Britain can not pay for its defence plans and major reforms will be made to its armed forces and the way they buy military equipment, said defence secretary Liam Fox.
“The current defence programs are entirely unaffordable and the unavoidable reality is that change is coming,” Fox told reporters at the Farnborough airshow on Tuesday.
“The armed forces need to be reconfigured to meet the needs of new security environment but there will be major reforms to our armed forces procurement practices.”
Britain is reviewing its defence budget as part of a broader move to cut a massive budget deficit. Analysts said the Strategic Defence and Security Review will lead to cuts of up to 15 percent in the defence budget — 36.9 billion pounds ( US $56 billion) for the current financial year — with major procurement programs set to be scaled back, reports Reuters.
“We will reform acquisition processes and have a 10-year planning horizon for costs cuts,” said Fox. “There will be a new defence industrial strategy published this year after the spending review has been concluded. But the industry will need to help us by cutting costs and improving efficiency.”
BAE Systems chief executive Ian King said a new approach to defence spending was required, and called for closer cooperation between the government and industry on future spending plans and exports.
“We need to break some of the shackles between industry and government and we require companies to break barriers to efficient business through innovation and outsourcing,” said King. “What we also need is a government-industrial partnership in pursuit of more defence exports.”
King said the government needed to consider the economic benefits for Britain of future defence orders.
U.S. defence company General Dynamics earlier this year beat BAE to a contract to build a new light tank for the British army.