A huge defence deficit, which the Tories have long claimed, has been exposed in a highly critical report by the National Audit Office, published today as the Defence Secretary prepares to cut back on spending and reprioritise budgets for the Afghanistan campaign.
The report reveals that, despite delaying major projects and cutting the equipment programme, the MoD still faces a shortfall of between £6bn and £36bn.
Closing the gap will require bold action as part of the Strategic Defence Review, according to the report, which highlights how the MoD has tried and failed to save money by delaying projects like the Supercarriers, which are being partially constructed at yards in Scotland.
The MoD has already reduced the deficit between the defence budget and planned expenditure by £15bn, but remains seriously in the red, with an increase in budgets highly unlikely.
If the Joint Combat Aircraft, the RAF’s replacement fighter jet due in 2025, is cancelled or cut back, it could have implications for RAF Lossiemouth in Moray, currently a Tornado GRA aircraft base.
The RAF Kinloss base could also find itself vulnerable in a scaling back of defence projects, although neither base is expected to be mothballed by the Secretary of State Bob Ainsworth in his statement on defence expenditure today.
Edward Leigh MP, Conservative chairman of the Committee of Public Accounts, said the current defence programme was simply unaffordable.
“The bleak economic outlook means it is highly unlikely there will be any extra funding to close this financial chasm. Hard decisions need to be taken in the near future.
“Despite the MoD’s slashing equipment programmes and delaying projects, it still cannot balance its books.
“Even assuming no reduction in the cash available for defence – and given the state of public finances, that’s a big assumption – there is a potential shortfall of tens of billions of pounds.”
However, Glasgow South West MP Ian Davidson said the carriers to be built at Govan shipyard and Rosyth represented good value at an estimated £4bn a pair.
“The rescheduling of the aircraft carriers was always going to be more expensive, but I think it will be a saving overall because it keeps the shipyards open and working until the Future Surface Combatant [a frigate replacement] comes onstream,” said Mr Davidson. “If the carriers had been built swiftly and cheaply the yards would be out of work in 2016.”
Major projects like the Royal Navy’s two new aircraft carriers could be vulnerable in a strategic defence review scheduled to be held after the General Election. A Green Paper on defence will be issued next year.
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