Executive Summary

1. Defence Policy

Introduction

Strategic Defence Review

A New Chapter

Performance And Expenditure Records

Policy Papers

Policy Considerations

The Strategic Environment

Policy Priorities

Nato

European Union

Wider Security Interests

Defence Mission

Purpose

How The Mission Is Achieved

Attitude To Personnel

Overall Goals

Defence Planning

Dm A: Peacetime Security

Dm B: Security Of The Overseas Territories

Dm C: Defence Diplomacy

Dm D: Support To Wider British Interests

Dm E: Peace Support And Humanitarian Operations

Dm F: Regional Conflict And Crisis

Dm G: Regional Aggression Against Nato

Dm H: Strategic Attack On Nato

Capabilities And Requirements

Nato Transformation

Defence Capabilities Initiative

Prague Capability Commitment

Eu Headline Goal

European Shortfalls

Table.1: Eu Capability Targets — Shortfalls Remaining, December

European Capabilities Action Plan

2. Armed Forces

Introduction

Number Of Defence Personnel

Civil Servants

Table.1: Civil Service Staff In Post (number And %),-2002

Regular Forces

Table.2: Strength Of The Uk's Regular Forces (number And % Female),-2003

Reserves

Regular Reserves

Table.3: Strength Of The Uk's Regular Reserves (number And % Female),st April

Volunteer Reserves

Table.4: Composition Of The Uk's Volunteer Reserves,st April

Table.5: Strength Of The Uk's Volunteer Reserves (number And % Female),st April

Pay

Table.6: Annual Basic Military Salaries (£‚’£), Fromst April

Personnel Management

Civil Service Reform

Armed Forces Legislation

Armed Forces' Overarching Personnel Strategy

Royal Navy And Royal Marines

Trained Strength

Table.7: Royal Navy/royal Marines — Trained Strength (number And % Female),st January And

Number Of Ships/major Units

Table.8: Royal Navy, Royal Marines And Royal Fleet Auxiliary — Number Of Ships/major Units,st April And

The Fleet

Table.9: The Royal Naval Fleet,

Base Ports

Devonport Flotilla

Faslane Flotilla

Portsmouth Flotilla

Naval Aircraft

Table.10: Number Of Naval Aircraft And Their Roles,st April

Naval Weapon Systems

Sea-launched Missiles

Air-launched Missiles

Torpedoes

Submarine-launched Ballistic Missiles

Guns

Royal Marines — Structure And Roles

Royal Marines Command

3 Commando Brigade Rm

Royal Naval Reserve Training Centres

Table.11: Royal Naval Reserve Training Centres,

University Royal Naval Units

Army

Trained Strength

Table.12: The Army — Trained Strength (number And % Female),st January And

Number Of Major Units

Table.13: The Army — Number Of Major Units,st April And

Regular Army

Table.14: The Army — Regiments And Corps (number Of Regular Units),

Table.15: Army Divisions — Approximate Manpower And Major Equipment Holdings,/2002

Territorial Army

Table.16: The Restructured Territorial Army — Major Units,

Officers' Training Corps

Table.17: Officers' Training Corps — Number Of Cadets By University,

Royal Air Force

Trained Strength

Table.18: The Royal Air Force — Trained Strength (number And % Female),st January And

Number Of Squadrons

Table.19: The Royal Air Force — Number Of Squadrons,st April And

Flying Squadrons And Units

Table.20: The Royal Air Force — Flying Squadrons And Units,

Total Aircraft Strength

Table.21: The Royal Air Force — Total Aircraft Strength,rd May

Air Surveillance And Control Systems

The Uk

Falkland Islands

Regiment Squadrons And Units

Table.22: The Royal Air Force — Regiment Squadrons And Units,

Royal Auxiliary Air Force Units

Table.23: Royal Auxiliary Air Force Units,

University Air Squadrons

Table.24: University Air Squadrons And Air Cadet Air Experience Flights,

Joint Organisations

Permanent Joint Headquarters

Joint Rapid Reaction Forces

Joint Nbc Defence Headquarters And Regiment

Joint Ground-based Air Defence

Joint Helicopter Command

Joint Force Harrier

Defence Academy

Joint Doctrine And Concepts Centre

Logistics

Equipment Capability

3. Defence Expenditure

The Uk Budget

Fiscal Planning

Table.1: The Government's-year Fiscal Cycle

Table.2: The Government's Fiscal Calendar,-2004

Government Expenditure/2003 To/2006

Table.3: Total Managed Expenditure By Government Department (£‚’£m),/2003-2005/2006

