The Dreadnought programme will far outstrip the MoD’s allocated budget of £41bn and is ‘not fit for purpose’, according to the National Audit Office and Public Accounts Committee assessment this year. BASIC’s new report illustrates in clear detail the cost risk of Trident renewal to the UK’s Defence budget; Dreadnought’s through life costs are likely to be between £110-14bn.
Toby Fenwick, the author said, ‘It is regrettable that the Government’s Trident cost estimates have consistently been underestimated. The MoD will likely blow its budget given historical decisions and the fall in sterling since Brexit. Combined with mounting time pressures, the UK needs to take urgent action if it to maintain Continuous At-Sea Deterrence’
Paul Ingram, BASIC Director said, ‘The UK needs to face up to the harsh realities of Trident renewal. Parliamentarians did not vote for renewal with a spending black hole that undermines the UK’s conventional forces. It is time for an honest debate on cost of Trident and the strategic rationale of the UK’s nuclear forces.’
The report reveals the real risk that Dreadnought cost overruns will mean further cuts to the MoD’s procurement budget for conventional forces. More delays could require further life-extension of the Vanguard submarines if the UK is to maintain Continuous At-Sea Deterrence, with significant additional unbudgeted costs for the UK. Project risks are exacerbated by the fall in the value of sterling against the US Dollar in the aftermath of the Brexit Referendum, increasing the costs of US-sourced components by 8-10%. Further falls in sterling’s value will proportionally increase Dreadnought costs.
Short of a sustained sterling rally and absent a significant increase in defence spending, the MoD will blow its budget. The Government will either have to reconsider the Defence Equipment Budget, reconsider the strategic rationale for Continuous At-Sea Deterrence, or move to minimum deterrent alternatives to the Dreadnought class.