The annual defence white paper is always a heady mixture of self congratulation, wild optimism and selective release of information. Yet, there was unusually widespread agreement that the Strategic Defence Review (SDR) paper published last year was a good analysis of the UK needs in the post Cold War world. The plans appeared reasonably realistic both in timings and costs. But the track record of previous annual defence statements gives little confidence in their ability to survive the events of even a single year, let alone plan for the coming decade. One year on from the SDR much has happened in the foreign policy and security field. The defence programme may now need more than just a tweak at the margins.
Defence requirements are driven by foreign policy, and there have been some notable changes to the foreign policy assumptions in the past 12 months. Of greatest significance has been the volte face on European defence. The SDR was developed from the traditional atlanticist foreign policy assumptions. It makes little mention of the European dimension of defence planning. This is scarcely surprising as the Government did not make its U-turn on European defence co-operation until after the SDR had been completed. Experts on both sides of the Channel are still trying to decode the delphic pronouncements of Tony Blair at the British-French summit at St Malo in early December 1998. It is however clear that the Prime Minister is serious about seeking better ways for the Europeans to provide defence capability, and that the UK is to be at the heart of Europe in this respect. The second post-SDR foreign policy change has been the announcement last month that the UK is to allocate significant forces on call for United Nations operations. Requests for such an arrangement had in the past been resisted by successive British governments. Thirdly, in mid July, Robin Cook was reported as making overtures for the establishment of an EU rapid reaction force. This was followed almost immediately (20 July 1999) by the Anglo-Italian declaration on the European Defence Initiatives, which called for European-wide goals in the defence field.
If the foreign policy drivers, which shaped the SDR, have changed over the past year, then equally recent military experience has tested some of the core planning assumptions. The lessons of Kosovo will take many months to formulate. At this stage, there will be some broad generalisations, which are likely to shape the defence programme. While it did not prove necessary to move beyond the air campaign, the government will be very well aware of how shortage of army manpower constrained its actions. With Northern Ireland currently less hopeful, continuing commitments in Bosnia and Kosovo, and army retention rates low, there is little capacity for new exciting foreign policy initiatives for the UN and the EU. While such roles will be covered by double earmarking of forces, they will still have to train with other contributing nations for the new roles. However much forces are double and triple earmarked, army manpower numbers do not add up. The vicious spiral of overcommitment, followed by poor retention which leads to more over commitment must be cured. Since it is clear that reduction in commitments is no part of the agenda, urgent measures will need to increase the army establishment, as well as separate measures to improve retention. Both of these carry significant unplanned costs.
Experience in Kosovo will also affect the assumptions about the forward equipment programme. For all the great investment in air systems, the UK was a relatively minor contributor to the offensive air campaign. The predilection of NATO air forces to spend so much of their money on fighters was again proved to be less than sensible. In the war of statistics it may be politically useful to claim air defence sorties as part of the Alliance contribution, but in the real war for Kosovo it was modern offensive airpower with timely reconnaissance that counted. It still remains a mystery as to why it was thought worthwhile, in a blaze of publicity, to park a British aircraft carrier in the Aegean for some of the conflict. The Sea Harrier sorties counted towards the war effort, yet did little but protect the carrier itself. The planners will want to see new emphasis on cruise missiles, smart bombs and GPS guided bombs. This will mean procuring both new weapons and more stocks. If other nations take the same lesson, it could mean that Eurofighter numbers will come under pressure, thus raising the unit costs.
It should also be now coming clear where the real financial risks are in the SDR assumptions. The SDR contained a number of exciting new innovations, which because of their novelty were difficult to cost or time accurately. Smart procurement, Public Private Partnership, fast defence lands disposal and the central logistics organisation are big ticket items. It would be surprising if all go according to plan. There will also be the now routine cost growth in the equipment programme which the NAO criticises with such relish every year.
When the new commitments and the new demands both for manpower and equipment are fed into a programme which is already showing signs of being overheated, it looks as though rather more than minor adjustments may be needed soon. One answer would be to have a real increase in the defence budget by perhaps as much as 10% or around £2bn. This would certainly signal that the Government was very serious about its leadership in Europe on defence matters. The alternative is the usual messy mix of damaging savings measures, delayed equipment and increasing overstretch.