* Defence equipment plans stretches to 2022
* Meant to reduce uncertainty; experts question assumptions
By Mohammed Abbas
LONDON, Jan 31Britain published on Thursday a
159-billion-pound ($251 billion) long-term defence equipment
spending plan, a move aimed at reversing decades of
mismanagement but which drew only qualified praise from experts.
The plan covers spending from 2012 to 2022, the first time
the Ministry of Defence (MoD) has outlined defence equipment
spending over such a long period, reflecting the gestation time
of major military projects.
Equipment covered in the plan contained no surprises, having
been outlined in the MoD's last major planning exercise, the
2010 Strategic Defence and Security Review (SDSR), which charted
a course for British security needs by 2020.
British arms firm BAE Systems, Europe's largest
defence contractor, is behind most of the large projects
outlined in the plan, including submarines, ships, aircraft
carriers and the Typhoon fighter jet.
The MoD has for years been criticised by spending watchdogs
for over-optimistic cost and time forecasts for equipment
projects, a matter that has grown in importance as Britain
slashes spending to fix a budget deficit.
The spending plan includes a 4.8 billion pound contingency
allowance to manage unexpected cost increases, as well as an
unallocated 8 billion pounds for future equipment needs.
"Step by step, we are clearing up years of mismanagement
under the last government by ending the culture of
over-promising and under-delivering," Defence Secretary Philip
Hammond, a Conservative, said in a statement, referring to the
opposition Labour party.
Labour labelled Hammond "hubristic" and said his claims to
have balanced the defence budget were "wild".
The MoD said the spending plan addresses what had been
estimated to have been a 74 billion pound equipment funding gap,
and that it had received the backing of the National Audit
Office (NAO), parliament's spending watchdog.
However, the NAO said in a report reviewing the MoD's
spending plan that while the ministry was approaching defence
spending on a "more prudent basis" and had "taken significant
positive steps", uncertainty remained.
"There is systemic over-optimism inherent in the
department's assumptions around the costing of risk and
uncertainty .... which may not be sufficiently mitigated by the
contingency provision," the NAO said.
It stressed that its assessment of the spending forecast
only took into account equipment procurement and not equipment
support costs, which at 86 billion pounds makes up more than
half of the spending plan.
The NAO also said the plan was "unlikely to be realistic"
without a comprehensive analysis of risks and uncertainties.
John Louth, director for defence, industries and society at
the Royal United Services Institute defence thinktank in London,
said the MoD's plan lacked detail and was vulnerable to shocks.
"Whilst they should be applauded for publishing a 10-year
plan, the information we have is very thin. It doesn't really
talk about any accounting assumptions or anything that gives an
understanding of how the numbers were generated," he said.
"If you have a 10-year forecast, you're making an awful lot
of assumptions over how the world will be over that 10-year
period .... We haven't been able to forecast any of the
operations we've been involved with," he added.
An MoD spokesman said future "wider economic conditions"
could have an impact on the plan, as well as another SDSR
planned for 2015.
The major defence equipment projects covered in the MoD
spending plan are:
* 35.8 billion pounds on seven BAE-built Astute-class
submarines and developing a replacement for the four
Vanguard-class submarines used for Britain's Trident nuclear
* 18.5 billion pounds on fighter jets, and UAVs, or drones,
including the Joint Strike Fighter built by U.S. firm Lockheed
Martin Corp, of which Britain has so far committed to
buy 48, and the Typhoon, built by a consortium of BAE, Italy's
Finmeccanica and European aerospace group EADS
, of which Britain has ordered 160.
* 17.4 billion pounds on two aircraft carriers, six new Type
45 destroyers and the development of the Type 26 Global Combat
Ship, all built by BAE.
* 13.9 billion pounds on air-to-air refuelling, passenger
and heavy lift capability by leasing Airbus aircraft through the
EADS-led AirTanker consortium.
* 12.3 billion pounds on armoured fighting vehicles,
including the Scout - built by General Dynamics - and the
Warrior, built by GKN.
* 12.1 billion pounds on helicopters, including the Boeing
-built Chinook and Apache, and the AgustaWestland-built
* 11.4 billion pounds on assorted missiles, torpedoes and