£38 billion defence 'black hole' filled


A £38 billion black hole in the UK's defence budget has been eliminated, Defence Secretary Philip Hammond confirmed today.

The Defence Secretary told the House of Commons that the Government had balanced the books as he admitted "tough decisions" were required to fill the gap.

But he refused to release specific details of costs, citing national security and commercial sensitivities.

Despite now having £8 billion headroom in the overall 10-year defence programme and a £4 billion centrally-held contingency fund, Mr Hammond said planned redundancies in the forces would still go ahead.

In a statement to the Commons, Mr Hammond said there had been a "woeful" lack of spending restraint in the Ministry of Defence in the past.

He insisted he had been assured the "prize for good behaviour" now would not be a "Treasury raid" on the department's budget.

The Secretary of State insisted the department would neither underspend or overspend.

"We will manage these budgets to the wire," he added.

The Chief of Defence Staff, General Sir David Richards, admitted in the past that the military, bureaucrats and politicians had "worked in a spirit of optimism rather than realism".

"We were all guilty to a degree," he added.

Mr Hammond told MPs his overriding priority was ensuring the success of military operations.

He added: "The best way I can support our armed forces as they restructure and refocus themselves for the future is to give them the reassurance of stable and well-managed budgets and the confidence the equipment programme is affordable and deliverable."

He praised predecessor Liam Fox for taking "agonising" decisions and officials for helping to turn the "supertanker" around.

"After two years' work, the black hole in the defence budget has finally been eliminated and the budget is now in balance, with a small annual reserve built in as a prudent measure to make sure we are not blown off course by unforeseen events.

"A plan which is endorsed by the chiefs and by the Treasury. We have achieved this by facing up to the fiscal reality and taking the tough decisions which the party opposite shirked."

Mr Hammond said that included reluctantly accepting a smaller armed forces and transforming the role of the TA as the Army gets smaller.

In a major U-turn last week, Mr Hammond announced he was scrapping plans to acquire a more capable version of the US-built Joint Strike Fighter for the Royal Navy's new aircraft carriers.

He said the decision - in the face of soaring costs - to revert to the jump jet variant ordered by Labour was the "last big piece in the jigsaw".

Mr Hammond said financial details of the overall defence plan could not be published because they were highly sensitive and were also subject to commercial confidentiality.

He insisted the plans would be submitted in detail to public spending watchdog the National Audit Office, which he hoped would "reassure" the public.

At a media briefing, Mr Hammond said there was a "very big mess" in the MoD when the Coalition took power and a culture had set in that meant projects were costed based on the best possible outcome.

General Sir David Richards said senior figures in the forces had looked deep into their consciences over how the department had been run.

He added: "There's no doubt we were all guilty to a degree, but we are, this generation of chiefs, the permanent secretary and her staff, have very willingly and together decided enough is enough and we are going to do it better."

Shadow defence secretary Jim Murphy said there was "little detail to support grand claims".

He added: "Short term control of defence costs in order to support careful deficit reduction needs to be coupled with long term reform. The Government, however, has been reckless where care was essential and timid when boldness is required.

"The Defence Secretary has said that there will be no more cuts over and above what he's already announced. This will be of little consolation to the thousands of service personnel yet to be sacked, those facing a £900 million cut to allowances and the veterans and war widows whose pensions are being cut year-on-year."

Prospect, the union that represents 7,000 MoD civilian specialists, accused Mr Hammond of using "smoke and mirrors".

National secretary Steve Jary said: "The Ministry of Defence's claim to have balanced its books does not stack up. It is smoke and mirrors.

"MoD has said it has balanced its books for nearly a year. Why should we believe it will be different this time? Philip Hammond's statement today fails to identify which parts of the equipment programme are to be dropped. Yet, apparently, nothing has changed since last year.

"It seems that the Secretary of State has been persuaded to maintain the 'wish-lists' and unfunded aspirations of the service chiefs: the fuel for what Bernard Gray called the MoD's conspiracy of optimism.

"The wish-lists cost money and tie up people in the development of proposals which, if Hammond is to be believed, will never see the light of day. MoD has delayed its cull of procurement specialists until it knows which programmes are to be dropped. It now appears that it will have to make the cuts while maintaining outputs.

"Without cuts to major elements of the equipment programme, once those jobs have gone there will not be sufficient in-house capability to deliver that equipment. This will mean increased costs, delays and new risks to our armed forces as their safety and security is compromised.

"MoD must now come clean and reveal how it 'balanced the books' and at what cost to the defence of the UK."


Alexis Sanchez has completed a £35m move to Arsenal, the club have confirmed
sportGunners complete £35m signing of Barcelona forward
Poor teachers should be fearful of not getting pay rises or losing their job if they fail to perform, Steve Fairclough, headteacher of Abbotsholme School, suggested
voicesChris Sloggett explains why it has become an impossible career path
world cup 2014
Ray Whelan was arrested earlier this week
Have you tried new the Independent Digital Edition apps?
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
In a minor key: Keira Knightley in the lightweight 'Begin Again'
Arts and Entertainment
Celebrated children’s author Allan Ahlberg, best known for Each Peach Pear Plum
peopleIndian actress known as the 'Grand Old Lady of Bollywood' was 102
Wayne’s estate faces a claim for alleged copyright breaches
newsJohn Wayne's heirs duke it out with university over use of the late film star's nickname
Life and Style
It beggars belief: the homeless and hungry are weary, tortured, ghosts of people – with bodies contorted by imperceptible pain
lifeRough sleepers exist in every city. Hear the stories of those whose luck has run out
Mick Jagger performing at Glastonbury
Life and Style
fashionJ Crew introduces triple zero size to meet the Asia market demand
Santi Cazorla, Mikel Arteta and Mathieu Flamini of Arsenal launch the new Puma Arsenal kits at the Puma Store on Carnaby Street
sportMassive deal worth £150m over the next five years
Arts and Entertainment
Welsh opera singer Katherine Jenkins
musicHolyrood MPs 'staggered' at lack of Scottish artists performing
Life and Style
beautyBelgian fan lands L'Oreal campaign after being spotted at World Cup
Arts and Entertainment
Currently there is nothing to prevent all-male or all-female couples from competing against mixed sex partners at any of the country’s ballroom dancing events
Potential ban on same-sex partners in ballroom dancing competitions amounts to 'illegal discrimination'
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Business Analyst Consultant (Financial Services)

£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

Systems Administrator - Linux / Unix / Windows / TCP/IP / SAN

£60000 per annum: Harrington Starr: A leading provider in investment managemen...

AVS, JVS Openlink Endur Developer

£600 - £700 per day: Harrington Starr: AVS, JVS Openlink Endur Developer JVS, ...

E-Commerce Developer

£45000 - £60000 per annum + competitive: Progressive Recruitment: Exciting opp...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice