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The launch of HMS Daring on 1 February 2006 was a genuinely great day for the Future Royal Navy.

RN Year in Review - 2006
...  the lowest priority

24 December 2006

Every year since 2000 I have  written an end of year wrap up ... and everyone is more depressing to write and read than the last.  Sadly 2006 is ending on a new low, with precious little good news and rumours of a yet another round of deep cuts getting ever stronger. 

In 2005 we had the Trafalgar bicentenary which at least forced many senior officials of the realm to pay some lip service to the Royal Navy, but 2006 didn't even have that slight compensation.

There is no longer any doubt that the determination of the current government to fight wars around the world within a peace time defence budget is now having an obvious, dramatic, indeed traumatic, effect on the UK's armed forces – any formations and capabilities not obviously required immediately for Afghanistan, Iraq or the War on Terrorism are at best being starved of funding and resources, at worst they are being disbanded or dropped.  Our partner the USA has increased regular defence spending by over a third since 2001 in real terms, the whilst UK's defence spending has remained almost static:

Annual Defence Budget at constant 2000 prices (billions)
  2001 2002 2003 2004 2005 (est.)
United Kingdom

£23.926

£23.859

£24.266

£24.330

£24.611

United States

$303.339

$336.898

$383.292

$416.753

$411.465

Source: MOD's Defence Analytical Services Agency, Defence Statistics 2006

The above numbers exclude special funding, for example in  2004-05 the Treasury allocated a special reserve of £0.86 billion as "provision for the military conflict in Iraq and ... other international obligations" - vital but hardly generous funding which the MOD then had to justify using on a bill by bill basis.

By comparison, supplemental appropriations now represent a massive additional increment to American defence spending - $82 billion in 2005 and increasing rapidly.  According to the Lexington Institute "The buying power of [American] defense outlays in fiscal 2007 is likely to reach twice the level of [2001] - $304 billion then versus $630-660 billion today."   

As the service that is perhaps the least obviously involved in the conflicts waging today - despite the magnificent efforts of the 3 Commando Brigade Royal Marines and large parts of the Fleet Air Arm in Afghanistan and Iraq as I write this - the Royal Navy is effectively on a starvation diet and has lowest priority for funding.  Since the end of the Cold War in 1990, the core Royal Navy has declined in size by at least a half (excluding the Royal Marines).  Based on the trends of the last few years, supported by rumours of cuts to come, the Royal Navy is just 10-15  years away from losing its last ship or submarine.

RN strength at 1 April on the year stated

(1990 is usually recognised as the end of the Cold War, the current Labour government came to power in 1997)

  1990 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Manpower (thousands) 55.8 28.4 37.5 36.7 35.7 35.4 34.6 34.3 33.7 32.6 32.0
Escorts (Destroyers & Frigates) 49 35 35 35 32 32 32 31 31 28 25
Fleet Subs (not SSBNs) 29 12 12 12 12 12 12 12 11 11 10
MCMVs 41 18 19 20 21 23 22 22 19 16 16


Source:  MOD's Defence Analytical Services Agency, Defence Statistics for various years (excl. projected)
Manpower excludes Royal Marines, this has had to be estimated for 1998-200
but is likely to be accurate within 100-200.

The starting point for this year’s bad news has to be the Carrier Strike programme.  Given that the carrier force is currently considered one of the RN three key non-deterrent core capabilities (the other two being its amphibious force and nuclear fleet submarine flotilla), and I’ll thus cover the year in some detail here:

After a wave of announcements in relation to the Future Aircraft Carrier (CVF) project at the end of 2005, it seemed that 2006 might... just might ... be the year when the project finally got approval to proceed to the manufacture phase.  But it was to end in tears. 

A failure for the MOD and industry to agree the projects cost (£3.6 billion budget vs £3.8 billion bid on offer) despite over three years(!) of detailed negotiations led to a planned Main Gate submission being embarrassingly pulled at the last minute in late October.  The Minister of State for Defence Procurement, Lord Drayson, then also resurrected a previous demand that the UK naval industry restructure itself as a pre-requisite for the carrier order. This restructuring has proved far more complex to agree than expected (although talks certainly began as far back as 2004, if not earlier behind closed doors), and is agreement is now pencilled for 2007 - believe it when it's signed.

News has been mixed in relation to the Joint Combat Aircraft (JCA) that CVF will carry.  The first Lockheed-Martin Joint Strike Fighter (JSF) F-35A prototype finally flew on 15 December, and a few days before that Lord Drayson signed a Memorandum of Understanding (MoU) on the UKs participation in next phase of the Joint Strike Fighter programme – JSF having been selected as JCA.  However US sources indicate the UK has reduced its expected JSF buy from about 150 to 138, even more worryingly some of these will now probably be a land based variant of the USN’s F-35C carrier variant – equipping two RAF squadrons in a manned deep strike role.  With the JCA budget essentially fixed it will be necessary to compensate by significantly reducing the number of CVF compatible F-35B’s to be procured.  The four existing front line Joint Force Harrier squadrons (2 predominately FAA manned, i.e. 800 and 801 NAS) are now expected to get just 9 F-35B aircraft each, rather than the previously planned 12.  There’s a very serious concern that if the CVF’s are ever built, regularly finding a non-trivial number of fast jets for their airgroups will an enormous challenge, and if the efficient operation of a large number (apparently 36) JCAs is no longer a genuine requirement then a smaller and much cheaper design could be built instead.  This line of thinking is not alleviated by other events that occurred during 2006.

