The last UK Strategic Defence Review, following fourteen months of preparation and consultation, was presented to Government in July 1998. It identified that, at the time, there was no direct military threat the UK or Western Europe and that future conflicts were likely to come from religious conflict, competition for scarce resources, drugs, terrorism and crime. In the context of a post Cold War environment the review called for a more flexible, mobile, responsive fighting force and made a number of key recommendations:
• enhance joint capabilities - a strategy for increased cooperation between forces and rapid response;
• plug the gap - enhanced capability of Defence Medical Services and remedies for weaknesses in Logistics;
• modernise the services - commitment to defence hardware through to 2015 (notably two new aircraft carriers and confirmation of 232 Eurofighter aircraft);
• make the world a safer place - deterring and preventing conflict and crisis;
• care for our people and society - recruit, train and equip the best people; and
• make every penny count - introduction of Smart Procurement, joint Defence Storage and Distribution Agency (DSDA) and new 4* Chief of Defence Logistics.
The defence guidance resulting from the Strategic Defence Review of 1998 was considered to be ambitious within the constraints of MoD funding 11 years ago and big efficiency savings had to be assumed to bridge the gap. As a result the financial implications of requirements decisions made at the time were made with a relatively poor understanding of the likely consequences for required spending or the financial / defence outputs tradeoffs required to ensure the Armed Forces remained affordable.