defence

Has Michael Gove’s discreet approach to budget negotiations paid off? Education bravely resisted the shroud waving that marked the defence review. But it looks like Gove has emerged with a better deal than Fox, at least in terms of his resource budget.

We already know that schools spending — based on the Ed Balls baseline — will rise in real terms (albeit by a tiny amount). Today’s surprise will be that the education department will win the best settlement of all the unprotected departments. That means its resource budget will be cut by less than the 7.5 per cent imposed on defence. When it came to a stand-off between kids and frigates, the kids appear to have prevailed.

Now, as with all settlements announced today, the headline figure mask a great deal of pain. Spending channelled through local authorities (such as children’s services) will suffer. So will spending on 16 to 19 year olds. And of course the resource settlement does not include the education capital budget, which is about to be thumped. 

There have been two official accounts of the Clegg-Biden phone call on Tuesday and one notable difference of emphasis.

Nick Clegg’s account of the “videoconference” explained that it touched on “Pakistan flood relief, Afghanistan, Iraq and the Middle East Peace Process”. 

Option: Cut the officer corps of the armed forces by a quarter, returning the ratio of top brass to lower ranks the 1 to 7 level that prevailed through the cold war.

Saving: In salary alone, the saving is around £400m a year. There are then knock on savings from bonuses, housing costs, private school fees, the entourage, the offices, travel costs, training, the pension etc.

The case for a cut: Britain’s armed forces are more top heavy with officers than at any point in the 20th century. As the armed forces have shrunk in size, the lower ranks have suffered more than the officer corps. It now looks terribly unbalanced. The ratio of officers to lower ranks has fallen from 1/10 in the Second World War, to 1/7 in the cold war, to 1/6 through the late 1990s, to 1/5 today. There was no strategic decision to change this structure — it is a symptom of a bureaucracy protecting those at the top at the expense of efficiency. Most striking is the trend since 1997, which is shown in the chart below. Senior officers (colonel and above) have increased by 8 per cent, while the lower ranks have been cut by 12 per cent. What is the rationale for that? There are now more admirals than active warships and two-fifths as many RAF officers of one star and above as there are in the US Air Force, which is roughly eight times the size. 

The competition is fierce. But this must be a contender for the worst question ever asked — or should I say not asked — at a select committee hearing.

Just take a look at James Arbuthnot’s forensic examination of Liam Fox’s position on the withdrawal of troops from Afghanistan: 

Formally, the shots have yet to be fired in the battle for Whitehall spending cuts, but the Treasury has already set the terms of its looming battle with the Ministry of Defence. A little-noticed but ominous sentence in the new coalition programme has put the armed forces on notice that the axe is about to cut even more deeply than they imagined into the defence budget.

Whitehall insiders are predicting a programme of retrenchment as significant as that marked by the withdrawal “East of Suez” announced by Harold Wilson’s government in 1968. Then, as now, the trigger was a crisis of international confidence in the nation’s finances.