Executive Summary

The UK's defence policy is detailed in the Statement on the Defence Estimates (SDE96), published in May 1996. The framework of policy is provided by three overlapping defence roles, each refined into a number of military tasks and types of possible conflict. Membership of the North Atlantic Treaty Organisation (NATO) remains the cornerstone of UK defence planning, and the UK's policy has been evolving to meet changed circumstances and budgetary pressures.

During 1996, two significant measures were introduced to enhance flexibility and interoperability of the UK Armed Forces: the creation of a Permanent Joint Headquarters and the establishment of a Joint Rapid Deployment Force.

In recent years, the UK Armed Forces have undergone considerable contraction, with the number of total personnel falling from 305,711 in 1990 to 222,417 in 1996. This rationalisation process is forecast to continue, with the number of personnel falling to 213,500 in 1999. Significantly, the percentage of women making up the Armed Forces has increased during the period.

In 1996/1997, UK defence spending is estimated to be £22.13bn, representing 8.5% of government expenditure, and is forecast to rise to £22.8bn (8.1%) by 1999/2000. The defence budget is made up of equipment (39.5%), service personnel (28.9%), works and services (20.8%) and civilian personnel (10.9%).

New concepts to encourage a more business-like approach to the provision of services include: the creation of agencies, which now employ some 76,500 service and civilian staff; the Defence Costs Study (DCS) to identify departmental savings from 1996/1997 onwards; and Project Capital to improve further the financial and management processes.

In the defence industrial sector, there has been considerable rationalisation. Defence industrial capability is dominated by British Aerospace (BAe) and The General Electric Company (GEC). Factors which have contributed to this rationalisation have been the downward trend in defence expenditure, increased global competition and a more competitive domestic procurement policy.

Competitive tendering is used for both development and production contracts, and measures such as the `Competing for Quality' programme and the Private Finance Initiative (PFI), are offering opportunities to companies not previously associated with the Ministry of Defence (MoD).

Equipment programmes expected to cost over £5m in development, or £10m for production, are required to go through the MoD Staff Target/Requirement procedure. The National Audit Office (NAO) produces an annual report on the MoD's major projects. Up until 2001, equipment expenditure appears reasonably smooth, but in the following 3 years considerable overlap appears, which means that one or two programmes may be cancelled, or more likely, slippages in in-service dates will have to be made.

NATO, while remaining the cornerstone of European defence, is having to adapt to changes in strategic circumstances. Issues currently preoccupying the European security debate include: The Partnership for Peace (PfP) programme, NATO expansion and the emergence of a European security and defence identity (ESDI).

During the 5 years from 1991 to 1995, the five permanent members of the UN Security Council and Germany accounted for 87% of all major conventional weapons delivered worldwide by value. For deliveries of major conventional weapons, Asia is a growing marketplace, accounting for 46% of deliveries in 1995, while the importance of the Middle East has declined to 23%.

According to a Gallup survey conducted for this report: 50% of adults are generally opposed to a reduction in military personnel; 60% are supportive of the role of the UK Armed Force in protecting overseas territories; 56% feel NATO's role is relevant; and 48% support co-operation with other members of the EU.

Support for British Forces remaining in Northern Ireland has fallen since the last survey, with 43% now believing that Forces should pull out. The majority (53%) of those surveyed agreed that women should have the same role as men in the Armed Forces, and 50% agreed that homosexuals should be able to serve in the Armed Forces.

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