The reduction in troops in Afghanistan, the war funding, and the budget: Liam Fox is understood to be fighting to avoid new cuts to the Armed Forces by gaining permission to redirect the savings from the reduced force in Afghanistan into the core budget.
Last year, the mission cost an estimated £4.5 billion, up from £1.5 billion in 2007/08. A decade of operations in Afghanistan has cost 374 British lives and more than £14 billion.
The cost of military operations is funded from the Treasury Reserve, a central fund worth around £4 billion a year. As the Afghan operation winds down, the Treasury expects to reduce its payments to the MoD sharply.
But with the MoD still facing a huge financial shortfall, Whitehall officials are considering plans that would allow Dr Fox to make greater use of Reserve funds even as his immediate Afghan costs fall.
A Whitehall source said there was negotiation between the MoD and the Treasury about who meets the long-term costs of vehicles and equipment bought for Afghanistan.
Under current Treasury rules, reserve funding for such kit ends when it is withdrawn from the front line, but the MOD is trying to win support to get reserve funding for bringing part of the UORs into the core defence budget. Almost certainly, this would be done for the Reaper fleet, for the Warthog, and for Talisman. Some of the other vehicles, such as Husky, might not have a place in the future army. While there's pressure to continue with new orders of Foxhounds.
Liam Fox might have hopes of winning in the end, considering also that the Treasury still owes the MOD considerable funding for replenishment of stocks and other Operation Telic-related costs: Telic, and Herrick in its first years, were the true cause of the disaster in the defence budget, as the two wars were funded from the core budget of the ministry, causing constant delays in the modernization and procurement projects, which all but added to the long-term financial nightmare. Unless the Government is ready to - effectively - reopen the SDSR by cutting back things they have promised and announced barely months ago, some solution will have to be found to limit the disaster. The famous "three-months study" will hopefully make some clarity on the extent of the problem, and moreover on the solutions.
The MOD is unable to track 6.3 billions worth of kit: it is at least 14% of the value of its total stocks, so it is clearly worrisome. Great part of this "missing" kit is supposed to be around, used or stored somewhere, but the Ministry is currently unable to map the status of the equipment. It can only make even more evident that the efforts to digitalize the Logistics of the MOD are one of the less known but most important programmes to get right.
In this regard, the MOD has just ordered 12500 rugged encrypted tablet personal computers from Software Box Ltd. The £30 million ($48 million) five-year contract also includes maintenance support and forms part of the Joint Asset Management and Engineering Solutions (JAMES) project.
The Paveway IV is supported: Raytheon UK has been contracted for providing support to the Paveway IV bomb for the RAF for the next four years. Contract value is 10 million.
Typhoon updates: Turkey is being actively pursued as a possible partner and buyer, despite Turkey's stated intention of walking down the F35 path. However, rumors lately suggest that there might be a split buy of Typhoons and F35s both, to reduce the country's dependence from the US.
The Striker Head Mounted Display meanwhile is being delivered from BAE, with around 8 being delivered per month and already 50 available to the RAF, Luftwaffe, AMI and Spanish aviation. For the RAF, operational capability of the system is expected by the end of the year.
Meanwhile the Typhoon has been undergoing Meteor carriage trials, and integration of the Paveway IV is ongoing: the weapon will enter service on the Typhoon next year.
Meanwhile, Libya's had effects on RAF Typhoon training: the pilots are now being prepared for their Air to Ground role as well in OCU training, but since most of the Strike-ready crews of the fleet are instructors, and are all busy in Libya, training keeps being slow. The RAF reportedly has only 20 Typhoon pilots ready for ground attack missions.
The Hercules Force moves to Brize: Lyneham's future is expected to be set by the RAF Basing Review, which is expected before Parliament's Summer Recess, and so within 19 July. The Hercules move to Brize Norton is part of the plan to make Brize the single point of embarkation for UK military air transport duty. The Voyager air tankers will also be based in Brize. By 2022, with the C130J demise, the base will host the C17, the A400 Atlas and KC330 Voyager fleets. Brize Norton is, from already some time, also the base where casualties returning from the front touch the UK soil.
The first Voyager squadron: 10 RAF Squadron has been formally reformed, and will have its commissioning parade early next year as it becomes the first squadron of the air force flying the Voyager tanker acquired with the FSTA contract.
Meanwhile, after extensive ground trials, the Voyager is now flying AAR trials with RAF Tornado. It is also expected, sometime this month, that there will be an announcement about France buying hours from the FSTA fleet to help fill a gap as they delay their own acquisition of A330 tankers as part of their (far less brutal) defence cuts.
No gap, it's a promise: it has been announced in Parliament that the first upgraded and navalized Merlin HC3 will transfer to the Commando Helicopter Force in 2016, "in time to replace Sea King HC4". It was previously feared that there would a gap between the demise of the old King and the delivery of the new machines.
Vigilant floats: HMS Vigilant succesfully overcame floating tests, getting back into the water after more than two years. She's by now 80% done in her schedule for her Long Overhaul Period (Refuel) [LOP(R)]: it is the first (and last) of her career, and she the penultimate Vanguard class SSBN going through LOP(R): she'll be back at sea in 2012, and HMS Vengeance will have the honor of being the last Vanguard to refuel.
The LOP(R) gives the vessels propulsion and power for the whole rest of their service life, and in 2028 the first "Successor Submarine" is expected to replace HMS Vanguard, with at least two more boats to follow. A fourth submarine remains planned, but the requirement is not confirmed, as the MOD tries to value the risks and opportunities for running a fleet of 3 vessels and still achieve Continuous At Sea Deterrence (CASD).
