Jake1992 wrote:The potential lunacy of this approach though is that the MOD could end up paying out the same as they would if they just ordered more ships but end up with less, we saw this with the Astutes where by slowing down the build to stretch it out till the Dreadnoroughts were ready cost the same as building 8 but only ended up with 7.
I agree it doesn't make sense.
Is it just a way to ensure the number of RN vessels doesn't exceed a certain level so that overall running costs can be keep down and therefore the 2%GDP is deemed to be enough?
Looking at it from a sinicall point of view I do belive it's seen in HMG and the treasury particularly that the 2% is more than enough and that if they could find more ways to cut real term defence budgets but still maintain that 2% figure on the face of it they would.
The problem is defence is not a vote winner it's the unseen unheard nasesity but doesn't get votes. Governments off all colours only think short term ( what will get us back in in 5 years ) that can't be done in defence and maintain a steady coherent plan, defence is a 10 to 20 year planning cycle. This is why I quite like the US way of doing it they put forward what they need and what it costs and congress say yes or no and then how and when that budget is spent is down to each branch
Poiuytrewq wrote:Is it just a way to ensure the number of RN vessels doesn't exceed a certain level so that overall running costs can be keep down and therefore the 2%GDP is deemed to be enough?
No. Budgets work on yearly cycles, each year the treasury need to show a decline in the deficit, so projects get stretched out to make the annual spend lower.
It wouldn't be the modern slashed forces if it wasn't an excellent platform hamstrung and left with a fraction of its potential, would it...
First it was a cut from 13 to 8, now it's a decade for one ship. And good luck getting the treasury to fund an anti-ship missile to bridge the 4-5 year gap before FC/ASW, harder to pitch than a decade gap.
The idea of a ship entering service 2027 with that budget and still using only an Artisan too...yeesh. If they're going to delay it that long, you'd think theyd use the time to refit the design into something more akin to the era it'll be serving into.
Ron5 wrote:
That was the Bae proposal i.e. place a contract for all 8 and they'll be delivered earlier and save at least half a billion.
The funding profile won't be a secret, both in terms of committed and uncommitted lines. Bae could put a 'buy one get one free' sign up if they propose something so far outside the designated funding within a overheated EPP, it could never be taken up.
The profile shouldn't have changed from Main Gate. If this is a change and timelines have been extended either the RN has had to take money out in the early years to help fund here and now issues, moving the money back, or haven't managed to spend the in year cash up to now and have had to slip costs. Beyond the money there is a political interest in keeping something going on in those yards.
Be interesting to see how obsolescence management is going to be done, with such a long build time and the use of in service equipment.
RetroSicotte wrote:It wouldn't be the modern slashed forces if it wasn't an excellent platform hamstrung and left with a fraction of its potential, would it...
First it was a cut from 13 to 8, now it's a decade for one ship. And good luck getting the treasury to fund an anti-ship missile to bridge the 4-5 year gap before FC/ASW, harder to pitch than a decade gap.
The idea of a ship entering service 2027 with that budget and still using only an Artisan too...yeesh. If they're going to delay it that long, you'd think theyd use the time to refit the design into something more akin to the era it'll be serving into.
HMS Glasgow enters service in 2025, and becomes fully operational in 2027 - and this according to a parliamentary response where they take into account full contingency plans. This is hardly a decade...
According to a BAE Managing Director, HMS Glasgow will hit the water by the end of 2020.
Ron5 wrote:Yeah, Bae should be scouring the world for customers for their nuclear submarines & their 70k ton carriers. Must be dozens out there.
They have the accumulated design libraries of all the companies that they have swallowed up over the years. VT brought in a whole range of lighter frigates and patrol craft designs that could have been developed (the Rivers and the Vita/ Super Vita range are both VT designs). Have they done any market research, to find out what potential clients might want? What marketting have they done? Where is the library of concepts that Damen or Lurssen or even little old BMT have available? Why did it take an RN competition for them to (reluctantly) trot out the three concepts that they have for developing River-based designs. Where is the consultancy to assist smaller countries with developing their own ship-building capabilities, using license built designs? Many industries recycle older products into new markets (car manufacturers and the record industry spring to mind). Generically, it's called "exploiting your back catalogue". It is not an unusual concept.
