Report by the Commons Select Defence Committee

Defence Committee - Sixth Report

The Strategic Defence and Security Review and the National Security Strategy The full report can be read at:

http://www.publications.parliament.uk/pa/cm201012/cmselect/cmdfence/761/76102.htm

For the benefit of readers the Conclusions and Recommendations are shown here in full.

Conclusions and Recommendations

Introduction

1. At the outset, we wish to pay tribute to the UK Armed Forces and associated civilian staff. They have continued to serve their country with distinction and dedication, especially operationally in Afghanistan, Libya and elsewhere, during an unsettling period of a major defence review and the major reform and restructuring of the Ministry of Defence. (Paragraph 8)

National Security Council

2. We repeat our welcome for the establishment of the National Security Council and its taking the strategic lead for defence and security issues. It must continue its work to break down the silo-mentality and departmental rivalry in Whitehall. We recommend that the Government, when responding to this Report, should identify appropriate areas for interdepartmental budgeting while maintaining proper accountability and not increasing levels of bureaucracy. The Government should provide us with further information on how it envisages the role of the NSC in terms of the prioritisation and allocation of resources. (Paragraph 21)

3. The NSC was, in our opinion, right to prioritise operations in Afghanistan. But we are concerned that the NSC did not appreciate the complexities of defence and security issues and had to undergo a steep learning curve. As a result we are not convinced that the NSC provided, at an early enough stage, the guidance and input that were necessary for formulating the SDSR, particularly given a truncated review period running alongside the Comprehensive Spending Review. We note that the next SDSR is due to be held shortly after the General Election in 2015. We recommend that steps should be taken to ensure that the lessons learned by the NSC and its secretariat are not lost. (Paragraph 27)

4. We do not propose the Government should establish a separate Department for National Security. This would be a major change, particularly when UK Armed Forces are committed on two major operations and given the current economic situation. However this should be kept under review as part of a continuous assessment of the effectiveness of the NSC, particularly as new and unexpected threats emerge. (Paragraph 30)

5. We welcome the appointment of a National Security Adviser as a major advance. However we believe that a dedicated, powerful and independent long-term voice for national security should exist within Government and recommend that the Prime Minister appoint a National Security Minister, separate from the Home Office, to act as National Security Adviser with a seat on the National Security Council. (Paragraph 34)

6. We recommend that the NSC secretariat be given the resources to undertake its own analysis and commission research, with appropriate precautions put in place to avoid duplication of work already being undertaken by individual Government Departments and increased bureaucracy. (Paragraph 37)

7. We agree with the separation of responsibilities and roles between the NSC and COBR in respect of emergencies and recommend that measures be put in place to guard against any blurring of this in future. (Paragraph 39)

8. We note the Government's commitment to an annual report of progress of implementation of the SDSR and NSS for scrutiny by the Joint Committee on the National Security Strategy (JCNSS). We request more information on the format and status of this report. We will also continue to undertake scrutiny of the implementation of the NSS and SDSR. We also recommend that an annual debate should be held on the annual report on progress of implementation of the NSS and SDSR. This should be in Government time and held in the main House of Commons Chamber. (Paragraph 42)

9. We recognise the willingness of ministerial members of the National Security Council and the National Security Adviser to appear before select committees, other than the JCNSS, and expect this to continue. We also expect the Government to explore with the JCNSS and other parliamentary committees ways of improving the National Security Council's accountability and transparency. (Paragraph 43)

National Security Strategy

10. We commend the Prime Minister's initiative of inviting the Leader of the Opposition to attend the NSC. We hope that such invitations will become more frequent and that the Leader of the Opposition will accept them. (Paragraph 45)

11. We acknowledge that reduction of the budget deficit is the Government's strategic priority and that not to do so would have implications for maintaining the nation's security. It is not for us to discuss in this Report measures used to reduce the deficit although we have views on the effect on the defence budget. (Paragraph 54)

