British MoD to Receive Additional Funding in Effort to Protect Key Programs

The British Ministry of Defense will receive an additional GBP1 billion ($1.28 billion) boost to its in-year budget following an announcement by U.K. Treasury Chancellor Philip Hammond on October 29. According to Hammond the supplemental funding is largely being provided to support three strategic areas: cyber security initiatives, anti-submarine warfare capabilities, and the Dreadnought nuclear submarine build program.

The funding comes at a time the MoD is under tightened fiscal straits due to a funding gap in the rolling 10-year, defense equipment plan. The so-called “black hole” in the equipment budget ranges between GBP4.9 billion ($6.5 billion) and GBP20.8 billion ($28 billion) above the updated GBP179.7 billion budget (consisting of GBP84.8 billion for equipment procurement, GBP88.9 billion for equipment support, plus a GBP6 billion central contingency provision) according to the British government’s financial watchdog, the National Audit Office (NAO).

Defense Secretary Gavin Williamson has been fighting a rearguard action to protect existing capabilities while pressing Treasury for additional funding. Williamson has reportedly been pressing for as much as GBP4 billion ($5.13 billion) in top-up allocations to the annual defense budget. Earlier this year the MoD was able to wrangle GBP800 million in additional monies to support the ongoing Dreadnought nuclear submarine project (armed with Trident ballistic missiles), which serves as a replacement for the current four-boat Vanguard-class submarine strategic nuclear deterrent. Some GBP600 million ($769 million) of this total came from a contingency fund ring-fenced for the Dreadnought program by the government.

While Williamson appears to have won a small victory with the additional funding, a larger battle looms. His ministry is undertaking a Modernizing Defense Program review announced this past January that was expected to be released in September. The review, according to Williamson, will take into account ongoing – and growing – challenges confronting the British military in an ever-evolving defense landscape, including cyber, chemical, biological, radiological, nuclear and electromagnetic threats.

But now it appears that the modernization review is unlikely to emerge prior to a comprehensive government spending review to be undertaken in 2019. Along with the updated 10-year equipment plan the Modernizing Defense Program review is expected to provide a navigational course for the defense portion of the upcoming comprehensive government spending plan according to Hammond.

In addition, with political and economic uncertainty looming over the British government at a time a “hard-Brexit” severance from the European Union remains a possibility there is the question of whether the legacy Strategic Defense and Security Review (SDSR) put forth in 2015 should be replaced sooner rather than later.

About Daniel Darling

Dan Darling is a senior analyst covering both the Europe and Asia-Pacific regions for Forecast International's International Military Markets group.

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