The 2021 Defence Review: Empty Promises for UK Industry

Fabians' Defence & Security
8 min readMay 16, 2021

Execution remains the key flaw that will bring down the “strategic realignment” justifying heavy cuts to British armed forces

Over the course of a week in March the Government published a suite of publications that, for better or worse, are set to redefine the role of the UK armed forces for a generation. The headlines have been rightly dominated by cuts to troop numbers and the early retirement of ships, tanks and jets. The review also promises a re-evaluation of the MOD’s relationship with the UK’s domestic defence industry, something many consider long overdue. But will the results live up to the promise?

Ollie Welch is a senior public affairs adviser who has held senior posts at several high-profile UK policy organisations, including the MoD. He holds a particular interest in defence and security.

FIGHTING WARS IN THE 21st CENTURY

When the Government launched its five-yearly defence review last year, the ambition was for this to be part of a much broader reset of the UK’s international policy, the largest since the end of the Cold War. Nevertheless, as the scale of the COVID pandemic became apparent, many predicted that it would preclude another opportunity for a much-needed reappraisal of defence posture.

Confounding such pessimism, the Integrated Review of Security, Defence, Development and Foreign Policy was published on 16th March, followed closely by two more detailed policy papers, ‘Defence in a Competitive Age’ and the Defence and Security Industrial Strategy. Few will accuse the Government being short of blind ambition, but the perennial question for all defence reviews seems even more pertinent this time: is this really a strategically and financially coherent plan?

The message that Boris Johnson wants to convey is that together these publications mark a generational shift in defence capability; a review that will ensure that the armed forces remain ‘Tier One’ for the rest of the decade and well beyond. The promise is a strategic shift in investment to favour emergent technologies and the review positively brims with references to revolutionary future capabilities built on artificial intelligence, robotics, and autonomy.

The anticipated benefits of this new emphasis on technology don’t stop with the war fighter. The Government envisages knock-on effects in the domestic economy as defence spending provides the platform for UK industry to expand, diversify and — above all — beat Silicon Valley in the technological race to turn R&D into profitable enterprise. Such a reprioritisation was a central tenet of Dominic Cummings’ world view. The adviser may have departed, but his legacy lives on.

This betrays a reality that turning aspiration into operational effectiveness demands sustained commitment and investment over many years. That simply isn’t promised here. Sceptics might reasonably accuse the Government of masking the painful reality of swingeing defence cuts with real world implications today with a ‘jam tomorrow’ oratory based more in fantasy than reality.

IT’S THE (DEFENCE) ECONOMY, STUPID

Defence reviews are ultimately judged in hindsight. The previous two defence reviews, in 2010 and 2015, both quickly succumbed to painful budgetary reality. Thus, it is of little surprise that scepticism prevails unless and until promises are translated into tangible outcomes. The usual welcoming words from the defence industry — for whom the Government is foremost a customer — nevertheless bely a commercial concern to carefully evaluate the realism of the MOD’s plan in order to best safeguard investments from future policy and fiscal divergences.

The failure of the 2015 Strategic Defence and Security Review to live up to its promises thus looms large over its 2021 successor. For more than a year, defence Secretary Ben Wallace has spearheaded a multifaceted campaign to secure a credible financial settlement for the MOD, while simultaneously repeating in public his warnings to military planners about the danger of eyes bigger than stomachs.

Wallace thus deserves credit for securing a four-year budget for his department in the face of scepticism from the Treasury. Certainly, the £16.5bn budget injection in November drew envious glances from other cabinet ministers faced once more with punishing austerity to pay for the Government’s many missteps during the Covid-19 pandemic.

However, such largesse is relative. Indeed, what new money has been made available to defence represents the bare minimum that the Armed Forces’ believed they needed at the outset of the review process. Indeed, thanks to Conservative mismanagement it stretches no further than the estimated £17bn blackhole in the current 10-year equipment plan. The implication is clear; the price of a ideological shift in political priorities will be that the Royal Navy, the Army, and the Royal Air Force will all be in the firing line and must surrender some of their existing capability in order to fund anything new.

MIND THE CAPABILITY GAP

Whether you conclude that the removal of certain military capabilities is the necessary result of strategic realignment or the prioritisation of parsimony over security probably depends on how cynical you are. What can’t be denied is that ‘cutting your cloth accordingly’ — as Wallace has been want to put it — has required our military chiefs to accept suboptimal outcomes in some areas to fund priorities elsewhere.

The result is new capability gaps that violate previously sacrosanct commitments. Some of these will be temporary; the early decommissioning of two Type 23 frigates will mean that the Royal Navy’s fleet will soon be reduced to 17 surface combatants — and possibly sink as low as 15 — before new capabilities are introduced. This despite the longstanding guarantee that the number would never drop below 19. It is not clear what, strategically, has changed.

