UK defence budget is 'unaffordable': BAE Systems boss
The head of Britain's premier shipbuilder has issued a stark warning: we cannot go on with such a large defence budget.
Alan Johnston, managing director of BAE Systems Surface Ships, was speaking at the opening of the massive International Naval Engineering Conference at Portsmouth Naval Base.
Delivering the keynote address to an audience of around 400 international delegates yesterday, he admitted the UK faces big defence cuts, and to protect the navy, BAE would have to trim costs.
He said: 'We recognise there is going to be a strategic defence review. This is expected, and must go hand in hand with a foreign policy review - an examination of what the UK wants to do with its armed forces.
'As in many countries, the current UK defence budget is unaffordable, with a projected deficit of 36bn.'
He cautioned that uncertain times lay ahead, and further warned that if they fail to make building and maintaining the current naval fleet more affordable for a cash-strapped government, the results could be catastrophic.
'If we fail to seize the moment, the ultimate costs will be far greater to us all,' he said.
The focus will be on making money spent on ship maintenance and service manpower go further, something which could ultimately hurt jobs in Portsmouth, where about 1,500 of the staff at the naval base work on such support projects.
He said: 'The warship industry is delivering sophisticated, high-class vessels. But they are expensive, no matter how you class expensive.
'However, the cost of designing, building and putting it in the water tends to be somewhere in the region of 20 to 30 per cent of its through-life costs...
'It's evident that major advances in delivering the affordable fleet of the future must come from increasing cost-effectiveness of its in-service support.'
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Wednesday 23 May 2012
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