03 Oct 2012

MOD spending to be reviewed by a future Labour government

This week saw the Labour Party Conference be held in Manchester, a conference which has set the direction Labour plans to take in the run up to the next General Election.

High on Labour’s list of ‘problem areas’, understandably, is spend, and Shadow Defence Minister Jim Murphy has outlined the party’s plans for MOD spend in particular if elected in 2015.

The unprecedented ten-year rolling defence budget would be annually assessed externally by the National Audit Office, Mr Murphy unveiled.

He said: “This is an effort to change the architecture and culture of the MoD budget. It is real-time scrutiny, forensic and independent assessment of a ten-year MOD budget. We are determined to add discipline and rigour to defence spending.”

The move, it is claimed, will bring transparency to all MOD spend transactions and justifiable decisions without the ‘smoke and mirrors’ or previous budgets.

If elected in 2015, these plans for the defence budget would have massive implications for the industry as a whole.

Mr Murphy also said that an already announced series of expensive defence spending commitments after the next election will require “strict discipline” to avoid a so-called “perfect storm” of defence capital costs in 2020. These include building the new Type 26 frigates, which DCI outlined a previous blog, as well as the launch of amphibious craft for the Navy and new combat ships.

A new, ‘disciplined’ approach to defence budgets could have lasting effects on the industry, possibly bringing reduced spending and increased competition in an effort to reduce overspend on projects.