Ron5 wrote:As for investing more in their frigate shipyards, that really makes a lot of sense.
To a commercially-minded company, investment to reduce future overheads and to make yourself a more desirable business partner always makes sense. BAE Shipbuilding is not commercially minded.
Ron5 wrote:Plus a National Strategy that says the order for Type 31's should go to any company but Bae.
Because BAE is not trusted to bring two first-of-class vessels into commission at the same time. No single ship-builder has ever done that before and BAE Shipbuilding has not demonstrated any particular ability to be different in that respect. Perhaps if they had spent some of the fallow years building light frigates, or even just project managing builds, for third parties, they would be getting the T31 project as well. After all, they were supposed to be investing in that sort of skill and capability.
Ron5 wrote:Truth is, any sucker is welcome to buy the frigate business from Bae. Please form an orderly line.
Have they offered it for sale? I doubt they are that keen to give up a monopoly position that brings in £230m a year, even if you do nothing. What do you think that money was supposed to be for, if not modernising their facilities and maintaining skill sets? It was couched as a "minimum order value per year" deal to avoid falling foul of the EU's rules on state subsidy of private enterprises, but it was still a subsidy (and we still got over-charged for the B2 Rivers - another "hidden" subsidy).
The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.
Winston Churchill
matt00773 wrote:HMS Glasgow enters service in 2025, and becomes fully operational in 2027 - and this according to a parliamentary response where they take into account full contingency plans. This is hardly a decade...
2017 construction start to 2027 in service isn't a decade, how?
shark bait wrote:No. Budgets work on yearly cycles, each year the treasury need to show a decline in the deficit, so projects get stretched out to make the annual spend lower.
That's it in a nutshell. The government only really cares about annual cost because the government is funded annually. It doesn't really matter to them if stretching out a project increases the overall cost as long as the annual cost is within budget. It's a pretty rubbish short-termist way of dealing with government spending and longer term planning would be preferable. However, the unpredictability of global events make that difficult, particularly when you're trying to eliminate a structural deficit.
matt00773 wrote:HMS Glasgow enters service in 2025, and becomes fully operational in 2027 - and this according to a parliamentary response where they take into account full contingency plans. This is hardly a decade...
2017 construction start to 2027 in service isn't a decade, how?
<On Treasury>
For me, blaming Treasury is pointless. They need to build-up the budget, so it is the HMG and MOD who are responsible for everything.
For example, T45 was cut from 12 to 8, and then to 6. What Treasures insisted is that there is only a fixed budget, (because HMG did not increase TAX or cut other field). Simply the cost rise resulted in reduction in number, and Treasury cut nothing. This tells us that Treasury does not care about the number.
Also for the Astutes, I do not believe we could build boat-8, with the current budget prepared for 7 boats. To build SSN, we need many other equipments to buy, which is unrelated to the fixed cost. Also, operation/maintenance cost for 8 boats will never be the same as those for 7 boats. (But, it will surely be "less than" 8.0/7.0 = 14% increase. May be 10-12% (just guess).)
In the current T26 case, slow build increased the ratio of "fixed cost", just as expected. Because HMG do not increase TAX nor cut health and education (I think the latter is more important), the total budget is not increasing a lot. So, HMG is no helping a lot (I understand defense secretary is trying hard).
So, the only player to change the issue is MOD. (note, Treasury is NOT a player here).
<On "less than 19 escort" idea>
This is why I am proposing to rob Peter to pay Paul. Cut T31e to pay T26. Note, T26 is a ~20 year program with ~8B GBP budget (2017-2037) = 400M GBP per year. T31e is a 10 year program (2018-2020) with 1.25B GBP = 125M GBP per year. It is NOT small.
In hate of BAES monopoly, or in fear for Scottish independence, T31e is there. For sure, it is "inefficient investments", at least from technical point of view. In political point of view, it can differ. But, I am always surprised that many here ignores that Babcock has its own TOBA. It is not only BAES.