In the years 2003 to 2005 the aging but recently refitted carriers HMS Invincible and HMS Illustrious several times impressively operated balanced airgroups of up to 15 Sea Harrier FA.2 fighters and [RAF] Harrier GR.7 strike aircraft, plus 3 Sea King ASaC.7 AEW helicopters – the first time the RN had had this type of capability since the 1970’s.  Almost inevitability this situation was too good to last and a whole bunch of nails were driven in to the coffin of naval aviation when the final Sea Harrier naval air squadron (NAS), 801, disbanded at RNAS Yeovilton on 31st March 2006.  800 and 801 NAS have since reformed as Harrier GR.7/9 squadrons at RAF Cottesmore in the dedicated “strike” role, but are badly under strength in terms of aircraft and - perhaps more critically - naval pilots.

With the RN hoping for a rapid lift-off of the revamped naval side of Joint Force Harrier, 800 NAS operated its newly acquired Harrier GR.7s for the first time from the carrier HMS Illustrious during Operation Aquila – a short deployment East of Suez.  Unfortunately exercises quickly demonstrated just how vulnerable to even a moderate air threat the carrier now was without its own embarked fighters  – a situation not helped by the RN’s lack of modern air defence destroyers.  It thus was depressingly confirmed that in future RN strike carrier operations could only be conducted under the cover of RAF land based fighters; or of French or American carrier based fighters – in either case the costs associated with the deployment of maybe 7 short-ranged Harrier GR7/9’s from an RN carrier task group lacking adequate self defence capabilities would seem disproportionately small compared to the likely benefits that they would bring to the “show”.

In another sign of the changed circumstances, in September 2006 the pilots and ground crew of 800 NAS deployed to Afghanistan to provide Close Air Support (CAS) for the UK Task Force deployed in Southern Afghanistan. The fulfilment of this RAF-type operational task has effectively made 800 NAS unavailable for any carrier based tasking for a 12-month period, while the very under strength stub of 801 NAS can do no more than feed the deployed 800 NAS and conduct some small scale carrier qualification training.  Basically, bar for an emergency, no fixed wing aircraft are currently available for operation from RN carriers, which makes the maintenance of these costly assets difficult to justify when the MOD is so financially stretched. Indeed the carrier force has already been rapidly reduced and plans to establish a dedicated 1* Commander Strike Carrier [Task Group] appointment and staff were put on hold in mid-2006.

HMS Invincible was decommissioned five years earlier than expected in August 2005 and Indian press reports claim that the ship has been offered to them by the UK (presumably the MOD's Defence Services Agency) for just $4 million if part of a larger package including the transfer of Sea Harrier FA.2’s.  India rejected a final variation of this package (de-armed but flyable Sea Harrier's) in November 2005 as still being too costly, and the remaining Sea Harrier's stored at Shawbury will now be stripped and sold for scrap.

HMS Ark Royal has now been re-roled as a Landing Platform Helicopter (LPH) and will replace HMS Ocean while she's in a major 18 month refit, starting next year.  There are no plans to operate Harriers from Ark Royal during this time.

Only HMS Illustrious remains designated as a strike carrier – albeit spending most of her time alongside in Portsmouth.  Amazingly the Operation Vela Task Group (the RN’s largest amphibious exercise for 5 years) deployed off Sierra Leone in October/November 2006 without a covering aircraft carrier – which would have been madness in a time of actual war and shows just how unbalanced the Royal Navy has suddenly become without its Sea Harrier squadrons. 

A major event in December 2006 was the government’s decision to replace the Vanguard class SSBN’s with a new class of 3 or 4 SSBN’s carrying, at least initially, life extended Trident missiles.  For RN this decision is a mixed blessing in that much of the funding (£20 billion – peaking at 5% of the expected annual defence budget during the late 2010’s and early 2020’s) will have to be found from the RN’s share of the budget, thus crippling any other construction plans it has.  It’s no wonder that senior RAF officers apparently gave no support to suggestions that the air force regain the nuclear deterrence role - operating a fleet of 20 bombers carrying cruise missiles with nuclear warheads.

