Correction: The headline has been changed for clarification — Britain is not conducting a new SDSR, but rather a review of the existing SDSR.
LONDON — The Ministry of Defence, the Treasury and other key departments are taking part in a British government review of national security capabilities, which is expected to report toward the end of the year.
The work supports the ongoing implementation of the 2015 national security strategy and the Strategic Defence and Security Review, or SDSR, the Cabinet Office, the government department leading the review effort, said in a statement.
“The national security capability review will include examination of the policy and plans which support implementation of the national security strategy, and help to ensure that the U.K.’s investment in national security capabilities is as joined-up, effective and efficient as possible, to address current national security challenges,” a statement from the Cabinet Office said.
Several government departments are involved in what the Cabinet Office described as individual strands of work being taken forward by cross-departmental teams to feed into the review.
A government source said the MoD, the Treasury, the Home Office and the Foreign Office were all involved in a Cabinet Office-led review set to run for 90 days.
A Cabinet Office spokeswoman said the outcome of the review would likely be published in it’s annual review of progress on SDSR set for the end of the year.
Several industry executives said the MoD strand of the review has been underway for around a month and is set to run for a total of 60 days.
The MoD work is being led by Will Jessett, the department’s director for strategic planning, said the executives.
Jessett led MoD’s work on the well-regarded, but inadequately funded, 2015 SDSR.
The MoD declined to comment on the new review and referred questions to the Cabinet Office.
Defence Secretary Sir Michael Fallon has previously acknowledged that some parts of the SDSR need to be “refreshed” but stopped short of confirming the Cabinet Office Is conducting a review.
Speaking to reporters during a recent trip to Washington, Fallon linked the refresh to Britain’s exit from the European Union, although the Cabinet Office statement announcing its review made no direct mention of Brexit.
“It’s quite reasonable, I think, to look at the [SDSR] and see whether it still holds good in the light of Brexit from 2019 onwards,” he said.
“The [SDSR] is based on the spending period envisioned under the previous parliament, [2015 through 2020]. We’re now in a new situation in parliament, ’17 through ’22, enough to recalibrate the end of those programs.”
A spokeswoman for the Cabinet Office, which supports the work of the prime minister and the Cabinet, declined to give any further details on the extent of the review being led by National Security Adviser Mark Sedwill.
Considerable attention has been focused here in recent months by the media, retired senior officers and others on MoD budget shortfalls and the potential impact on military capabilities, but the spokeswoman would not say whether those issues would figure in the review.
One MoD source claimed the review was not about the affordability of the equipment plan but refreshing cross-government priorities.
Whether the equipment procurement plan and military capabilities are part of the review, the defense budget going forward appears to be in a mire, exacerbated by the steep fall in the value of the pound against the dollar and the euro.
The MoD has committed to spending £178 billion (U.S. $2.3 billion) on the equipment plan over the next 10 years. The largest element of that program is the start of construction of four Dreadnought-class ballistic missile submarines in a program set to cost at least £31 billion (U.S. $40 billion).
A sizeable chunk of that equipment plan spending, £9.2 billion (U.S. 12 billion), was mandated by SDSR 2015 to be generated by efficiencies and reprioritizing programs over a five-year period with the money saved being recycled into other parts of the MoD equipment plan.
Over the 10-year period of the equipment plan, the need for efficiency savings is significantly greater, according to Stephen Lovegrove, the MoD’s permanent secretary and the department’s most senior civil servant.
“We will need to devote much more, and more expert, resources to seeking out and securing the £20 billion of efficiencies we must make over the next 10 years. Notwithstanding our increasing budgets, our ambitious equipment program will not be affordable without them,” he said during a speech at the Institute for Government in London recently.
The total MoD budget this year stands at £36 billion (U.S. $47 billion). The Conservative Government is committed to annually raising defense spending by 0.5 percent above the rate of inflation until 2022.
Almost half of the 10-year savings is expected to come from the British Army.
Even the £9.2 billion in savings, which is part of the £20 billion (U.S. $26 billion) figure, is proving difficult to achieve, and the task is only going to get harder if Lovegrove’s target is to be met.
“This search for the holy grail of £20 billion in savings is unrealistic. The savings that were available have already largely been taken; the low-hanging fruit has already been swallowed up over the last decade or so. The only significant thing left is really taking the knife to the body proper,” said John Louth, the director for defense, industries and society at the Royal United Services Institute think tank in London.
The MoD has only recently signed-off it’s 2018 fiscal year annual spending plans, known as the annual budget cycle, after a struggle to match budgets to commitments.
Louth said that Jessett and Lovegrove are mostly focused on identifying early-year savings from the MoD spending plans rather than any broader refresh of SDSR envisaged by the Cabinet Office review.
“The MoD has enormous problems. They are hoping that the potential savings in the defense estate could be brought to bear in the early years [of the savings], and I’m not sure how realistic that is,” Louth said.
“SDSR 2015 is built on the premise there would be the so-called efficiency savings, and those savings have not been identified. Unless they are, SDSR is unaffordable, and we are back to where we were in 2010-11 with the potential for an ever-increasing bow wave of defense spending to swamp the department in the future,” he said.
Louth said the MoD’s talk of efficiencies is a bit of a misnomer
“In the main, it’s not efficiency in terms of doing more with the same, or the same with a little bit less; it’s absolutely about capability cuts,” he said.
“They will realise fairly quickly there are not the size of savings they need, so they are really talking about what capabilities they value above others or they will have to recapitalize, which effectively means putting more money into defense.”
Andrew Chuter is the United Kingdom correspondent for Defense News.