12. We note the declared aspiration of the NSC that Britain's national interest requires the rejection of any notion of the shrinkage of UK influence. We acknowledge that influence should not only be measured in military hardware or even military capability. However, given the Government's declared priority of deficit reduction we conclude that a period of strategic shrinkage is inevitable. The Government appears to believe that the UK can maintain its influence while reducing spending, not just in the area of defence but also at the Foreign Office. We do not agree. If the UK's influence in the world is to be maintained, the Government must demonstrate in a clear and convincing way that these reductions have been offset by identifiable improvements elsewhere rather than imprecise assertions of an increased reliance on diplomacy and 'soft power'. If the Government cannot do so, the National Security Strategy is in danger of becoming a 'wish list' that fails to make the hard choices necessary to ensure the nation's security. (Paragraph 64)

13. If the UK's influence in the world is to be maintained, we are concerned that the impact of defence cuts on the UK's defence commitments and role within NATO and other strategic alliances does not appear to have been fully addressed. UK defence does not operate in a vacuum and decisions taken in the UK have repercussions for the spending commitments and strategic posture of allies and alliances. (Paragraph 65)

14. We dispute the Prime Minister's assertion that the UK has a full spectrum defence capability. We note that this view has been rejected by the single Service Chiefs. Indeed the Armed Forces Minister acknowledged that the UK has not had a full spectrum capability for many years, speaking instead of delivering a wide spectrum of military capabilities in the future. We remain to be convinced that this aspiration can be achieved. We also have serious concerns about whether a full spectrum defence capability can be maintained by co-operation with our allies given the challenges of aligning political with operational needs. (Paragraph 66)

15. We note the Government's assertion that the NSS is the ends and the SDSR is the ways and means in terms of the delivery of national strategy. However when developing the NSS in future years, the Government should identify with greater clarity the resources required and available to achieve the desired outcomes within the framework of the national security tasks. This analysis would enable the SDSR to take informed resourcing decisions. (Paragraph 74)

16. We commend the Government on the recognition of newly acknowledged threats, such as cyber crime, in the NSS. It is important that the right risks are identified and resources prioritised accordingly. (Paragraph 79)

17. We agree that the NSRA should be formally updated every two years but this must not be at the expense of being able to adapt the National Security Strategy to meet new threats or changing situations. We recommend that the NSC should keep the NSRA methodology under review and consider adapting it to take account of longer term risks in line with the commitment to an adaptable posture. (Paragraph 80)

18. We support the Government's adoption of an 'adaptable posture'. Given that the nature of security threats are becoming more global, less predictable and less visible it is vital to maintain a strong pool of resources on which we can draw in order to provide the capability to adapt to changing situations. We reject any notion that the UK can just retreat and defend its borders and those of its overseas territories. However there needs to be a full assessment of what the 'adaptable posture' will cost; defining the future state without attaching an accurate assessment of the resources required undermines the authority of the Government's intentions. (Paragraph 83)

Strategic Defence and Security Review

19. We commend the Government on the principle of their stated intention of regular SDSRs every five years. A gap of 12 years between reviews should never be allowed to occur again. However we have concerns that future SDSRs will therefore be tied too closely to the electoral cycle and call on the Government to explore ways of breaking this link. Whilst welcoming the widening of the scope of the review to include security issues, we repeat the concern expressed in our earlier Report on the SDSR process that there is some risk of dilution of the defence contribution due to possible immediate or short term threats which may dominate the agenda to the exclusion of long-term defence assessments by the MoD. (Paragraph 85)

20. We agree with the Government's statement in the SDSR that Afghanistan remains the top priority. We shall continue to monitor the Government's pledge that operations there will be properly resourced, funded and equipped. We note that since publication of the SDSR UK Armed Forces have been committed to operations in Libya. We will monitor this operation closely and will be conducting an inquiry into Operations in Libya in October 2011. (Paragraph 86)

21. While we acknowledge that the Defence Planning Assumptions in the SDSR serve as a planning tool rather than a set of fixed operational plans or a prediction of precise operations that will be undertaken, we are concerned that as currently applied they suggest that UK Armed Forces will be continually operating at the maximum level envisaged by the Assumptions. This has serious implications. The Government should ensure that sufficient contingency is retained to deal with the unexpected. It is not sufficient to wait for the end of combat operations in Afghanistan at the end of 2014. (Paragraph 98)

