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  1. Analysis
March 20, 2012

UK Defence Budget 2012 – Afghan withdrawal gives a budget boost

Forecast spending for 2012 has been lowered as government officials confirm the UK will pull out of Afghanistan by 2014. details what the UK Budget 2012 will mean for defence.

By Liam Stoker

With defence spending now firmly falling under the auspices of the Strategic Defence and Security Review (SDSR), no big surprises were expected from the UK Chancellor’s budget speech today as regards personnel and equipment spend.

Budget 2012: comparing defence cost to previous years

Whilst defence spending will decrease from the 2011 figure of £40bn to £39bn in 2012, it will however account for a slightly higher percentage of total governmental spending. Defence will account for 5.71% of national spending, the second highest amount in the last six years, second only to 2010 when it accounted for 5.73%.

Infographic Defence Spend

This infographic illustrates the rise and fall of the UK’s national spend in recent years, detailing the total defence expenditure within the budget and the precise percentage of government spending that is attributed to defence costs.

UK Chancellor of the Exchequer George Osborne did confirm that withdrawing British troops from Afghanistan, due to be completed by 2014, military spending is to be reduced from what was originally planned, saving some £2.4bn.

"The cost of operations – which are funded by the Government’s Special Reserve and entirely separate from the defence budget – are expected to be a total of £2.4 billion lower than planned over the remainder of the Parliament," said Osborne.

Budget 2012: taking care of army personnel

Of the savings, £100 million will be used for much-needed improvements to military accommodation. In another move designed to improve living conditions for military personnel and their families, family welfare grants and council tax relief for armed forces members doubled.

UK Army troop numbers 2011 to 2020

Infographic showing the reduction in UK Army trained ground forces 2011 to 2020

However, this will not prove much comfort for the 22,000 members of who will lose their jobs in the run-up to 2015. In the initial tranche announced last September, 2011, the RAF and Gurkhas were the hardest hit by compulsory redundancies, with 500 airmen losing their jobs alongside 140 soldiers from the 3,500-strong Brigade of Gurkhas.

After 2015 further job losses are likely, as the army has been told to reduce numbers to 82,000 by 2020, which is one-fifth below current numbers, with more Gurkha redundancies expected.

Budget 2012: decisions still pending on F-35B

When the dust has settled on the 2012 Budget, Prime Minister David Cameron will likely announce any important changes to the military equipment purchase plan set out in the SDSR separately. This would include a decision on whether to revert to the F-35B short take off, vertical landing (STOVL) variant of the Joint Strike Fighter.

To work with the F25C carrier variation, the second Queen Elizabeth Class aircraft carrier HMS Prince of Wales would need to be converted to a catapult assisted take off barrier arrested recovery (CATOBAR) configuration at a cost upwards of £1.8bn. The cost of the carrier programme has reportedly already doubled to £7bn.

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