The amphibious fleet turnarounds: HMS Illustrious is back from a 40 millions refit, and is facing sea trials prior to her taking on the role of High Readiness LPH of the fleet. She's planned to carry 20 helicopters and 600 Marines for the role, and she will replace Ocean. The Mighty O will go into Low Readiness in 2012, and then will enter refit. She'll be back in time to relieve HMS Illustrious in 2014, when Lusty will bow out.
HMS Ocean might have a very short career left by then, though, as lately there are suggestions that she'll bow out in 2016, once HMS Queen Elizabeth enters service.
HMS Ocean has seen its out of service date changed often: issues with her civilian-standard construction leaded to planning for a rather short life, but lately she saw her OSD indicated in 2018, and at one point she was expected to last until 2022. There's uncertainty on if (and how) she'll be replaced: in 2006 the RN Study LPH(Replacement) was put on hold, and possibly cancelled entirely during the SDSR, but the government has said it is committed to "a Carrier Strike and an LPH". This might be the second CVF, or a new built ship.
HMS Albion, currently deployed East of Suez, will be docked in Extended Readiness later this year, and her sister Bulwark will take on Flagship duty.
HMS Albion will be put into reserve with 2.5 millions spent to prepare her for the (possibly long) period of inactivity, and her projected cost per year will go down to 300.000 pounds. She'll be able to come back into service with limited preparation time, and will take turns with her sister Bulwark in and out of High Readiness role in the coming years.
The cost of the Rivers: the combined annual cost of the River patrols ships (owned by BVT and leased by the Navy) is 10.8 million pounds. 7.3 millions are for HMS Mersey, HMS Tyne and HMS Severn, active in UK waters for fishery protection and other tasks, while 3.5 millions are due to keep HMS Clyde active in the Falklands.
BATUK Upgrade under way: British Army Training Unit - Kenya remains important to the armed forces, and is seeing BATUK MAIN and the Battlegroup Forward Mounting Base relocating from their current
locations at Turako Farm and Nanyuki to a single site on Laikiapi Airbase (East), at a cost of 7 million. Work includes provvision of new, improved accommodations, and will be complete by April 2012.
HMS Diadem: it is not a 7th Type 45, but it looks like it: it is the Type 45 Ship’s Control Centre Simulator, gone live in HMS Sultan base, Gosport. The simulator for engineers, pictured above, is a series of nine rooms
connected in the same way as onboard, creating a realistic environment for sailors to practise and hone their skills.
There are around 18 different scenarios programmed into the system which simulates, in real time, the Type 45’s electric propulsion, generation, and auxiliary machinery.
The Type 45 and the pair of Lynxes: HMS Dauntless is undergoing her Hot Weather trials at sea off the US coast, and has two whole Lynx MK8 Flights on board, to trial their use and write the Class's manual for operations with an embarked flight of two helicopters. At some point, the Type 45 will also have to get ready for Merlin operations.
Meanwhile, HMS Daring has received its Phalanx 1B CIWS fit and prepares for her first deployment, east of Suez, which is drawing closer and closer.
More on HMS Protector: the new Antarctic patrol vessel is contracted for a 330 days-a-year availability. Length: 89.7m.
• Speed: 15 knots (maximum)/12 knots (cruising).
• Un-refuelled range: 9,000 nautical miles or 60 days at 12 knots.
• Complement – 15 officers/23 warrant officers and senior rates/50 junior
rates and Royal Marines.
• The ship is contracted to be available for operations 330 days a year.
BS074 is Typhoon number 100 for the UK: DE&S has taken delivery from Warton of the UK Typhoon number 100, with 60 more to come, mostly of the Tranche 3A.
Terms of Business Agreement (TOBA) for Shipbuilding are delivering: Terms of Business Agreements
(ToBAs) – robust and approved by the Investment Approvals Board – were signed with BAE Systems Surface Ships and Babcock Marine and Technology in 2009 and 2010 respectively. They are an integral
part of DE&S’ Maritime Change Programme (MCP). The agreement sets guaranteed minimum benefits of £350 million, with an aim to at least double this over the 15 years of the ToBA. Through joint work, BAE Systems and DE&S have already exceeded annual targets for the first two years and are on track to deliver against minimum benefit levels over the contract term. Firm agreements are essential to ensure the success of future programmes such as that for the Type 26 Global Combat Ship, for which we don't want to see cost and time escalation.
Maintenance of the Royal Navy’s surface fleet and submarine flotilla now has a 15-year
programme under DE&S’ ToBA with Babcock as well, which is flexible to adapt to the ever changing
needs of the Royal Navy.
The 300-page agreement provides the framework on which the company receives work from DE&S on surface ships, submarines and naval bases. Babcock will receive work from DE&S under an agreed price, cost and incentive regime on a non-competitive basis. In return Babcock guarantees benefits, agrees
to continue developing its close relationship with DE&S, rationalises its business and pledges continuous improvement.
That, in turn, leads to opportunities for business growth and greater profit. Included in the pledges are up to £1.2 billion of financial benefits to DE&S over the life of the arrangement, with Babcock reducing its cost base. It’s a vital promise at a time when money for defence is evermore scarce. The contract has been showing results with several major refits on Type 23s, HMS Bulwark and HMS Illustrious being completed on time and within budget.
DE&S's Journal, July: http://www.mod.uk/NR/rdonlyres/8B47EC98-DEF3-4543-ABDF-AD4196E08F3C/0/20110704desider38_julyv1_3U.pdf