<On T31e program, as an export oriented design>
Babcock DOES exported OPVs. At the same time, BAES does exported Khareef-class corvettes (but actually, it was VT). BMT is good, but it is good as a design office, not a builder.
But, anyway, exporting MUST be subsidized by HMG. (See Saudi Arabia, Quatar and Kuwait.)
If T31e needs to survive (to counter hating BAES monopoly etc), then HMG/MOD must promote T31e much more for export. Because of TOBA, both BAES and Babcock has its basic income secured. This is bad, because as much as they export, the income from HMG will just decrease. So, HMG must provide some incentive.
I believe allowing (say) "half of the TOBA budget to be given from HMG, to make export Corvette/Light frigate cheaper" (in other words, "subsidize") shall be adopted. I believe this is not much different from what France is doing.
MOD/RN can get a great merit as
- well-trained skilled labor, designer, engineer, and market sales team.
- well-evolved and proven sets of technologies, and good future foresight for "next generation" assets
- well invested factory for ship build, and well advanced "approach of building", as we see in Daman and Naval groups brochure
The drawback will be
- always need to take care of export, so "big high-end asset" may become more difficult (I think the reason why France went with FTI and stopped FREMM build). In other words, always need T31e like "light" design.
- export variant will look cheaper than national variant. Looking at French approach, this looks very reasonable, actually.
Also, I think T31e shall better be more smaller, to be on the largest end of heavy corvettes. Mission bay is particularly unpopular for export, neither long range/endurance. Export customers can just ban mission bays amidship, and fill VLS there. Also, "looking fighty" is very important for export, as well. Not much oriented on RN use. The LAST successful export frigate was VT series, T21, Niteroi, Iranian, and Libyan. Among them, Niteroi was a great success, I believe. Although T21 was not good, what if it was Niteroi class as T21?
Stupid idea? May be. But, T31e is, I think, designed in this way.
Poiuytrewq wrote:Can anyone tell me why the T31 can't be based on a T23 hull?
I see no technical reason why not. The Burke is as old as the T23 and they're still building them, albeit an updated version.
The T23 is even receiving a new propulsion equipment, including new main diesel gen-sets and power systems, so the basic hull and machinery could be copied straight over. The gas turbines would give the biggest headaches, I dont think there is a similar sized engine that is still well supported. Could give it an upgrade to the RB211 and get a seriously fast ship then!
donald_of_tokyo wrote:<On Treasury>
For me, blaming Treasury is pointless. They need to build-up the budget, so it is the HMG and MOD who are responsible for everything.
Well that's a daft comment the treasury is the department that decided, allocates and then mandates a yearly spending limit, putting the blame soley at the MOD and HMG is very disingenuous and let's the treasurey off for its miss manigmrnt of public funds ( them looking short term, getting tax payer less for more in the long term )
Perhaps it is not well known, outside these islands, that the aspiring PMs try their hand in balancing conflicting demands in the n:o 2 post, being the Chancellor?
- not all, and most not for very long (get marked as "Fails")
- on the other hand , in Germany, if you have made it to Chancellor... then there isn't another one, sitting on the money chest, and blocking you all the way
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)
donald_of_tokyo wrote:<On Treasury>
For me, blaming Treasury is pointless. They need to build-up the budget, so it is the HMG and MOD who are responsible for everything.
Well that's a daft comment the treasury is the department that decided, allocates and then mandates a yearly spending limit, putting the blame soley at the MOD and HMG is very disingenuous and let's the treasurey off for its miss manigmrnt of public funds ( them looking short term, getting tax payer less for more in the long term )
Completely disagree. Treasury is "tasked" to build up the budget. If you let MOD and RN do it, only many debt will come in. IF, RN needs more budget now, it is NOT Treasury's task, it is HMG's task (including decide to increase debts). IF, RN has only fixed budget now, HOW TO EFFICIENTLY USE IT is MODS's task, not Treasury's task.
[EDIT] If you hate annual budget idea, it is ALSO HMG's task to make the budget 5 years basis, nor 1 year.
donald_of_tokyo wrote:<On Treasury>
For me, blaming Treasury is pointless. They need to build-up the budget, so it is the HMG and MOD who are responsible for everything.