22. We note the Government's intention to "confront the legacy of overstretch" citing the operations in Iraq and Afghanistan from 2006-09 as examples. The new Defence Planning Assumptions in the SDSR suggest that in future the Armed Forces would not be asked to undertake operations of a similar nature to Iraq and Afghanistan simultaneously. The Government should indicate if this is the case in their response to this Report. (Paragraph 99)

23. When committing to undertake new operations, such as Libya, the Government should state from the outset where that operation fits in the Defence Planning Assumptions and which of the military tasks it is meeting. This should not be limited to the numbers of Armed Forces personnel required, but also the capabilities that will be deployed and the consequences that this may have for other operations or wider defence-related matters, such as the defence budget and defence industry priorities. We can only conclude that the Government has postponed the sensible aspiration of bringing commitments and resources into line, in that it has taken on the new commitment of Libya while reducing the resources available to the MoD. (Paragraph 100)

24. We believe that for an aircraft carrier to be held in a state of extended readiness it must be fitted with catapults and arrestor gear. (Paragraph 109)

25. We expect the MoD to publish its work programme and final requirements for the conversion of the carriers and JSF by the end of 2012. (Paragraph 112)

26. We acknowledge the major contribution of the Harrier Force to the Armed Forces and to the security of the UK. We regret that it has been removed from service. We acknowledge the many pieces of evidence that called for the reintroduction of the Harrier Force. However we agree with our witnesses who stated that it is too late to do so due to the cost, industry losing the relevant personnel and the pilots being redeployed. We call on the Government to ensure that the best deal possible is achieved in the disposal of the Harrier fleet and expect the Government to provide us with full details as soon as any agreement is reached. (Paragraph 120)

27. We support the decision to proceed with both the Queen Elizabeth class carriers and to develop the JSF carrier strike capability. We share the concerns of allies regarding the lifetime costs of the JSF. We expect the MoD to take action to ensure that the costs are controlled and to update us on this work on a regular basis. We note that the MoD is currently developing a plan for the regeneration of this capability and expect to have a sight of it at an early stage. The scale of the challenge the Ministry of Defence faces in generating the complex network of skills involved in flying fast jets from carriers in a manner not undertaken by the UK for many years is so great that this plan needs to be subjected to robust scrutiny both in Parliament and elsewhere. The plan must provide clarity of the steps being taken, specific milestones and dates and what funding is required and whether it is in place. We also note concerns regarding the future use of the second carrier and call on the Government to keep us informed of its plans as they progress. (Paragraph 126)

28. We deeply regret the decision to dispense with the Nimrod MRA4 and have serious concerns regarding the capability gaps this has created in the ability to undertake the military tasks envisaged in the SDSR. This appears to be a clear example of the need to make large savings overriding the strategic security of the UK and the capability requirements of the Armed Forces. We are not convinced that UK Armed Forces can manage this capability gap within existing resources. We call on the Government to outline its plans to manage the gap left by the loss of this capability, including the possible use of unmanned vehicles and collaboration with allies. In addition, the Government should outline its plans for the regeneration of this capability, including the skills and knowledge required to provide it. (Paragraph 137)

29. We are conscious of the uncertainty that the basing review has created for Service personnel, their families, local communities and businesses. We will monitor the outcomes of the review. We call on the Government to outline its proposals to assist the Service personnel, families and communities affected at an early stage in line with the obligations outlined in the Armed Forces Covenant. (Paragraph 151)

30. We note the MoD's update on 18 July 2011 of the plans for the withdrawal of UK Forces from Germany. However, given that half of UK Forces are due to return by 2015, we are concerned that the plans are not further advanced. We note that the required two years notice has not been given to the German authorities. We call on the Government to set out with clarity the costs and benefits of this project in terms of providing accommodation, infrastructure and training facilities which are already available to the United Kingdom in Germany. The MoD should provide us with a full implementation plan, its funding and method of attaining the stated goals, at the earliest opportunity and deliver clear communication of these plans for Service personnel, their families, local communities and businesses. The elements of the SDSR are interlinked and failure in one area may mean failure elsewhere. (Paragraph 152)

