Centre for British Defence and Security Studies
As we entered 2017 the Ministry of Defence earmarked 2017 as the ‘year of the Royal Navy (RN)’. In the press release that accompanied the announcement key milestones for 2017 were highlighted, including the new aircraft carrier HMS Queen Elizabeth leaving Rosyth and commencing sea trials, the launch of her sister ship HMS Prince of Wales and the fourth Astute-class SSN, the arrival in the UK of the first of four new Tide-class tankers and the opening of the first permanent RN base East of Suez in more than half a century.
This built on the government’s 2015 National Security Strategy and Strategic Defence and Security Review (NSS/SDSR pp.30-1). As part of Joint Force 2025, the RN would continue to maintain the continuous at sea deterrent with four new nuclear powered ballistic missile submarines. The NSS/SDSR also pledged to bring into service both of the large aircraft carriers currently under construction in order to have ‘one available at all times’. The government also promised to bring forward the purchase of F-35B Lightning II aircraft so that there would be 24 aircraft available by 2023. Looking further ahead, the 2015 review committed the government to buy three new logistic ships to support the fleet, in addition to the four tankers that were due to have entered service from 2016. The government also confirmed that a fleet of 19 destroyers and frigates would be maintained with the hope that ‘by the 2030s we can further increase the total number of frigates and destroyers’ (NSS/SDSR pp.30-1).
Since then, the Defence Secretary, Sir Michael Fallon, has confirmed ‘… that the expansion of the Royal Navy is fully funded’ (Oral Questions on defence 30 January 2017). Yet, behind this rosy façade, however, is a somewhat different picture. In the second half of 2016 the financial pressure on the RN’s budget had become evident. Over the summer, technical problems with the Type 45 destroyer’s power plant emerged leading to all the ships being temporarily moored alongside. In November 2016, it emerged that the Harpoon anti-ship missile would leave service in 2018 without a replacement in the near term rendering RN ships reliant on their deck guns until the Wildcat helicopters are equipped with an air to surface missile. Since Christmas the government has been plagued by revelations concerning the test of one of its Trident missiles last June.
Looking behind the veneer of the 2015 NSS/SDSR a whole series of other cutbacks are evident. The Landing Pad Helicopter (LPH) HMS Ocean is scheduled to leave service in 2018 without replacement. Instead, the second aircraft carrier will be equipped with some amphibious capability. The obvious question this raises is what happens if HMS Prince of Wales is fulfilling the strike carrier role and the government needs both a strike carrier and LPH? The pledge to bring forward the acquisition of the planned 138 F-35Bs so that 24 frontline aircraft would be available from 2023 sounds like a positive development for the RN. However, with each carrier capable of carrying 36 F-35Bs in the strike role, the planned frontline of 24 F-35Bs by 2023 leaves the UK dependent on the US Marine Corps to fill the deficit. Moreover, sustaining the planned Maritime Task Group will be hampered by delays in the delivery of the four new tankers and the continuing absence of an order for the promised three stores ships.
At the same time, the RN is beset with personnel challenges as the most recent personnel statistics have shown with shortages in a number of specialist areas(MoD 2017). As a consequence, the MoD has acknowledged that one of its frigates, HMS Lancaster, was being effectively mothballed pending a refit later this year. Similarly, as the LPD HMS Albion is brought out of reserve and refit her sister ship will be put into reserve ahead of a forthcoming refit. These factors suggest that the uplift of 400 in personnel numbers announced by the 2015 NSS/SDSR is insufficient to allow the RN to crew its existing ships, let alone ensure that one of the new aircraft carriers is always available. As a result, there are rumours that Royal marine numbers will be cut to free up posts for the dark blue element of the navy.
Personnel shortages only partially explain the decision not to restore the amphibious brigade capability taken as a cut in the 2015 review despite the growing fears expressed about Russia and the need to support the UK’s NATO partners. Instead, much of the amphibious capability is fulfilling other tasks in place of other ships. Thus, HMS Ocean is currently acting as the command ship for the US/UK deployment to the Gulf. At the same time, the RN has struggled to commit ships to the various NATO standing forces and some of its tasking is being gapped. Put simply, the RN appears simply too small for its mandated tasks but the government remains unwilling to acknowledge or address this.