Well that's a daft comment the treasury is the department that decided, allocates and then mandates a yearly spending limit, putting the blame soley at the MOD and HMG is very disingenuous and let's the treasurey off for its miss manigmrnt of public funds ( them looking short term, getting tax payer less for more in the long term )
Completely disagree. Treasury is "tasked" to build up the budget. If you let MOD and RN do it, only many debt will come in. IF, RN needs more budget now, it is NOT Treasury's task, it is HMG's task (including decide to increase debts). IF, RN has only fixed budget now, HOW TO EFFICIENTLY USE IT is MODS's task, not Treasury's task.
[EDIT] If you hate annual budget idea, it is ALSO HMG's task to make the budget 5 years basis, nor 1 year.
The treasury has a lot more independence from HMG that people think when it comes to setting budgets and how each departments should spend them ( been accused by other departments ministers over recent years of over stepping there remit )
We can see this when it came to moving items in to the defence budget ( CASD pentions ect ) this was Osborns doing not The PM. Over the last 20 years in the country we have seen the chancellor becoming ever more powerful with in government.
I agree that HMG needs to set a better budget lay out for the MOD not the yearly over look it has now, but this is where you misunderstand British politics there iOS only the PM above the chancellor and a lot and I mean a lot is deligated to the treasury to manage it is they who set the budgets and that it must be managed yearly not the PM ( yes she can over turn them per say but tends to leave it to the treasury )
It is not a case of increasing taxs or debt the money is there as you've pointed out the budget set, but it is not set at to what date each amount has to be spent ( that's the treasurys doing for yearly book keeping )
Poiuytrewq wrote:Can anyone tell me why the T31 can't be based on a T23 hull?
I see no technical reason why not. The Burke is as old as the T23 and they're still building them, albeit an updated version.
The T23 is even receiving a new propulsion equipment, including new main diesel gen-sets and power systems, so the basic hull and machinery could be copied straight over.
It seems strange that this hasn't been considered as an option. It would appear to be an obvious solution and a good starting point for the T31.
Jake1992 wrote:The treasury has a lot more independence from HMG that people think when it comes to setting budgets and how each departments should spend them ( been accused by other departments ministers over recent years of over stepping there remit )
We can see this when it came to moving items in to the defence budget ( CASD pentions ect ) this was Osborns doing not The PM. Over the last 20 years in the country we have seen the chancellor becoming ever more powerful with in government.
Then, why not PM fired Mr Osborn? It is PM's responsibility who assign Mr Osborn to Treasury.
( yes she can over turn them per say but tends to leave it to the treasury )
This is what I mean. If UK want to increase debts, you can, just like Churchill did around 1938. Just make a law as such. No problem.
It is historical reasons why budget is annual. It is historical reason why Treasury is so stubborn.
And, what is more, HMG and MOD knows it. It is not falling down from the sky. If MOD person says, "I didn't know the budget is limited annually", he/she is lying. He/she shall have understood the situation from years ago, and must have decide to cut A, to make B more efficient.
For example, HMG/MOD decided to stand up the T31e program, to "keep the frigate number", to "break the BEA monopoly", to "mitigate the Scottish independence risk". And, this decision is expensive at least in short time scale, because it is intentionally introducing immediate inefficiency, for sure.
Astute is the same. Someone decided, discontinuity of SSN build is much more critical than "not able to have boat-8". For sure, it is NOT Treasury. And, who knows it is wrong decision?
If someone insists on building boat-8, why not he/she claims to cut 10 F35B to do it?
Jake1992 wrote:Well that's a daft comment the treasury is the department that decided, allocates and then mandates a yearly spending limit, putting the blame soley at the MOD and HMG is very disingenuous and let's the treasurey off for its miss manigmrnt of public funds ( them looking short term, getting tax payer less for more in the long term )
Honestly, you really do need to go and read up on the British constitution. Government spending is governed by the budget, which is approved by Parliament. To prepare that Budget, each Ministry prepares its budget requirements on an annual basis (the same as every Government and company on the planet), this budget is based on what every department in the Ministry considers it needs in order to meet their legal and policy obligations (said policy will have gone through a process of Parliamentary approval, or Cabinet approval followed by Parliamentary scrutiny) as well as future policy initiatives. How that budget is built and apportioned is entirely the responsibility of the Minister responsible for that department.