31. We expect to be regularly updated on these plans. We are concerned about the future of defence technical training and request an early statement on how it is to be taken forward and will continue to monitor this vital aspect of defence reform. (Paragraph 154)

32. We welcome the Government's commitment to the reform of the Reserve Forces and the investment of £1.5 billion over the next 10 years. However we wish to see more detail on the planning and timing of the shift towards greater reliance on Reserve Forces. (Paragraph 161)

33. The Committee notes the conclusions and recommendations of the Independent Commission's Report, in particular that the internal governance process should be administered by a Board, chaired by the Vice Chief of the Defence Staff. We particularly note the recommendation that the Council of Reserve Forces and Cadets Associations should report annually to Parliament on progress in implementing the recommendations of the Review. (Paragraph 162)

34. We note the observation in the Future Reserves 2020 Report that the costings on the manpower element of the defence budget, amounting to one-third of the total, need further work. We endorse the study's recommendation that detailed costing of Regular and Reserve units be prepared. (Paragraph 170)

35. We are not convinced, given the current financial climate and the drawdown of capabilities arising from the SDSR, that from 2015 the Armed Forces will maintain the capability to undertake all that is being asked of them. We note that there is mounting concern that the UK Armed Forces may be falling below the minimum utility required to deliver the commitments that they are currently being tasked to carry out let alone the tasks they are likely to face between 2015 to 2020 when it is acknowledged that there will be capability gaps. (Paragraph 171)

36. We are concerned that, on the one hand, Future Force 2020 seems to be regarded as a "wide spectrum" force able to undertake the security tasks required by the adaptable posture envisaged by the NSS while at the same time being regarded as the "critical mass" of the Armed Forces with some spare capacity that may be achieved by the establishment of alliances and bilateral operations. (Paragraph 172)

37. We recommend that the MoD should develop further the concept of a "critical mass" for the Armed Forces and establish a clearer measurable statement of what constitutes "critical mass" to allow verification and monitoring by Parliament. This should include not just the roles and structures of Regular and Reserve Forces but should be expanded to encompass enablers such as DSTL, industry, academia, the scientific and research community and the development of the defence knowledge base especially amongst the military and civil servants. (Paragraph 173)

38. We note the outcome of the Government's three month review of the SDSR. We acknowledge the planned 1% real terms increase in the defence equipment and equipment support budget between 2015-16 and 2020-21. However we note that this is based on a number of adjustments to the Defence programme, including rationalising vehicle acquisition and continuing efficiency savings from non-front-line costs. Although we welcome the additional certainty that this will bring in respect of the defence equipment and equipment support budget, we are concerned that this increase is simply a reallocation of resources and does not represent the real terms increase in funding required to deliver Future Force 2020. In its response to this Report, the Government should also set out in much greater detail the baseline for the calculation of the 1% real terms increase in the defence equipment and defence support budget and the savings that will be made to realise it. (Paragraph 186)

39. We are concerned at the lack of information in the SDSR on the levels of funding required to deliver Future Force 2020 and the increase in defence spending that this would represent. The Government should provide an estimate of these in its response to this Report and the figures should be updated in the annual updates on implementation of the SDSR. We regard defence planning and procurement as being of a unique nature, particularly given the long timescales associated with it, and recommend that the Government should initiate ways of allowing the MoD to proceed with implementing Future Force 2020 with budgetary certainty outside the normal CSR timetable. (Paragraph 187)

40. We share witnesses' concerns that there are serious risks if Future Force 2020 is not achieved. A failure to achieve Future Force 2020 would represent a fall below "critical mass" and a reduction in the influence that the NSS and SDSR set out as desirable. We fully support the Prime Minister and the Secretary of State for Defence in their personal aspirations for real terms increases in defence funding from 2015 that will enable the commitments made in the SDSR for Future Force 2020 to be realised. However this is meaningless without a concrete commitment that these increases will be delivered. Decisions for post 2015 funding will have to be made in the very near future to ensure progress towards Future Force 2020. If the ambition of a real term funding increase is not realised, we will have failed our Armed Forces. (Paragraph 188)