Defence Remains A Priority

Table.4: Total Managed Expenditure For The Government's Main Spending Departments (£‚’£m),/2003-2005/2006

Table.5: Total Managed Expenditure For The Government's Main Spending Departments (%),/2003-2005/2006

The Defence Budget

Mod Expenditure Limits

Table.6: Mod Departmental Expenditure Limits In Cash Terms (£‚’£m),/2003-2005/2006

Table.7: Mod Departmental Expenditure Limits On Resource Budgeting Basis (£‚’£m),/2003-2005/2006

Table.8: The Mod's Total Budget On Resource Accounting Basis (£‚’£m),/2003-2005/2006

Little Growth In Defence Spending

Table.9: Share Of Planned Public Spending Increase Taken By Each Policy Area (%),/2006

Table.10: Average Annual Growth In Departmental Expenditure Limits By Government Department (%),/2003-2005/2006

Public Service Agreement

Aim

Objectives And Performance Targets

Responsibility For Delivery

The Budgetary Regime

Mod Planning Cycle

Top-level Budget Holders

Central

Operational

Manpower

Equipment Procurement

Logistics Support

Trading Funds

Top-level Budgets

Table.11: The Mod's Top-level Budgets (£‚’£m),/2003

Historical Expenditure On Defence Equipment

Sea Equipment

Table.12: Expenditure On The Production And Repair Of Sea Equipment By Sector (£‚’£m),/1998-2000/2001

Land Equipment

Table.13: Expenditure On The Production And Repair Of Land Equipment By Sector (£‚’£m),/1998-2000/2001

Air Equipment

Table.14: Expenditure On The Production And Repair Of Air Equipment By Sector (£‚’£m),/1998-2000/2001

4. Mod Procurement

The Procurement Regime

'smart Acquisition'

The Acquisition Cycle

Table.1: The Mod's Acquisition Cycle,

Concept

Assessment

Demonstration

Manufacture

In-service

Disposal

Integrated Project Teams

Acquisition Stream

The Acquisition Community

Equipment Capability Customer

Table.2: The 'customer' For Defence Equipment By Procurement Phase,

Organisation And Financial Control

Defence Procurement Agency

Financial Approval

Table.3: Defence Equipment Approval Categories,

Investment Approvals Board

Political Approval

Defence Logistics Organisation

Defence Agencies

Public-private Partnerships

Major Projects

Accountability

Current Equipment Programmes

Table.4: Current Defence Equipment Programmes By Sector,st May

Eurofighter Typhoon

Table.5: Eurofighter Typhoon — Uk Cost Estimates (£‚’£m),st March-2002

5. Defence Suppliers

The Global Defence Industry

The Leading Suppliers

Table.1: The World's Leading Defence Suppliers By Estimated Turnover (£‚’£m),/2001

Consolidation In Western Europe

Table.2: Consolidation In The European Defence Industry — A Chronology, January-april

The Uk Defence Industry

Table.3: Companies Paid £‚’£5m Or More By The Mod,/2002

Key Suppliers To The Defence Procurement Agency

Table.4: The Defence Procurement Agency's Key Suppliers,st January

The Financial Times Aerospace And Defence Sector

Table.5: Companies Listed In The Financial Times Aerospace And Defence Sector,st May

Table.6: Selected Leading Uk Defence Suppliers By Market Capitalisation (£‚’£m),st December-2002

The Top Ten Uk Defence Suppliers

Table.7: The Top Ten Uk Defence Suppliers By Defence-related Turnover (£‚’£m And %),

