UK CDS advocates multi-year financial settlement for defence

Harry Lye 14 July 2020 (Last Updated July 14th, 2020 12:53)

Speaking at a Defence Select Committee hearing, UK Chief of Defence General Sir Nick Carter advocated for a multi-year financial settlement for defence to help it achieve better value for money and future-proofing of plans.

UK CDS advocates multi-year financial settlement for defence
Chief of the Defence Staff General Sir Nick Carter. Image: MOD/ Crown Copyright.

Speaking at a Defence Select Committee hearing, UK Chief of Defence General Sir Nick Carter advocated for a multi-year financial settlement for defence to help it achieve better value for money and future-proofing of plans.

Carter said that over the past few years UK defence had been living ‘hand to mouth’ which had made it harder to plan and make future-proofed decisions on capabilities.

Carter told the Committee: “That is absolutely what we intend to do in the course of this integrated review. The bottom line is that what we need is consistency in the budget.

“We would like to have a settlement that is long term because then we can live within our means and take the decisions that have to be taken to achieve that effect.”

He added that the timing of the Integrated Review coinciding with the Comprehensive Spending Review would give the Ministry of Defence (MOD) to hopefully plan for the long term.

“We are looking forward to a review that is aligned with the comprehensive spending review and that will give us the chance, we hope, to have a programme that is fixed to enable that long-term planning, which is critical for the country,” Carter said.

Carter said that a clear budget picture over three to five years would help the MOD make better decisions and help prevent delays to future programmes.

Speaking at the hearing, committee member MP Mark Francois said that of 32 programmes audited by the National Audit Office (NAO), only five were scheduled to be delivered on time. Carter said the delays were ‘disappointing’.

Carter added that it was important to realise that the MOD has not only been responding to ‘very rapidly evolving requirements’ but also a ‘very dynamic financial situation’ over the past five years.

Expanding on the importance of multi-year commitment to spending Carter said: “The reason it is so important is that that then gives you planning consistency. One reason that programmes get delayed is that you have to make savings in-year and you have to keep deferring things.

“If you keep deferring things, you inevitably end up with them not making the timelines that you want. If you have a defence programme that you can rely on, with a consistent set of funding over a consistent period of time, you are able to make the sorts of judgments you need to bring things in on time.

“One challenge that we have is this constant process of annularity, which causes you to have to keep taking savings and keep deferring things.”