Not until 2027 will we see the first of two new classes of frigate, the Type 26 and Type 31. Given that both of these programmes have already been subject to multiple delays (2018’s National Shipbuilding Strategy promised in-service date of 2023), expect resigned shrugs to be the likely response of many a sceptical sailor, particularly with regard to a promised fleet strength of 24 by the early 2030s.

At least the Navy has a glimmer of light at the end of the tunnel. The Army, already denuded in number by the review, will see its fleet of Warrior armoured vehicles retired early without ever receiving its long anticipated — and already hugely expensive — life extension. Bringing forward the purchase of Boxer, a new infantry vehicle, offers soldiers’ little succour. Though undoubtedly capable in its own right, this is hardly a comparable capability and was always intended to serve alongside rather than replace Warrior.

The equally long-awaited upgrade of the Army’s main tank, Challenger 2, has also been hollowed out. Just 148 of the 227-strong fleet will go through the re-christened ‘Challenger-3’ upgrade. Though individually this offers a much-needed capability lift, the question of critical mass is legitimate; the ability to hold a battlefield still has a dependency on raw numbers. Lest we forget that the 2010 Review near-halved the fleet size a decade ago alongside the same promised upgrade that has failed to materialise.

As for air capability, there has never been much confidence in the unrealistic ambition to buy 138 F-35 jets, a target established in 2010 and reaffirmed in 2015. Yet at least it offered the promise of a sustainable fleet. In 2021 any commitment to future fleet size is notable only by its absence. The mere ‘intent’ to grow the fleet beyond the 48 jets already on order rings hollow in comparison.

While it is debatable what that number should total, concerns that it may never reach enough to fully compliment both Royal Navy’s aircraft carriers, let alone service the RAF’s requirements, are widely held.

IT AIN’T WHAT YOU BUY, IT’S THE WAY THAT YOU BUY IT

Nevertheless, if we accept that these cuts are necessary strategic decisions, then it at least arrives alongside policy commitments designed to encourage UK industry. The re-gearing of MOD procurement practices to protect domestic industrial capability is a call that has been long led by the Labour Party. This is not only good for the economy and jobs, it is good for the armed forces too, a recognition that domestic industrial capacity is a vital guarantor of national security.

Yet should we accept that, with the stroke of pen, the Tory’s decade-old policy of defaulting to procurement through international competition is over? ‘Strategic Imperatives’ and ‘Operational Independence’ are the new instruments that will be used to determining whether the UK’s industrial assets are so fundamental to defence output that they must be protected and nurtured, and whether offshoring might impair the UK’s ability to conduct military operations. All well and good.

However, whether policy reform will lead to practical change remains to be seen. Certainly the Government’s track record isn’t good. There is enough flexibility in these new definitions to provide MOD with considerable leeway to buy from abroad if the view is that suits narrow and short-term departmental interests. Indeed, the now redundant concepts of ‘Operational Advantage’ and ‘Freedom of Action’ were, arguably, not so dissimilar to those that have replaced them; perhaps not in themselves flawed, just never applied assiduously enough by a Government that proved itself ready to trade long-term interests for short-term budget fixes, themselves bought on by austerity.

The irony that this all arrives as the Government otherwise unwinds the concept of industrial strategy might well serve as a warning. What chance that allowances will really be made in the MOD’s commercial processes in order to preference tenders that locate jobs, skills, intellectual property, and industrial capacity within the UK supply chain. It is incumbent on Labour to hold the Government to account and demand an equipment plan that really can be categorised as ‘investing for growth’?

ONLY DELIVERY COUNTS IN THE END

This is a review that promises much but delivers little. Difficult capability decisions have been across all three of the armed services and the losers will be left feeling bruised. Of course, few can argue against strategic reprioritisation, provided that it is accounted for by a credible strategy that ultimately leaves the country more secure. However, the pathways to such sunny uplands rarely run smooth and the flaws in this defence review points to a familiar process of unwinding as quickly as it was written.

If this really is a long-term plan that the Government intends to honour, then it deserves long-term commitment. However, the MoD is unlikely to be free of near-term budgetary headaches and Labour must hold the Government to account for any knee-jerk return to short-sighted decision-making. The risk of this is high as ministers seek to muzzle financial issues before they turn political and diverting money from strategic priorities towards temporary fixes. The inevitable result is that this will only lead to same questions having to be asked again in five years’ time.

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Fabians' Defence & Security

Defence & Security arm of the Fabian Society, commenting on UK defence and national security policy.