What Does 2018 Have in Store for Defence Procurement?
What will change in the world of defence procurement with Gavin Williamson as Defence Secretary?
At the start of November 2017, Gavin Williamson was named as the new Defence Secretary. Mr Williamson has not previously served in a senior departmental role. However, Prime Minister Theresa May thinks that the former chief whip will make “an excellent Defence Secretary.”
After the most recent Budget announcement, in which defence spending was barely mentioned, rumours have been circulating that there will be defence cuts soon, but is there any truth behind this?
Find out more about defence procurement and what the future may have in store for the defence sector.
Defence Budget 2017
Let’s start at the beginning. During the Spring Budget announcement in March 2017, Chancellor of the Exchequer Philip Hammond allocated £48 billion to be spent on defence in 2017/18.
Since then there have been calls from former military personnel for the Government to boost the defence budget further due to Russian threats. These calls have been supported by a former Deputy Chief of the Defence Staff and Commander Joint Forces Command.
This suggested that defence could potentially have been one of the biggest talking points of the Autumn Budget but on the day, all that was mentioned was:
- £4.7 million will be allocated to poppy factories for modernisation.
- £36 million from banking fines will support Armed Forces and emergency services charities.
- Tax exemptions on certain allowances will be introduced for Armed Forces families renting in the private rental sector.
Now, many media outlets are speculating whether cuts for the Ministry of Defence are looming.
The Latest in Defence News
The Guardian reported that Defence Secretary Gavin Williamson has asked for an extension of time for his response to a security review that is scheduled to be announced early next year. This will allow him to get up to speed with the work that was completed by his predecessor, Michael Fallon.
So far there has been no confirmation that there will or will not be cuts to the defence sector as Gavin Williamson has only just stepped into the role. He has said that he is currently “taking the opportunity to look at all the work that has been done and making my own judgement on this.”
However, in his first session in the House of Commons as Defence Secretary, Mr Williamson stressed his support for the Government’s commitment to spend 2% of GDP on defence, saying that he saw this percentage as “a base as against a ceiling.”
A compromise deal could soon be reached with Conservative MPs angered by further UK defence cuts, as the chair of the Commons defence committee warned that spending had dangerously downgraded the place of defence in national priorities.
Will UK Defence Cuts Happen?
It has been reported that Sir Nicholas Soames, the grandson of Sir Winston Churchill, and twenty-four other Tory MPs have signed a letter to Gavin Williamson, warning him that defence cuts could mean the potential loss of amphibious assault ships HMS Albion and HMS Bulwark.
Those in support of these vessels say that by getting rid of them Mr Williamson would “dangerously limit the array of options” available to UK forces.
We will not know if defence cuts are going to occur until Gavin Williamson makes his mind up and negotiates with the Treasury. All anyone can do is wait to see what the new Defence Secretary will do next.
What Would This mean For Defence Procurement?
The UK MOD committed to spending around £178bn over the next 10 years as part of the Defence Equipment Plan. However, this may take a knock if the defence procurement budget was cut.
Britain currently spends just over two percent of GDP on defence. If budgets were to be tightened, this would make the defence procurement sector more competitive than ever before.
Defence Procurement News
If you would like to stay informed about defence procurement and news, our DCI packages come with market intelligence tools, so that you never miss any opportunities within the defence sector.