41. We note that a real terms increase in defence funding from 2015 will coincide with the withdrawal from a combat role in Afghanistan and anticipate that the UK public, whilst being passionate in their support for the Armed Forces, will question this decision. The Government must ensure that the reasons for the increase are effectively communicated to the public. This should begin now. (Paragraph 190)

Ministry of Defence Budget

42. We agree with our predecessor Committee that the scale and nature of MoD contracts is quantitatively and qualitatively different from other Government procurement and its assertion that greater financial stability could help to control and reduce the hundreds of millions of pounds of unproductive costs which are incurred annually to keep the equipment programme spend within each year's budget. We recommend that the MoD and the Treasury should establish mechanisms for a ten year budget for the MoD. It is vital that the MoD has greater certainty of resources as it plans to implement Future Force 2020 which is essential to the nation's security in an ever-changing world. (Paragraph 197)

43. We were disappointed by the MoD's response to our requests for a breakdown of the MoD's financial commitments, including details of the components of its estimate of a £38 billion gap in the defence programme and the size of any remaining budget gap after the SDSR. We note that the MoD now state the genuine size of the gap is substantially in excess of £38 billion. However, we also note the Secretary of State's assertion that the "for the first time in a generation, the MoD will have brought its plans and budget broadly into balance, allowing it to plan with confidence for the delivery of the future equipment programme". Without proper detailed figures neither statement can be verified. Given the difficulties the MoD has had in responding to our requests for a breakdown of the over-commitment in the MoD budget, we expect the Government in its response to this Report to set out in detail the basis for these statements. (Paragraph 204)

44. We note the Secretary of State for Defence's commitment to carry out an assessment of the affordability of the equipment programme alongside an independent audit by the NAO. We are surprised that this assessment has not yet begun and expect to receive a timetable for this exercise in response to this Report. (Paragraph 205)

45. We welcome the establishment of the Major Projects Review Board. The Board faces a major challenge and we will monitor its effectiveness in ensuring the MoD's programmes are on time and within budget. We recommend that the MoD consider the appointment of suitably experienced independent members to the Board. (Paragraph 207)

46. We welcome the empowering of the single Service Chiefs, but are concerned that removing them from the Defence Board may result in an increase in the tensions between the three Services and encourage individual Service Chiefs to fight for their particular Service without consideration of overall defence requirements. It means that the Chief of Defence Staff will be the only Service representative on the Board, and could in turn leave them open to accusations of favouritism of their "home" Service over the others, whether justified or not. We intend to return to the command, control and accountability processes between the Chiefs of Staff in future inquiries. We will monitor the impact of this and the other reforms recommended by the DRU over the coming months as they are implemented. In addition we look forward to seeing in the near future greater detail from the MoD as to the budgetary implications of the changes being made. (Paragraph 211)

47. We recognise the pace and quantity of change occurring within the MoD is considerable and understand how disconcerting this has been for the Armed Forces and MoD civil servants, particularly at a time when UK Armed Forces are conducting two major campaigns in Afghanistan and Libya. While we recognise that reform of the MoD is long overdue, change on this scale requires exceptionally careful management. In response to this Report we require that the MoD inform us of how it will ensure that reform is not derailed by the speed of its implementation. We note the recent publication of the Defence Reform Unit Report and will monitor the implementation of its recommendations. The MoD should provide updates on work to implement the recommendations in its Annual Report. (Paragraph 212)

Conclusions

48. During our inquiry we sought to establish whether the new national security thinking and structures, under the leadership of the National Security Council, had led to a more coherent and well defined security policy in terms of the ends of the National Security Strategy and the ways and means set out in the Strategic Defence and Security Review. We agree with the Government that the operation in Afghanistan was the top priority during the development of the NSS and SDSR. Operations in Libya must also be prioritised. (Paragraph 213)

