Euro allies must coordinate on disorganised weapons systems to save cash, says think tank
The best way to fund defence is by working together with our European allies, an economist has told BFBS Forces News, in light of the continent's "disorganised" and numerous different weapon systems.
William Ellis, a senior economist at the Institute for Public Policy Research (IPPR), said defence could be funded through joint procurement programmes and stockpiling weapons and ammunition to cover the shortfall from the Government's Defence Investment Plan.
"Basically, by being quite creative with allies on purchasing things together and storing them together, you could free up about £3.4bn to invest and borrow, and invest elsewhere, maybe back in the Armed Forces or for other priorities," Mr Ellis said.
Joint procurement and reducing duplication
Joint procurement would mean that the countries could secure lower prices by combining orders and reducing duplication between European countries.
For example, Europe currently operates 178 major weapons systems, compared with approximately 30 in the United States.
Mr Ellis said that Europe has 17 different variations of tank, while the United States only has one.
The IPPR found that coordinated purchasing could decrease equipment costs by up to 20%.
"I think the first thing to say is that this reflects the geopolitical reality that we're in," he said.
"The US is stepping back quite a bit from Nato, [and] it's seen that we will have to defend and procure with our allies.
"We are going to have to defend together as Europe, so it makes sense to go out there and have the same kind of systems, the same kind of weaponry."
Hitting the 3% of GDP defence spending target
The think tank's analysis comes as the government looks at ways to meet the target of spending 3% of GDP on core defence spending by 2030.
The IPPR estimates that reaching 3% of GDP would require roughly £13bn of additional annual spending, meaning that the government would still need to make difficult long-term borrowing, tax and spending decisions.
Therefore, the think tank has said that the UK should join or work on creating a multinational defence bank to support defence-related factories, supply chains and manufacturing capacity.
"We're recommending that if you're going to do this trade procurement thing, you should do it under a defence bank with as many people as possible for the most savings to do this as efficiently as possible," Mr Ellis explained.
In a defence bank, every £1 of paid-in capital could generate between £5 and £8 of lending, helping the UK and its European allies build shared capabilities and cut the reliance on uncertain US security guarantees.
"Andy Burnham has a real opportunity as he looks to improve Britain's defence spending," Laura Chappell, associate director at IPPR, said.
"Working with allies, including Europe and Canada, not only offers the opportunity to procure more efficiently and support reindustrialisation, but it helps us to build the defence alliances we need for the future."
Additional reporting by Sue Sharp.
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