Friday, March 16, 2012

New RAF aircraft.... leased under UORs

(Not all RAF BAe 146s are created equal - here's the rest of the fleet from 32[TR] Sqn)

Some interesting news at a time of further UK MoD cuts: the RAF is to lease two BAe 146-200QC airliners to fly personnel and equipment around Afghanistan. The idea is to take the pressure off the RAF's small C-130 Hercules fleet, which has been on almost continuous operations since the initial deployments to the former Yugoslavia in the early 1990s. Indeed, it was the operations tempo that led to the C-130K fleet finally being retired without replacement - as the Airbus A400M is running behind schedule and over budget.

What's interesting here is that this is being procured under an Urgent Operational Requirement (UOR) which is normally funded directly from the Treasury via an additional appropriation for operations. (This is in addition to the actual additional cost of fighting - known as Net Additional Cost of Military Operations, or NACMO).

(UORs inbound!)

Now, back in ancient history (known as "2001") UORs used to be funded in full, with very few questions asked. This - and the failings of the conventional acquisition system led the UPR system to be the front-line's preferred route of getting the tools needed for the job in hand, and the costs exploded. This was made worse because UORs were by their nature temporary for a single conflict, meaning that the equipment would be withdrawn from service a maximum of 12 months after the end of the conflict - or the MoD would have to find the cash in their existing budget to sustain the equipment (known as bringing it into core MoD capability).

What this meant for the UOR kit was that there were rarely examples in the UK for large-scale training, spares were kept to a minimum (as it was a temporary expedient), and there was none of the conventional engineering and training support associated with conventionally procured equipment. But if the genius point for the hard pressed front line was that off-the-shelf kit arrived and worked (more or less), the fact that the Treasury's reserve paid for it made it a boon for the accountants faced with a deluge of overspends in the procurement budget. (And to the extent that defence industrial policy matters, off the shelf kit was often built outside the UK - often in the US, which didn't help Britain's defence industry too much.) 

And the sums were vast: the UK NAO estimates that UORs for armoured vehicles from 2003-11 consumed £2.8bn - in total, equivalent to about half of the annual equipment budget - whilst £1125m was spent on conventional programmes for similar vehicles, £718m of which actually resulted in ZERO actual armoured vehicles being procured in the conventional route. The net result is that the British military will be short of armoured vehicles until at least 2024-25.

Things got so bad during the mid-2000s with Iraq and Afghanistan, the Treasury finally said no, and told the MoD that there would be a cap, and that instead of UORs being "extra free money", above a ceiling, Treasury would reclaim the UOR cash from future years appropriations, further dragging the MoD's long-term planning into the mire. 

So how does this affect two secondhand BAe 146s?

At one level, not at all. The UK is going to withdraw combat forces from Afghanistan in 2014 and it would pointless to procure this niche capability if we were to find it unnecessary in less than 24 months’ time. Indeed, this is precisely the situation the United States have found themselves in scrapping the Joint Cargo Aircraft (JCA)programme, with the expensive embarrassment of having purchased brand-new C-27J Spartans. Instead the UK will spend £6m + defensive modifications to provide a useful intra-theatre airlift option. So far, so good.

But it underscores the lack of planning and delivery of core MoD capability - in this case A400M tactical airlifters - continues to cause the panic button to be hit and UORs to be required. 

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