49. We welcome the establishment of the National Security Council and the commitment to an updated NSS and SDSR every five years. The changing character of the threats facing the nation required a more collective response from Government. The previous culture of departmental-silos and turf wars needed reform. However more reform is still required, such as the development of the role of the National Security Adviser, the capacity of the National Security Council Secretariat and greater use of interdepartmental budgeting arrangements. The National Security Council must also ensure that the UK's Armed Forces and the general public are seized of the aims and objectives of its security policy and increased engagement by the Government is essential to achieve this. The National Security Council should develop a uniform vocabulary for strategic thinking across Government. Strategy is understood in many different ways across Government and the military and too often the message and intent becomes blurred. (Paragraph 214)

50. The latest National Security Strategy is an improvement on earlier versions but we have major concerns regarding the realism of its statement of the UK's position in the world and its influence. There is a clear contradiction in the short to medium term between the NSC's statement "that Britain's national interest requires the rejection of any notion of the shrinkage of UK influence in the world" and the Government's overriding strategic aim of reducing the UK's budget deficit. Despite the stated intention of rejecting any notion of the shrinkage of influence, our witnesses have forcefully told us that the UK's global influence is shrinking. Future National Security Strategies must have as their starting point a policy baseline that is a realistic understanding of the world and the UK's role and status in it. That said, the UK has demonstrated, and continues to do so across the world, that it has a major role to play in global affairs. (Paragraph 215)

51. The UK's national ambition must be matched and constrained by a realistic assessment of the resources available to achieve it. The adaptable posture advocated in the current National Security Strategy is a good starting point, but must not become a hostage to fortune requiring the UK to participate in the resolution of every global security challenge. This policy baseline must be available at an early stage to ensure that the correct decisions are made in the subsequent Strategic Defence and Security Review in terms of force structures and capability and platform decisions. (Paragraph 216)

52. We acknowledge that it was necessary to undertake the SDSR alongside the CSR. This resulted in a better financial settlement for the MoD than might have been realised if the two processes had been separated. However, given the speed of the review we are not convinced that the best use was made of experts from outside the Department. (Paragraph 217)

53. Our Report outlines some major concerns regarding the capability decisions made in the current Strategic Defence and Security Review. The starting point for capability decisions in future SDSRs should continue to be a consideration of what "sovereign" capabilities are required. The SDSR identified seven military tasks and the Defence Planning Assumptions that underpin them. However it does not set out how capability decisions such as those on Carrier strike and Nimrod MRA4 ensure that the Armed Forces are able to undertake the military tasks. In addition, the measures to be taken to cover the risks that capability gaps engender need to be developed—it is not sufficient to rely on old and new alliances although these are valuable. When capability gaps occur, concrete plans should be developed to regenerate the capability, including the necessary skills amongst Service personnel. We hope that the plans to redevelop the carrier and carrier strike capability might serve as a model for the future. (Paragraph 218)

54. The biggest challenge arising from the SDSR and the next SDSR is the realisation of Future Force 2020. We have serious concerns about whether it will be achieved, particularly as the provision of necessary resources is only a Government aspiration, not Government policy. Given the uniqueness of MoD procurement we regard it as essential that the MoD has more certainty in its long-term planning and recommend that ten-year budgeting be introduced. This would also give the MoD greater confidence in the decisions it takes in future SDSRs. However, as part of this, the MoD must reform, and ensure substantially improved transparency and control over its finance and budgetary practices. Without this it is extremely difficult for the MoD to argue for additional resources. While we welcome the Government's new initiatives on value for money such as the Major Projects Review Board, we are not confident that given the reductions in the MoD budget and the continual reassessment and uncertainty in forward financial planning the UK Armed Forces will be able to reach Future Force 2020. (Paragraph 219)

55. The SDSR was unfinished business. It has been supplemented by a three month review and by further reports on the structure and senior management of the MoD, on the balance of Regular and Reserve Forces, on equipment, support, and technology for UK defence and security and the basing review. In the light of these changes it appears to us that despite statements to the contrary the SDSR has to all intent and purpose been re-opened and it has been done without the re-opening of the Comprehensive Spending Review. We will monitor events to ensure a coherent plan providing UK national security. (Paragraph 220)

56. Finally, we repeat our admiration for the Armed Forces and the civilians who support them. We must ensure that the implementation of the current SDSR and future SDSRs does not fail them. (Paragraph 221)