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was made worse because UORs were by their nature temporary for a single conflict, meaning that the equipment would be withdrawn from service a maximum of 12 months after the end of the conflict - or the MoD would have to find the cash in their existing budget to sustain the equipment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?

("I don't care if they go up-diddly-up-up, etc"... a C-27J swoons)

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. 

PR12 - More UK Defence Cuts?

(Philip Hammond: likely to make sure a balance sheet does. Good for him!)

Parliament rises on the 26th of March - it's taking a break until the 16th of April for Easter and constituency business. And before the Recess, it is expected that Secretary of State for Defence Philip Hammond will address the Commons to announce the outputs of the 2012 MoD Planning Round (known as PR12)  and explain how the MoD's budget has been trimmed from Liam Fox's being "broadly in balance" to actually, well, er, actually being in balance. And to do so with no increases in funding, and presumably with no clear source of magic pixie dust that reduces the costs of military equipment. 

In other words, there are going to be more cuts. In fact, I hear that something like between £3bn and £5bn is likely to be cut from the forward programme. We look forward to understanding how this is going to work out - it is most likely that this will not be outright cancellation of existing contracts (gets very expensive) but is much more likely to be those projects that haven't been signed - but which the forces are expecting to get. Ouch.

Let's see what they come up with - but it makes the case for retaining the Trident replacement programme at £25 - £33bn whilst taking more cuts in the conventional forces ever weaker.