The Cabinet discusses it, at which point the Treasury gets to advise how much money is expected to be available from tax revenues, what to do about meeting shortfalls and (rarely) allocating surplusses. The Cabinet then approves Budget allocations at Department level, dependent on how much money the Government is expected to raise over the coming financial year. Departmental spending request always exceed the money available, so no-one gets everything they want.
At that point, each of the Ministries then adjusts it's notional budgets to meet the reality of their spending award and apportions money to each of it's sub-departments (each headed by a junior minister etc, down the line), each of which then decides how to re-allocate money against it's desired budget, trimming, eliminating and deferring (so that they will then appear in a future spending round) spending lines as needed. It is during this process that the decisions are made about individual projects. The Treasury is not involved at this level - it has agreed a feasible level of overall funding that it feels can be achieved - the Ministry/ Department/ sub-departments are all responsible for sticking to their own budgets and spending it wisely.
Consider this process being repeated internally in every Department and sub-department in Government, as they each compete to get their slice of the pie..
The revised and approved (by Cabinet) budgets are then gathered into the national Budget, which is then put before Parliament as a whole and voted on. It only becomes Law after Parliamentary approval and is then spent under Parliamentary oversight.
After that, the Treasury then has to provide the agreed money when needed and within the constraints of Government policy. It has to manage the cash-flow, so that money is there when needed, which it gets through a combination of receipts (mainly tax, but also regulatory fees etc) and by borrowing/ retiring debt when income is inadequate/ excess. It's function is to smooth the peaks and the troughs and provide a constant stream of income for the spending departments, not provide it, for instance, in October of the following year, when the majority of the corporation tax actually gets paid in.
The Treasury does not get involved in the administration of each department's budget - that is up to the Minister responsible and the departmental civil service. So yes - spending the MOD budget is entirely the responsibility of the MOD - no-one else.
Edit: My post crossed with others.
The PM 's official title is "First Lord of the Treasury". They are the Treasury's boss. As for the Chancellor of the Exchequer interfering - that's true, but that will have primarily been at Cabinet level (they would have no authority to do so without Cabinet approval) and reflects more on the individual characters involved. In recent years we seem to have had a run of political conjoined twins in the two posts. Brown/Blair (who started the rot, with Blair unable to stand up to Browns overbearing nature) and Osborn/Cameron (frankly not the brightest buttons we've ever had in the job and needed each other to stay in post - one brain between the two of them). Without the distraction of Brexit, May might have had the political capital to start to take back control, but maybe not. I certainly can't imagine Lawson telling Thatcher what to do
The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.
Winston Churchill
Jake1992 wrote:The treasury has a lot more independence from HMG that people think when it comes to setting budgets and how each departments should spend them ( been accused by other departments ministers over recent years of over stepping there remit )
We can see this when it came to moving items in to the defence budget ( CASD pentions ect ) this was Osborns doing not The PM. Over the last 20 years in the country we have seen the chancellor becoming ever more powerful with in government.
Then, why not PM fired Mr Osborn? It is PM's responsibility who assign Mr Osborn to Treasury.
( yes she can over turn them per say but tends to leave it to the treasury )
This is what I mean. If UK want to increase debts, you can, just like Churchill did around 1938. Just make a law as such. No problem.
It is historical reasons why budget is annual. It is historical reason why Treasury is so stubborn.
And, what is more, HMG and MOD knows it. It is not falling down from the sky. If MOD person says, "I didn't know the budget is limited annually", he/she is lying. He/she shall have understood the situation from years ago, and must have decide to cut A, to make B more efficient.
For example, HMG/MOD decided to stand up the T31e program, to "keep the frigate number", to "break the BEA monopoly", to "mitigate the Scottish independence risk". And, this decision is expensive at least in short time scale, because it is intentionally introducing immediate inefficiency, for sure.
