Michael Evans, Defence Editor
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The hand-outs from the Chancellor did not include any extra cash for the Ministry of Defence’s equipment programme which is facing a black hole of up to £2 billion.
There had been some expectation that Alistair Darling’s plan to boost the economy by bringing forward a number of prestigious construction projects might have embraced the MoD which has a long list of costly programmes in the pipeline and not enough money in the budget to pay for them.
The MoD is already having to consider delaying or even scrapping certain equipment programmes to remain within the budget limits imposed by the current three-year funding settlement negotiated with the Treasury. There are fears that the construction of the second of two new Royal Navy aircraft carriers may be delayed. The two large carriers are to cost £3.9 billion.
After Mr Darling’s Pre-Budget Statement in the Commons, MoD officials confirmed: “There is nothing in it for us.”
Ian Godden, chief executive of the Society of British Aerospace Companies, said: “It is a disappointment that the Chancellor has neglected to include an injection of much-needed funds for the UK defence industry and our Armed Forces in his speech announcing a £3 billion investment package on infrastructure projects.”
The MoD, however, has already had extra financial help from the Treasury to buy more armoured vehicles off the shelf to provide better protection for troops in Iraq and Afghanistan. The most recent cash injection from the Treasury was for £500 million.
The bulk of the two military campaigns in Iraq and Afghanistan is also paid for out of Treasury reserves.
The financial burden caused by the two campaigns will be underlined on Tuesday with new figures expected to show that the combined cost now exceeds £12 billion.
The MoD is due to publish the cost estimates for the two wars for 2008/2009 and there is expected to be a steep increase on previous years because of the urgent requirement to buy more armoured vehicles.
So far the campaign in Iraq has cost £6.4 billion between the financial years 2002/2003 and 2007/2008, and the war in Afghanistan, just over £3 billion in the same period. The cost of Iraq and Afghanistan for 2008/2009 will be released in the MoD’s winter estimates.
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