Rushing on now, a few samples of the limited good news in 2006:

  • Launch of the first Type 45 destroyers, HMS Daring on 1 February 2006
  • Future Lynx ordered (but only 30 aircraft to replace the current 70+ Lynx in the RN inventory - its believed that double that number were originally hoped for)
  • Main Gate for the Merlin Merlin Capability Sustainment Programme
  • Phalanx Block 1B upgrades ordered  (but only for 16 of the RN’s 36 systems)

And some more samples of "bad" news:

  • 19 of the the Royal Navy's 44 major surface warships are already at reduced levels of readiness Expected completion order for the three T45 Batch 2s still not announced 
  • No announcement on ordering of additional Astute class submarines
  • In-service date for HMS Daring further delayed to December 2009 (originally it was May 2007), apparently due to problems with the BAE SAMPSON radar system
  • More cost overruns revealed in relation to the Bay-class LSD(A)s - the two Swan Hunter ships will cost at least double the originally contracted price of £148 million
  • Final closure of the Swan Hunter shipyard with the transfer of the remaining uncompleted Bay to the BAE Govern yard
  • Demise of plans for a medium vessel derivative to replace the Type 22 Batch 3 frigates, possibly as part of the Sustained Surface Combatant Capability
  • Unwillingness to commitment to a next generation of UK manufactured heavy weight torpedo’s – an eventual foreign buy seems now inevitable

Perhaps the worst news at the end of 2006 is not hard news, but the rumours of further cuts likely to be announced during 2007 as the MOD attempts to keep within the spending limits rigidly set by the Treasury.   It seems that the MOD is projecting a substantial overshoot for the current 2006-7 financial year which is necessitating immediate economies such as reduced levels of training and maintenance.  From press reports the MOD will apparently have to find cuts totalling about  £1 billion between now and March 2009, and another £1 billion for the next three year spending period in to 2012.

The MOD is currently conducting a rapid review of its spending priorities going forward, and all equipment projects not directly associated with operations in Iraq and Afghanistan are being questioned as it prepares a new budgetary proposal to be put to the Treasury in early 2007.  Unfortunately within the MOD the RN's case has not been helped by the National Audit Office revealing further in-year (2005-6) cost increases to key naval projects in its MOD Major Projects Review 2006 report - e.g. the expected final bill for the Type 45 programme (first six destroyers) has gone up by £157 million and for the Astute programme (first three submarine) costs have increased by  £164 million.  There is little doubt that the RN will be forced to offer appropriate savings elsewhere, if it hasn't already.

The RN related options now apparently being considered by the MOD include:

  • Formal cancellation (long expected) of plans to build the seventh and eighth T45 destroyers (twelve were originally planned).   The budget of about £1.1 billion is apparently significantly less than BAE Systems has bid
  • The additional cancellation of the sixth (HMS Duncan) and even fifth (HMS Defender) Type 45 Batch 2 destroyers – possible sale of the bare hulls to BAE Systems for completion for the Kingdom of Saudi Arabia
  • Reducing the escort force by six units, from 25 to 19.  This would apparently be achieved by the removal from service of the four Type 22 Batch 3 frigates and two Type 42 Batch 2 destroyers.  Saving of about £150 million a year
  • Reducing the mine counter measure force by several vessels
  • Reduction of the Assault Ship (LPD) HMS Albion to extended readiness (i.e. reserve)
  • Closure or significant down grading of a naval base – probably HMNB Portsmouth
  • A cut of 2000 in RN manpower (from 32,000 to 30,000, excluding Royal Marines and an existing deficit compared with requirement of over 1000).  Estimated direct pay and allowances saving of about £60 million a year plus further indirect savings
  • Conversion of some of the RN’s 43 Merlin HMA.1 ASW helicopters (developed and built under a programme that cost approximately £4.65 billion - about £100 million each) to a troop carrying 'Commando' role.  This would allow the rejection or reduction of some of the alternative tactical transport helicopter procurements currently being considered as a high priority
  • Cancellation of the Shaman Communications ESM system.  Saving of up to £140 million
  • Transfer of command of the Royal Marines Corps to the Army.  Possible financial savings from standardisation, economies of scale and eliminated duplication

It is perhaps no coincidence that in late December former First Sea Lord, Admiral Sir Alan West, publicly warned about the impact of pouring money in to the conflicts in Iraq and Afghanistan and Iraq while squeezing budgets and failing to invest elsewhere.  He said that cash meant for the two CVF's was being "nibbled away" as delays continued in putting them on contract, and in the Sunday Telegraph of 24 December 2006 he was quoted as saying that "The carrier programme is the jewel in the crown of the strategic defence review, yet there are officials within the MoD casting lascivious looks at it.   ... If people are starting to say, 'Oh goodness me couldn't we use this money elsewhere? Couldn't we do something else?' then [ministers] might listen to those appeals."  A recently retired senior officer can say things that those still in the service cannot.

Maybe we should enjoy the last few days of 2006 as 2007 may well be even worse!  Carpe diem.

 

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 © 2004-8 Richard Beedall unless otherwise indicated.