostile power in their own region, in the form of a Russia that sees good reasons to weaken and ideally break NATO.
Besides the Russia situation, political demands for UK military commitments in other regions also still remain – in the Middle East, Mediterranean, South Atlantic, and increasingly in East Asia too. This difficulty of juggling pressing regional defence needs with a desire for expansive global involvement reflects two competing sets of long-standing pressures in British strategy: the aspiration to play an influential role in the world versus the need to safeguard national security.
A combination of strained alliances and ever-expanding political demands explains the MOD’s determination to secure funds to rebuild UK military capability. After 20 years of preoccupation with counter-terrorism and humanitarian intervention, the current Defence Equipment Programme is now more focused on the heavier “state-on-state” capabilities required to deter a hostile major power in the North Atlantic region (warships, combat aircraft, mechanised ground forces, and so forth). And all of this must take place while still having enough left over to do a bit of all the other things that are asked of the armed forces.
Ready for battle?
Without the budget to fulfil recent ambitions, the MOD will not be confident that it can meet Britain’s defence needs. So rather than accept cuts today, this latest report plays for time. The hope is that the tougher security environment of tomorrow will ultimately persuade the Treasury to release more resources for defence, especially once Brexit has been and gone.
To that extent, December’s report achieved its aims. A bit more funding for advanced technology research and net assessment is no bad thing. A recognition that Britain needs more robust stockpiles of fuel, spares, munitions, and expertise was long overdue. And the MOD has managed to delay its day of reckoning with the Treasury until after the initial fiscal shock of Brexit.
A delay is not a victory, however. There is no sign yet of the substantial uplift in funding or the cuts to planned capabilities necessary to place the armed forces on a sound budgetary footing. That hard day of financial reckoning could therefore still be to come.