Major reforms to UK defense spend coming: Fox

By Rhys Jones

FARNBOROUGH, England (BestGrowthStock) – Britain can’t pay for its defense plans and major reforms will be made to its armed forces and the way they buy military equipment, defense secretary Liam Fox said.

“The current defense 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 defense budget as part of a broader move to cut a massive budget deficit.

Analysts said the Strategic Defense and Security Review (SDSR) will lead to cuts of up to 15 percent in the defense budget — 36.9 billion pounds ($56 billion) for the current financial year — with major procurement programs set to be scaled back.

“We will reform acquisition processes and have a 10-year planning horizon for costs cuts,” said Fox. “There will be a new defense 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 defense 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 defense exports.”

King said the government needed to consider the economic benefits for Britain of future defense orders.

U.S. defense company General Dynamics earlier this year beat BAE to a contract to build a new light tank for the British army.

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(Reporting by Rhys Jones; Editing by Dan Lalor)

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Major reforms to UK defense spend coming: Fox