Bae Systems

Company Structure

Current And Future Developments

Commercial Aerospace

North America

Customer Solutions & Support

Programmes

International Partnerships

Avionics

Hq And Other Business

Financial Results

Thales

Company Structure

Current And Future Developments

Financial Results

Rolls-royce

Company Structure

Current And Future Developments

Financial Results

Gkn

Company Structure

Current And Future Developments

Financial Results

Smiths Group

Company Structure

Current And Future Developments

Financial Results

Vt Group

Company Structure

Current And Future Developments

Financial Results

Serco Group

Company Structure

Current And Future Developments

Financial Results

Cobham

Company Structure

Financial Results

Alvis

Company Structure

Financial Results

Ultra Electronics

Company Structure

Current And Future Developments

Financial Results

6. European Industrial Developments

Defence Expenditure

Declining Budgets

Table.1: Nato Military Expenditure† By Region At Constant Prices ($m),-2002

Table.2: Nato Members' Defence Expenditure As A Percentage Of Their Gross Domestic Product,, And

The 'technology Gap'

Force Modernisation

Table.3: Nato Members' Expenditure On Force Modernisation As A Percentage Of Their Total Defence Expenditure,, And

The European Defence Industry

Smaller Supplier Base

Industrial Strategy

Table.4: Co-operation Initiatives In European Defence Procurement — A Chronology,-2001

A European Equipment Market

Uk Industrial Policy

The Defence Sector

Procurement Considerations

Research And Development

Wider Markets

7. Global Defence Market

The World Market

Market Size

The Leading Weapons Suppliers

Table.1: The World's Leading Suppliers Of Major Conventional Weapons By Value Of Transfers ($m And %),/2001

The Leading Weapons Recipients

Table.2: The World's Leading Recipients Of Major Conventional Weapons By Value Of Transfers ($m And %),/2001

Uk Weapons Exports

A Partial View

Table.3: Identified Uk Exports Of Military Equipment By Destination By Value (£‚’£000 And %),

Table.4: Selected Major Identified Uk Transfers Of Military Equipment By Destination,

The Wider Picture

Table.5: Uk Defence Exports By Value (£‚’£m),-2001

Table.6: Uk Defence Exports By Value Of Contracts, Value Of Deliveries And Claimed Share Of World Market (£‚’£m And %),-2001

Customer Base

Table.7: Uk Transfers Of Major Conventional Weapons By Recipient By Value ($m And %),/2001

Defence Export Services Organisation

Table.8: The Defence Export Services Organisation — Profile Of Overseas Offices,/2002

Operating Costs

Table.9: The Defence Export Services Organisation — Operating Costs (£‚’£m),/1998-2002/2003

8. Public Opinion Of The Armed Forces

Introduction

Overview Of Results

Table.1: Attitudes Towards The Armed Forces (% Of Respondents), April

National Service For Men

Table.2: Views On National Service For Men By Sex, Age, Social Grade And Region (% Of Respondents),

National Service For Women

Table.3: Views On National Service For Women By Sex, Age, Social Grade And Region (% Of Respondents),

Protecting Overseas Territories

Table.4: Views On The Armed Forces' Commitment To Protecting Overseas Territories By Sex, Age, Social Grade And Region (% Of Respondents),

Peace-support Activities

Table.5: Views On The Use Of The Armed Forces For Peace-support Activities By Sex, Age, Social Grade And Region (% Of Respondents),

Nato Enlargement

Table.6: Views On Whether More Countries Should Be Joining Nato By Sex, Age, Social Grade And Region (% Of Respondents),

Iraqi Campaign

Table.7: Views On Whether The Uk Was Right To Be Involved In The Iraqi Campaign By Sex, Age, Social Grade And Region (% Of Respondents),

European Defence Capabilities

Table.8: Views On Whether Europe Should Have A Defence Capability Independent Of The United States By Sex, Age, Social Grade And Region (% Of Respondents),

Defence Expenditure

Table.9: Views On Whether Uk Defence Expenditure Should Be Increased By Sex, Age, Social Grade And Region (% Of Respondents),

Role Of Women

Table.10: Views On Whether Women Should Be Allowed To Have The Same Roles As Men In The Armed Forces By Sex, Age, Social Grade And Region (% Of Respondents),

9. Glossary

10. Further Sources

Defence Agencies

Mod Contact Points

General Sources

Bonnier Information Sources

Government Publications

Other Sources