For much of the last decade, governments around the world have been slashing defence expenditure. But that peace dividend, brought on by the end of the Cold War, is being challenged as armed forces worldwide assume a new role - that of rapid reaction forces, light, mobile and ready to deploy at a moment's notice.

But the biggest problem they face is getting the equipment they need as governments and treasuries strive to spread the taxpayers' money as far as possible while ensuring worthy causes such as health and education do not go begging. In the USA, all three major fighter programmes face the budget squeeze. And in Australia all major defence acquisition programmes are under the microscope.

And to add to the job of balancing defence spending with other calls on government money is the need to consider national foreign policy aspirations. Lending a helping hand in the world's troublespots, be they the result of natural disaster or other strife, is part and parcel of being an international player in the geopolitical power stakes.

The ever-widening gap between defence capability aspirations and coffers is increasingly noticeable in the UK. The Ministry of Defence's budget is falling year on year, but the armed forces are required to perform more and more operations, the latest of which is a deployment to Sierra Leone to rescue UK, European and Commonwealth citizens while also stabilising the United Nations' peacekeeping force.

The MoD has been forced to remove the cannon from its Eurofighters, is planning to restrict the engine's power for training and is known to be considering further changes in an attempt to make the programme less expensive. Purchase and initial support of 232 Eurofighters will cost £11.4 billion ($17.8 billion) - dropping the gun will save a miserly £54 million over the first 10 years of service. Attacking Eurofighter's costs may be justifiable, but the aircraft must remain a credible fighter that can operate successfully and without endangering its crews when called upon to take part in operations.

Eurofighter's travails come at the same time as the MoD has been forced to delay selecting a winner of a beyond visual range air-to-air missile for the RAF's new fighter as well as its strategic transports because of ongoing talks with the Treasury. The latter appears to have neglected the fact that re-equipping will cause an investment hump in the short term, but result in better equipped, cheaper-to-operate armed forces in the medium term.

These programmes are not the only examples suffering delays as the MoD attempts to juggle its books to pay for operations and acquire new equipment. Timescale slippage not only affects the armed forces, but also the industry which supplies them. If a manufacturer is bidding in three or four competitions, it will plan its production capability, and hence the costs of the equipment, on the orders it expects to win. If it expects to receive a number of major contracts, it may seek other ways to participate in other procurement battles, which means that if the expected orders are not forthcoming, factories could stand empty, and, in extreme cases, be closed. Outside the aerospace industry, this can already be seen. If the Royal Navy's transport ships are not built in the UK, will there be the shipyards to build the RN's new aircraft carriers at the end of this decade?

Stretching competitions also costs the companies more, which, in the long run, makes the winning bid more expensive as costs have to be recouped in some way. It also delays service entry as development timescales often cannot be shrunk to meet original in-service dates. All of which makes a mockery of the UK's ongoing acquisition reform. The so-called Smart Procurement initiative is advertised as a "better, quicker, cheaper" means to buy equipment. At present it is not quicker because of the delays, it will not be cheaper and the better is debatable.

Balancing the books is always a worthy occupation, particularly when taxpayers' money is at stake. But it should be remembered that balance means equally weighted between both sides of the argument - or in other words not unequally favouring the beancounters over the fighters.

Source: Flight International