Astute is the same. Someone decided, discontinuity of SSN build is much more critical than "not able to have boat-8". For sure, it is NOT Treasury. And, who knows it is wrong decision?
If someone insists on building boat-8, why not he/she claims, to do it, let's cut 10 F35B to do it?
Osborn is no longer an mp the chancellor is now Phillip Hammond but he is off the same mined set, the PM can't get rid of him ( even if she wanted to ) as she is in a very weak position politically and could be very easy ousted her self.
It's not about increasing debt or taxs, as you said your self the budget is there and it is set, but it is not set at what amount of that budget can be spent when this is only put in place by the treasurey to keep the yearly books even ( short term gains for long term pain ) this is Hammonds way of thinking he is known as spread sheet phill over here.
With regards to 8th Astute the select committee was using it as an example of the waste incured through the treasurey way of spending through the course of the projecte. It was estimated that the extra cost incured by the political slow vie inefficiencies caused by the slow down compared to the efficentcies that would of happened if allowed to to built as natural amounted to enough for an 8th boat of wanted ( so about £1.3bn )
This was also shown through the QEs where it was estimated at around £1bn extra through the same cause
So, MOD was meeting the long term budget (good), but failed to meat the annual budget profile (bad). It is their failure, not Treasury. Treasury is just there to say no, to something it cannot be done.
Also, I remember Treasury has proposed the Army to "borrow a budget from future, to fill the gap now". Debt. don't you think it is a good idea?
Of course, Army did not go that way, because surely they need to pay for the interest. Clever.
Yes, every debts has interest = inherently inefficient.
[EDIT] on the astute issue, simply "the select committee" guys were not powerful enough to CUT health budget, or raise a donation, to keep the annual cost to build Astutes. It is their fault. If budget has a deficit, HMG needs to increase debts. And, HMG decided that increasing debts in that years is inefficient than having boat-8. Clear.
donald_of_tokyo wrote: I think T31e shall better be more smaller, to be on the largest end of heavy corvettes. Mission bay is particularly unpopular for export, neither long range/endurance. Export customers can just ban mission bays amidship, and fill VLS there. Also, "looking fighty" is very important for export, as well.
I agree with a lot of your analysis Donald especially concerning the export potential of Corvettes but do RN really need a class of Corvettes or Frigates?
Going by previous history the obvious answer is Frigates but if RN is moving towards a forward basing strategy to offset the movement of resources towards enabling Carrier Strike just maybe shorter range heavily armed Corvettes may work. If not, it would be asking RN to have 5 heavy corvettes that they don't want or need.
My question would be, if you were to design the perfect export oriented heavy corvette that you described above, what would the spec look like and are you confident 5 such vessels could be built for £1.25bn?
HMT are part of the approvals process at the investment decision points on all Category A projects. Anything Category B or below is within the MOD delegated authority, although HMT can change that from project to project and have its say.
I think the delegation is about £400m on equipment from memory.
They certainly have a scrutiny role and the budgets and profiles are agreed, along with things like the key requirements. Keep true to all that and no issue, once you get into review note territory I have no doubt their interest increases.
Jake1992 wrote:Well that's a daft comment the treasury is the department that decided, allocates and then mandates a yearly spending limit, putting the blame soley at the MOD and HMG is very disingenuous and let's the treasurey off for its miss manigmrnt of public funds ( them looking short term, getting tax payer less for more in the long term )
Honestly, you really do need to go and read up on the British constitution. Government spending is governed by the budget, which is approved by Parliament. To prepare that Budget, each Ministry prepares its budget requirements on an annual basis (the same as every Government and company on the planet), this budget is based on what every department in the Ministry considers it needs in order to meet their legal and policy obligations (said policy will have gone through a process of Parliamentary approval, or Cabinet approval followed by Parliamentary scrutiny) as well as future policy initiatives. How that budget is built and apportioned is entirely the responsibility of the Minister responsible for that department.
The Cabinet discusses it, at which point the Treasury gets to advise how much money is expected to be available from tax revenues, what to do about meeting shortfalls and (rarely) allocating surplusses. The Cabinet then approves Budget allocations at Department level, dependent on how much money the Government is expected to raise over the coming financial year. Departmental spending request always exceed the money available, so no-one gets everything they want.
