- Top brass are in a race to cut costs due to projected spending over next decade
- The MoD must also find £406million to pay for a record rise in troops’ pay
- Admiral Lord West, former head of the Royal Navy, called for more investment
Hard-up defence chiefs have sent a letter to suppliers calling on them to help with money-saving initiatives.
It seems the need to reduce spending is so desperate companies have been given 36 hours to provide suggestions.
The move comes as top brass are in a race to cut costs due to a £16.9billion ‘black hole’ in defence finances.
That figure, calculated by the National Audit Office, compares projected spending and projected budgets over the next decade.
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Chancellor Rachel Reeves has ordered all government departments to cut costs by more than £3billion.
Hard-up defence chiefs have sent a letter to suppliers calling on them to help with money-saving initiatives as top brass race to cut costs due to a £16.9billion ‘black hole’ in finances
Chancellor Rachel Reeves has ordered all government departments to cut costs by more than £3billion
The Ministry of Defence must also find savings of £406million this financial year to pay for a record rise in troops’ pay.
Defence Secretary John Healey confirmed to Parliament the 6 per cent rise for all ranks, and 7.5 per cent for recruits, must come from existing budgets.
These factors have contributed to the urgent need for MoD officials to tear up existing spending plans – triggering the SOS to defence contractors.
The letter requested ‘high-level, headline ideas’ to reduce spending. It expressed regret over the ‘hard choices’ required and the rapid turnaround.
But Admiral Lord West, former head of the Royal Navy, warned that savings could compromise capability and that additional investment was a necessity.
He added: ‘They can make a small cut here and there, we know there is waste, but reducing back-office costs is not going to achieve a lot.
‘Contractors tend to delay projects when asked to make savings. That may improve the balance sheet for the next year, but a delayed project usually ends up costing more, not less.
‘With the state of the world, and with Russia and China to contend with, there is no substitute for a significant increase in capital investment in defence.’
Shadow defence secretary James Cartlidge said: ‘We urgently need clarity from Labour whether these reports of major defence spending cuts are true.’
Defence Secretary John Healey confirmed to Parliament the 6 per cent pay rise for all ranks, and 7.5 per cent for recruits, must come from existing budgets
Admiral Lord West, former head of the Royal Navy, warned that savings could compromise capability
The Daily Mail’s influential Don’t Leave Britain Defenceless campaign has called for our armed forces to be adequately funded.
The MoD said: ‘As the Chancellor has said, the Government has inherited public finances much worse than expected.
‘The NAO has confirmed the largest ever deficit in the defence equipment plan.
‘The Government will secure Britain’s defences for the future and increase defence spending to 2.5 per cent of GDP as soon as possible.’