One might be forgiven for holding out for the longer term. Before Christmas, Sir John Parker published his report designed to influence the forthcoming ‘National Shipbuilding Strategy’, which called for major changes and investment in the UK’s naval shipbuilding industry. Many of the recommendations appear sound, including gearing the new Type 31 frigate for export and seeking to break BAE Systems’ monopoly of the construction of major warships. Such recommendations are, however, strangely familiar: both the Type 23 frigate which the Type 31 will partially replace and the Upholder class of conventionally powered submarines were originally designed with the export market in mind in the 1980s. It is noteworthy that no foreign sales were achieved and the Upholders and three of the Type 23s were ultimately sold-second hand to Canada and Chile respectively. Moreover, if the government truly wants to implement a viable long-term national shipbuilding strategy, then it needs to bear in mind the life-cycle of its ships and how this will influence the RN’s force size. For example, a RAND study of the UK’s nuclear submarine industrial base concluded that to maintain the industry’s capacity a submarine needed to be ordered every two years (Schank 2005). If one assumes an average lifespan of 30 years then the submarine force needs to comprise some 15 boats. Currently the force comprises just four SSBNs and seven SSNs with no planned future increases.
Moreover, lurking in the background are question marks over the wider affordability of the Ministry of Defence’s (MoD) overall Equipment Plan between now and 2026. The most recent edition was published in January 2017 and the financial risks contained within were highlighted in the accompanying National Audit Office report. Four risks stand out. First, previous iterations of the Equipment Plan had contained significant amounts of uncommitted ‘contingency’ funding to cover unforeseen programme cost increases and new requirements. This reserve has been almost entirely allocated to new programmes with the result that there is little flexibility in the budget despite the MoD’s extensive previous experience of unforeseen programme overruns and cost increases. Second, one of the results of the Brexit referendum vote has been a fall in the value of Sterling against both the US Dollar and Euro. Whilst the MoD has taken some mitigation steps, the January NAO report highlights that these ‘hedges’ will be insufficient unless the value of Sterling starts to rise. In particular, the significant cost of existing equipment orders in US dollars from the US – including the Boeing P8A Apache AH-64E, F-35B and successor missile compartment tube programmes – means that further cuts to the MoD’s equipment programme are almost certain. Third, the affordability of the Equipment Plan is predicated on a shift of funds from other areas of the defence budget. The risk here is that MoD assumptions that personnel costs will rise below the rate of inflation, significant income can be generated from the sale of assets and major efficiency savings can be achieved might prove overly optimistic. Indeed, failure to achieve the requisite savings in any of these areas could derail defence budgeting assumptions and, by implication, the future viability of the MoD’s Equipment Plan. Finally, the budget is predicated on a 1% real terms increase in defence spending for each of the next ten years. Ironically a similarly optimistic outlook was ultimately the undoing of the ill-fated 1981 Nott Review.
These factors, together with concerns over whether the UK’s GDP will continue to grow in the post-Brexit era, raises serious doubts about whether 2017 will be the ‘year of the Royal Navy’ or the nadir before which financial chickens finally come home to roost.
Image: HMS Arc Royal, courtesy of Wikimedia Commons.
Suggested further reading
‘2017 is the Year of the Navy’, Ministry of Defence Press Release, 1 January 2017, https://www.gov.uk/government/news/2017-is-the-year-of-the-navy
‘An Independent Report to inform the UK National Shipbuilding Strategy’, Ministry of Defence, 29 November 2016, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/572532/UK_National_Shipbuilding_Strategy_report-FINAL-20161103.pdf
Cabinet Office, ‘National Security Strategy and Strategic Defence and Security Review 2015: A Secure and Prosperous United Kingdom’, Cm.9,161, (London: TSO, 2016), https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/555607/2015_Strategic_Defence_and_Security_Review.pdf
Ministry of Defence, ‘Royal Navy and Royal Marines Monthly Personnel Situation Report for 1 January 2017’, 9 February 2017, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/590163/20170207_-_FINAL_-_RN_RM_Monthly_Situation_Report_January_2017-rounded.pdf
National Audit Office, ‘Ministry of Defence – The Equipment Plan 2016 to 2026’, HC.914, session 2016-17, (London: TSO, 2017), https://www.nao.org.uk/wp-content/uploads/2017/01/The-Equipment-Plan-2016-2026.pdf
John F. Schank, Jessie Riposo, John Birkler, James Chiesa, ‘The United Kingdom’s Nuclear Submarine Industrial Base, Volume 1’, Sustaining Design and Production Resources RAND, 2005), file:///C:/Users/Andrew%20Dorman/Downloads/RAND_MG326.1.pdf