The U.K. faces capability gaps in tactical air transport and air-to-air refueling as it prepares to pull troops out of Afghanistan. Delays in the introduction of the Airbus Military A400M airlifter and A330 Voyager tankers purchased through the Future Strategic Tanker Aircraft (FSTA) program as well as budgetary constraints have created “critical shortfalls in some capability areas,” according to the U.K. National Audit Office (NAO).

In its annual Major Projects report, which looks at the 16 largest procurements being undertaken by the British Defense Ministry, the NAO says both air transport programs along with the development and construction of the Queen Elizabeth II aircraft carriers are responsible for the biggest cost increases. The report states that expenses for FSTA rose by £257 million ($412 million) between 2011 and 2012, while those for the A400M program went up by £163 million during the same period. However, the NAO points out that these costs were caused by higher fuel prices and contributions to export levy facilities, respectively, over which the ministry has little control.

Delays in the two programs have forced the ministry to find expensive workarounds as it prepares to begin withdrawing troops from Afghanistan at the end of 2014. According to the NAO, £787 million has been spent on air transport and air-to-air refueling aircraft to support current operations and address capability gaps. The late arrival of the A400M has led to the life extensions of several increasingly elderly and maintenance-intensive Lockheed Martin C-130K Hercules models to meet tactical transport needs, while extra capacity will come from the purchase of two BAe 146-200 airliners now being converted for operations in Afghanistan in the coming months.

The NAO also states that there will be a one-third gap in tactical air transport starting in 2022 when the Lockheed Martin C-130J is retired. Strategic airlift provided by the Royal Air Force's fleet of eight Boeing C-17s will “essentially be able” to meet the requirements, the report says. The C-17 fleet was boosted in 2012 by the arrival of an eighth aircraft, and work is progressing on the possible addition of a ninth before the expected closure of the C-17 line in Long Beach, Calif.

Ongoing issues to clear A330 Voyagers for air-to-air refueling has forced the RAF to retain the Vickers VC10 fleet beyond its March 2013 retirement date until September at least, the NAO says, while the Lockheed Martin TriStar tanker/transport's retirement has been moved to March 2014 from July 2013 at a cost of £7 million. The Voyagers are expected to achieve full air-to-air refueling capability in May 2014.

But in an open letter to the NAO, Phill Blundell, CEO of AirTanker Ltd., which provides the Voyager tankers under the FSTA contract, says that although the report highlights that the program is on time and on schedule, the report “significantly distorts perception of its performance, especially against other programs where those same inflationary costs are not considered.”

Blundell's letter also states that “the suggestion made in the report that the [Defense Ministry] is extending the service life of its VC10 and TriStar fleets because of perceived risk of 'delays' in the FSTA program is disappointing given the report's acknowledgement that the program, in actuality, is very much on schedule.”

In the letter, Blundell asserts that the report is a “detraction from a program that continues to make good progress toward full service capability. This includes our expectation of imminent release to service from the [Defense Ministry] to begin air-to-air refueling operations ahead of substantial buildup of capability throughout this year and next.”

Three Voyagers have entered service with the RAF, but they are only cleared for use in the air transport role because of issues with their hose-and-drogue refueling system. After problems were discovered with the basket, AirTanker says a new one has been “trialed and successfully tested and is waiting for 'paper' approval from the [Defense Ministry].” The company says it expects this “imminently.”

The NAO report also focused on helicopter lift, in particular updating of CH-47 Chinook avionics and the introduction of the AgustaWestland AW159 Wildcat. Project Julius is a £280 million effort to achieve a common avionics standard among the 46 Chinooks now in operation with the U.K. armed forces and the 14 extra aircraft ordered from Boeing. Due to delays in the software integration process for the Thales TopDeck cockpit, officials pushed service entry back 19 months to April 2013 from September 2011. However, the first Julius aircraft were able to reenter service last summer and were deployed to Afghanistan in December, reducing the delays by 10 months.

Introduction of the Wildcat into British Army service has been shifted to August 2014 from January 2014, while the naval version is still expected to enter service in January 2015.

Less clear, though, is progress in co-developing with France the naval Wildcat's primary weapon, the Future Air-to-Surface Guided Weapon (FASGW) (Heavy). According to the NAO, decision points for the new weapon, which will replace the Sea Skua anti-ship missile, were delayed last year because of the need to secure approval from France.

“Discussions are still ongoing, but are dependent on the outcome of the French government's spending review that is currently being undertaken,” the NAO says. “There will now be at least a 19-month gap between the existing capability leaving service and the new missile being available.” The NAO adds that the Defense Ministry is examining whether it can extend the life of the Sea Skua until the FASGW weapon is operational.

The in-service date of the new Meteor air-to-air weapon has been pushed back to June 2017 because of delays in the completion of the Eurofighter Typhoon's Future Capability Program 1, which is now expected to enter operation in December 2013, boosting the type's multirole capabilities in the air-to-air and air-to-ground role.

Meanwhile, costs for the development and introduction of the Queen Elizabeth II-class aircraft carrier also increased by £217 million between 2011 and 2012. The NAO points out that the increased expenses are a result of the ministry and industry “having greater understanding of the costs and not being able to fully deliver agreed cost-reduction opportunities.”

Amyas Morse, NAO comptroller and auditor general, says the Defense Ministry “faces a difficult task of striking a balance between delivering the capabilities it wants and those it can afford. There will always be factors over which [it] has limited control, but it must do more to learn from previous projects.”

While the NAO report focuses on program management problems, several former senior commanders have expressed concern that defense is seen as a “sacrificial lamb,” suffering larger cuts to meet austerity measures than other government departments.

In a report for lobbying group the U.K. National Defense Association, former Air Chief Marshal Michael Graydon writes that “mass matters, and all the armed forces, the Royal Navy and RAF in particular, will have to find a better balance between the demands of high-tech warfare and the simple fact that quantity has a quality of its own; it will require an honest recognition that without the United States we are severely restricted in what we can actually achieve.”