The need for a new SDR has been widely recognised both inside and outside the Department and should be relatively non-controversial. Other measures may see more opposition, but they need to be implemented as a "package" - a theme that recurs throughout these recommendations. Taken together these steps should provide a much better basis for ensuring the MoD acquisition planning and resource allocation is based on up-to-date thinking about threats and capabilities required for the near and longer term.
In order to determine appropriate intervals between SDRs, a process similar to the one used by Boundary Commission could be adopted. The Boundary Commission is mandated by Parliament to undertake a general review of the geographic boundary defining each parliamentary constituency every 8 to 12 years. This interval has been determined in such a way as to ensure that reviews cover two parliaments and give enough time for any recommendations made to be acted upon34.
Furthermore, it should be noted that a new SDR is likely to influence (and be influenced by) the wider framework of Government policy. These include industrial policy, export policy and technology strategy. Consideration of the impacts on these policy areas within the SDR framework needs to be explicit.
In addition, the Review team considers that further emphasis and accountability is required to ensure that the current and future cost implications of defence policy (and subsequent decisions affecting each of the DLoDs) are affordable in the context of the funding realistically available. One mechanism to achieve this is to require the Department's Accounting Officer, the PUS, should explicitly form a reliable view on the long-term affordability of the outcome of future Strategic Defence Reviews. In order to ensure compliance and primacy of this consideration the requirement to form
34 Exact timings of the general reviews are variable. They are based on reviews of the electoral wards used for local elections, which are conducted on a rolling basis. An advisory board of the Boundary Committee recommend when these reviews should commence in order that all wards are re-assessed at the time that the Boundary Commission wants to conduct its general review. Once all of the local reviews are complete, the changes are rolled up and implemented in the parliamentary constituency review. In this way, changes in the demographics of each local ward are also reflected in the national Parliament.
and express this view should be framed in the strongest possible terms, ideally as a legal requirement to Parliament.
The requirement for costing is particularly important. Defence reviews have traditionally been focused more on cost savings than on cost of future capabilities. They have provided a platform for manpower and infrastructure rationalisation, along with a rationale for cancellation of some current or planned equipment. As noted earlier, the 1998 SDR failed to consider the financial impact of some of its recommendations relating to future capability requirements, even though the near term cost impacts of the review on overall defence expenditure were favourable. Problems with the affordability of today's equipment plan can, in part, be traced back to that shortcoming.
Recommendation No. 2 goes hand in hand with No. 1 and also dovetails with recommendations that follow on Equipment Plan affordability (see Chapter 6). A credibly costed long-term defence plan deserves a long-term funding commitment from government.
The current EP process lacks credibility in the Treasury. It is tacitly understood that the Plan is trying to cover too many bases in terms of strategic defence capabilities, so is unaffordable over anything other than the very short-term. Figure 6-3 in the next chapter shows this very clearly. Also, Departmental expenditure on equipment is viewed as always understated because of inevitable overruns from technical issues or estimate optimism. Currently from a Treasury perspective, the EP is anything but a stable long-term plan that the Treasury would want to commit to long tem. The Department is seen to be always overcommitted so there must be external control to reign in expenditure every year.
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34 Exact timings of the general reviews are variable. They are based on reviews of the electoral wards used for local elections, which are conducted on a rolling basis. An advisory board of the Boundary Committee recommend when these reviews should commence in order that all wards are re-assessed at the time that the Boundary Commission wants to conduct its general review. Once all of the local reviews are complete, the changes are rolled up and implemented in the parliamentary constituency review. In this way, changes in the demographics of each local ward are also reflected in the national Parliament.