At that point, each of the Ministries then adjusts it's notional budgets to meet the reality of their spending award and apportions money to each of it's sub-departments (each headed by a junior minister etc, down the line), each of which then decides how to re-allocate money against it's desired budget, trimming, eliminating and deferring (so that they will then appear in a future spending round) spending lines as needed. It is during this process that the decisions are made about individual projects. The Treasury is not involved at this level - it has agreed a feasible level of overall funding that it feels can be achieved - the Ministry/ Department/ sub-departments are all responsible for sticking to their own budgets and spending it wisely.
Consider this process being repeated internally in every Department and sub-department in Government, as they each compete to get their slice of the pie..
The revised and approved (by Cabinet) budgets are then gathered into the national Budget, which is then put before Parliament as a whole and voted on. It only becomes Law after Parliamentary approval and is then spent under Parliamentary oversight.
After that, the Treasury then has to provide the agreed money when needed and within the constraints of Government policy. It has to manage the cash-flow, so that money is there when needed, which it gets through a combination of receipts (mainly tax, but also regulatory fees etc) and by borrowing/ retiring debt when income is inadequate/ excess. It's function is to smooth the peaks and the troughs and provide a constant stream of income for the spending departments, not provide it, for instance, in October of the following year, when the majority of the corporation tax actually gets paid in.
The Treasury does not get involved in the administration of each department's budget - that is up to the Minister responsible and the departmental civil service. So yes - spending the MOD budget is entirely the responsibility of the MOD - no-one else.
I do know very well how the political system works and how yearly budgets are allocated.
For one there is no written British constitution ( unfortunately ) and the legislation that is often referred to as such has no true baring on HMG yearly budget lay out.
As you said your self each minister will come up with what they see is the required amount for there department and this will in term all be haggled out through the cabinet, consetions will be made on all sides but ultermitly the final say lays with the PM and the chancellor. It is they who on the end decides who gets what.
Parliamentary approval is all but a given due to the fact the the sitting government of the day will hold a majority in one way or another and will whip the budget through, the House of Lords passes that through with out interference due to the fact it is primery legislation.
The treasury set a yearly budget for each department through easy for its self as a yearly budget it much easier for them to over see and manage with a less unpredictable out look. It is well with in there power to set a mutli annual budget for the MODto allow them to spend in what ever manner they see as best, but saddly they do not.
I have read many articals over the last few years that have more than hinted that minister sources have been unhappy with the treasury interfering and over stepping there remit on many ocations
donald_of_tokyo wrote:So, MOD was meeting the long term budget (good), but failed to meat the annual budget profile (bad). It is their failure, not Treasury. Treasury is just there to say no, to something it cannot be done.
Also, I remember Treasury has proposed the Army to "borrow a budget from future, to fill the gap now". Debt. don't you think it is a good idea?
Of course, Army did not go that way, because surely they need to pay for the interest. Clever.
Yes, every debts has interest = inherently inefficient.
[EDIT] on the astute issue, simply "the select committee" guys were not powerful enough to CUT health budget, or raise a donation, to keep the annual cost to build Astutes. It is their fault. If budget has a deficit, HMG needs to increase debts. And, HMG decided that increasing debts in that years is inefficient than having boat-8. Clear.
My understanding of what the select committee was getting is to try and point out that through the treasureys determination of having the MOD stick to a yearly budget spend on these projects instead of a multi annual budget and letting the MOD spend it on what way they see best, these projects ended up incuring extra cost to what they could of through lack of efficiencys
Eg if the MOD for example could of been allowed to spend like this say
Year 1 - £3bn
Year 2 - £3bn
Year 3 - £2bn
Year 4 - £1bn
Year 5 -£1bn
Instead of
Year 1 - £2bn
Year 2 - £2bn
Year 3 - £2bn
And so on
They could of saved money for the same out come
It was more a point to forced yearly budgeted by the treasurey instead of multi annual budgets are cost the MOD and tax payers more
, in Germany, if you have made it to Chancellor... then there isn't another one, sitting on the money chest, and blocking you all the way