The U.K. will spend around £160 billion ($260 billion) on defense equipment and services in the next decade, which includes more than £4 billion set aside as a “contingency reserve,” Defense Secretary Philip Hammond told Parliament May 14.
The £160 billion covers almost £152 billion that has been allocated to specific budget lines, including more than £4 billion for the reserve. Another £8 billion is not allocated against specific accounts. The reserve and unallocated funds give the Defense Ministry some flexibility to deal with cost increases without affecting other projects.
The funding level is spelled out in PR12 (the latest program review), in which Hammond says the ministry has brought into balance equipment plans and actual available funding after years of mismatches between the two. Balancing the books has been a priority for Hammond, who says the National Audit Office will get to review the claim that the budget is stable, including by looking at commercially sensitive information.
Hammond says the sustainable equipment program “gives industry the confidence to invest.”
The funding being set aside includes an extra £4 billion for intelligence, surveillance and reconnaissance projects (such as the Solomon and Crowsnest efforts) and £7 billion for complex weapons.upgrades are also to be funded, Hammond says, without giving details of which enhancements are due.
The budget will cover the planned acquisition of 14Chinooks and an eighth , as well as three RC-135 Rivet Joint signals intelligence aircraft (called AirSeeker). The purchases of military airlifters and Voyager air-to-air refuelers are also being backed.
On the helicopter front, Hammond says Wildcat buys are being funded, as are Merlin helicopter upgrades, studies to marinize the Merlin fleet, an Apache attack helicopter life extension to keep them going past 2025 and Puma upgrades.
Underpinning the road map is a plan to boost equipment spending from 2015 on by 1% in real terms. Research and technology support will not fall any further, Hammond vows.
Moreover, Hammond says he is looking for cultural acquisition changes and hopes to adopt some of the benefits of the urgent operational requirements process. The effort is being backed by plans to reform the Defense Equipment & Support organization, with an announcement due before the summer recess.