Tories hint at defence cuts
27 April 2009
The defence budget could continue to experience cuts and reductions in funding under a Conservative government, shadow Chancellor George Osborne has said.
Once thought to be one of the few areas in which the Tories would not make severe cuts, defence appears to be under additional scrutiny given the state of the government's finances.
Osborne and Dr Liam Fox, the shadow Defence Secretary are reviewing a series of cuts to the procurement budget including the Future Strategic Tanker Aircraft (FSTA) and the A400M programme.
Together these programmes would save the government around £2.7bn if cut. The A400M's problems and delays are well known. Cuts could bring the risk of financial penalties from European partners. But Osborne and Dr Fox now believe that cheaper off the shelf models could be bought which would still create savings.
The FSTA is the most expensive private finance deal ever, at £13bn. The MoD has yet to spend any substantial amounts of money on the programme since the industry partners have shouldered all of the risk. If they do not deliver, the MoD does not have to pay. Critics have alleged that the deal will leave the RAF with little control over its own transport planes. Others have said that the MoD took so long to finalise a transport plane deal that it ended up with the most expensive option available.
Cutting the programme however may lead to a major fallout in the relationship between the MoD and industry.
Word of the potential cuts was first reported in the Times.
"We are considering the future of government programmes and procurement plans that look like a luxury we simply cannot afford," Mr Osborne told representatives at the Conservative spring forum in Cheltenham yesterday.
"The public finances are out of control and that presents a clear and present danger to the prosperity of an entire generation. We will take the measures necessary to restore order and sanity to our public finances."
HAVE YOUR SAY
27 April 2009
I guess I'll vote Monster aving Looney Party again this year. At least there policies seem sane.
James - GB
28 April 2009
The Conservatives need to look inside the MOD to see why these deals are so expensive.
A400, FSTA and even the JSF could be replaced with cheaper options.
Simply cutting the defence budget as a whole though is pure folly and short sighted.
tim - romsey
28 April 2009
Up to mid 2008 the MoD had spent GBP47.5m and ten years on preparatory steps leading up to the FSTA contract. That is sufficient to buy at least one used 767. Unravelling the FSTA deal will be at least as expensive - probably even more so.
John Walkley - Budapest Hungary
29 April 2009
FSTA doesn't make sense to me. As I understand it, the RAF is also responsible for maintenance & providing base usage. Also if aircraft are leased to a foreign air force who would have priority if there is an emergency/urgent need for them at home? What happens if AirTanker decides to provide services to the Swedish Air Force as they are prepare to pay triple rate!
chris - essex
08 June 2010
FSTA would never be leased to other air forces, it is the sole provider for the RAF to replace both VC10 and TriStars which are to be phased out in 2012. The reason why it is a crap deal and so expensive is because the RAF send rookie officers to argue contracts with experienced AirTanker negotiators, and manage to sign the contracts so that no FSTA tanker aircraft can fly into Afghanistan... Clever.
Lenah - Brize