Defence Budget Is Under "Extreme Strain", MPs Warn

The "structural hole" in the defence budget is undermining government efforts to develop a coherent national security strategy, a parliamentary inquiry has warned.

The Joint Committee on National Security Strategy expressed concern that the launch in January of the Modernising Defence Programme (MDP) - effectively a mini-defence review - was no more than a "short-term political fix".

While there were growing pressures across the entire national security budget - including the intelligence agencies, cybersecurity and the Foreign Office - the committee said the defence budget was now under "extreme strain".

It said the last strategic defence and security review (SDSR) in 2015 had perpetuated a "long-standing failure to match ambition with capabilities and funding, relying instead on unrealistic promises of efficiencies and reduced contingency funding".

The shortfall meant that when ministers launched a "cost neutral" national security capability review last year - intended to update the SDSR in the light of evolving threats - they were forced to spin off defence through the MDP to avoid major cuts to the Armed Forces, the committee said. 

However, the result was that the capability review had become an "uncomfortable halfway house" between a "quick refresh" - as originally intended - and a full SDSR, the committee said. 

"We understand that the challenges posed by the hole in the defence budget - and the inability of the Ministry of Defence to address these on the timetable set for the national security capability review - made it necessary on this occasion to separate defence from the wider review," the committee said.

"Nevertheless, we are concerned that such financial constraints are distorting the UK's national security."

"We are further concerned that this short-term political fix once again exposes a long-term fault line in Whitehall between defence and other security-related departments and policies, which leaves the government unable to bring them together coherently in setting and delivering its national security strategy.

"This will likely remain the case until the inadequate level of the defence budget is resolved."

In a separate report, the Commons Public Accounts Committee expressed concern about the high levels of "cannibalisation" - the practice of taking spare parts from one piece of equipment to keep another going - particularly in the Royal Navy which has seen a 49% increase over the past five years.

It said there were particular problems with the Type 45 destroyers, where there had been a 217% increase over the same period, and the Astute-class submarines, where cannibalisation had risen by 107%.

An MoD spokesperson said:

"Buying the best equipment for our Armed Forces whilst getting value-for-money is our priority, and we do that through competitive tender wherever we can." 

Sometimes single source is the only credible option and in those cases we work closely with the SSRO, who have already helped reduce contract costs by over £300m and strengthened our hand in negotiations."

A Royal Navy spokesperson added:

"Less than half a percent of parts we use come from swapping components, and we only do this when it’s absolutely necessary to get ships out of port and back onto operations more quickly. We continue to make improvements to how we manage this long-established practice."

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