It is usually said that security of the nation is a government's first responsibility. This is the non-negotiable bit of security for any government. However, there is no clear state based threat to the UK today. Indeed given our geography, we are probably safer from traditional military attack than at any time in the last 1000 years. Current defence policy recognises this and provides for military tasks to police our airspace and for other sovereignty maintenance capability. Recognising that the new threat to UK citizens comes from non-state actors, the task of security at home is left with the Home Office in the lead. The other tasks for armed forces have been characterised as "wars of choice". Whether it is intervention in Kosovo, Sierra Leone, Iraq or Afghanistan, the decision to go in and the scale of the commitment is one for the government of the day. The same is true in calls for military forces for international peacekeeping, humanitarian relief or even civil contingencies. While this was not a great problem during the Cold War, where the main security threat generated sufficient capability to meet the other tasks, it is now problematic.
We make broad assumptions about the level of tasking that we might expect in steady state and in an emergency. These are formalised in the defence planning assumptions, which allow the size and shape of the force structure to be calculated. The Defence budget can be costed looking at the current running costs, and the future equipment programme. The Strategic Defence Review (SDR) of 1998 was a good marker for trying to put together these slippery factors of cost, capability and tasks. But once the programme and policy are agreed, the parameters change and often quite rapidly. What we have seen since the SDR is an increase in the tasks the wars of choice have been coming up more regularly, at a greater level of involvement and sustained for longer than the defence planning assumptions assumed. The types of operation have also called for a different balance of capabilities. We see the emphasis on sustained ground force operations in theatres where travel in difficult and hazardous. So new vehicles, helicopters, air to ground support, air transport, reconnaissance, and troop numbers become short term priorities, wherever or not they may be in the long term programme.
While operations are putting new demands on the funds, the money itself is buying less because of the defence inflation effect. The Labour government since 1997 has on average pretty well maintained defence funding in real terms. However, the effect of this is not benign on capability. Personnel costs rise above the domestic inflation level. Competing with civilian comparators, the pay bill runs ahead of inflation, and bites into the programme elsewhere. Reducing numbers to balance the budget is an unhelpful option given the effect it is has on those who remain, particularly in areas of much needed specialisations. We see the growth of financial retention incentives to keep people with particular skills adding yet more to the pay bill.
Nor does the long term equipment programme stay within normal domestic inflation. It is here that wiser procurement approaches seek to keep the cost growth down. But it would be a brave forecaster that thought it is going to be possible to replicate the commercial computer industry which achieves greater performance at lower cost to the consumer each year. The Ministry of Defence is always launching new initiatives to improve its procurement system. The latest is the Defence Industrial Strategy, which seeks to give some future stability to UK defence industrial capacity. Whatever its success, the problems of small orders, technological risk and imperfect competition coupled with political interference will mean that the longer term programme will always be unaffordable, and reductions or cuts will be taken late in the day.
There are three possible approaches which are available to governments of any political colour.. The first is to continue as we are; the second is to accept that real growth is necessary to sustain capability; and the third is to look to reducing the task by sharing the burden.
If we continue as we are currently doing, then the tensions between the long term equipment programme and maintaining current operational deployments will increase. It is clear that in such battles, the problem of today will win over the hopes for tomorrow. The political reality is that if the headline is about shortage of helicopters for Iraq and Afghanistan, then this is higher priority than a somewhat nebulous Future Rapid Effects System which will not be delivered for many years to come. Clever funding wheezes will be attractive, and we can see that in the growth of private finance initiative schemes. While they may solve the funding problem of today, they will certainly make life more difficult in the future. The salami slicing approach to current force structures, laying up ships, cutting personnel numbers, deferring expensive projects, reducing final platform numbers, and dropping parts of specifications, will be the order of the day. All these exacerbate the problems of meeting the tasks.
The second, and favourite option among the defence community, is more money. Here, we need to consider what more money could do, and when it would be needed. There is a problem for the short term needs. More money cannot provide more troops overnight. They have to be recruited (not easy to increase the current level), trained (which takes experienced people out of the frontline); and gain experience. Correcting particular shortfalls can be a long process. The National Audit Office showed that the current shortfall in Royal Navy nuclear watchkeepers can be shown to stem from a failure to recruit in the early 1990s. Nor does more money always provide a quick solution to equipment shortages as we are seeing with the search for more troop transport helicopters. They will take 2 years to bring in and that by repairing grounded Chinooks and jumping the queue for new Merlins with the agreement of the Danish government. Even if you have the extra equipment, you need the specialists in sufficient numbers to operate and maintain it. You can spend early money on improving the benefits to people, but things like better accommodation still take a long time to build. In the end, like the NHS, it tends to be more pay as the answer, which of course feeds your future problem of funding armed forces personnel.
More money can help the longer term equipment programme. However, it tends to be used to add more projects rather than spending to improve the projects already in the programme. Research and technology is the one area which could benefit from extra resources, but there is little sign despite all the good words that the system can accommodate this need. If political circumstances arrive where more money becomes a possibility, then it would better to argue for real growth in the defence budget rather than a slab of money maintained level into the future. Everyone in MOD is waiting with great hopes for the outcome of the autumn Comprehensive Spending Review. A good settlement would be an agreement to keep defence spending at say 2.4% of GDP. That is a relatively small increase at first, but an undertaking to sustain growth into the future. This is not an impossible formula: the government is committed to funding international aid at 0.7% of GDP from 2010 onwards. However, the political reality is that, in the case of Defence, it will not happen.
The third option is one in which we accept that we cannot sustain the forces to meet every contingency, and that we must scale down both the number of tasks and some of our ability to operate independently. We belong to two overlapping organisations that field military forces: NATO and the EU. The last time we went into a significant operation on our own was the Falklands some 25 years ago. The current policy assumes we will only do major warfighting alongside the US. Despite all this, we hang on to a degree of independence that has become unaffordable. When NATO sensibly produced a joint -owned joint-operated airborne early warning force of AWACS aircraft, we (and the French as well) decided we must have our own systems. There are many expensive enabling capabilities which would be more economical to operate on this pooled basis either for the EU or for NATO. We are seeing other nations going down this route, but we are unwilling to do so. Funding for operations also needs to be on shared basis rather than accepting costs where they fall.
Yet we have made little progress in this direction of trusting our allies. The realist would say that without some radical rethinking we are likely to continue down the road of managing decline. The likelihood is more cuts, more deferments and more cancellations. That will lead to the UK doing less in the world just as the challenges seem set to increase.
Lord Garden gained a Cambridge MPhil in International Relations (Magdalene College 1981-82). He retired from the RAF as an air marshal, was director of Chatham House, and is now the Liberal Democrat front bench spokesman on defence in the House of Lords.