According to George Will, some Republicans in both the Senate and the House are unhappy with financial controls at the Defense Department. No question: The Defense Department should produce auditable financial statements. In fact, it deserves credit for how far it has come toward that goal since 2001.
But a look at Britain’s experience reveals the problem with making decisions about freezing or cutting defense spending on the basis of allegations about inadequate financial controls. In 2009, British politics were rocked by a series of leaks and then an exhaustive report that made many of the same allegations of mismanagement, waste, and lack of control in Britain’s procurement budget.
The result was that many leading commentators decided that cutting the defense budget was not only inevitable but even a wise thing to do, because it would force the Ministry of Defense to become more efficient. The Economist claimed that “military spending cuts are likely under the next government” because, “thanks to the ministry’s reputation for waste, cuts in procurement could be comparatively uncontroversial.” The Times said that “cuts are inevitable.” The Conservatives—then out of power—ring-fenced funding for the National Health Service and international development but did no such favors for defense spending.
In short, the consensus that Britain rapidly arrived at was that, because Labour had misspent some of the little it had given the armed forces, the forces should learn to get by with even less. In 2010, carrying through on this consensus, the coalition Conservative-Liberal Democrat government in Britain completed a series of defense and spending reviews that will by 2015 reduce British defense spending to the NATO minimum of 2 percent of GDP.
What this enthusiasm for cuts ignored was the fact that much of the waste was the fault of the government as a whole, not the Ministry of Defense. That exhaustive report on wasteful British defense spending in fact revealed that approximately two-thirds of the waste was the result of delays in procurement programs. These delays, in turn, were caused partly by the fact that inventing new technologies is not easy but also by the fact that the government was spending so little on defense that programs had to be continuously “reprofiled”—or, in other words, put on hold.
Unfortunately, hitting the pause button on a major project like building an aircraft carrier is extremely expensive: Even though construction has been halted, lots of people still get paid simply in order to keep them in place and available to work when construction resumes. The British government’s desire to make nice in the European Union by buying the inefficient products of the European defense industry also gave Britain poor value for its money. So did its tendency to order projects to protect British jobs instead of to provide the forces with necessary equipment. Finally, as one former procurement official confessed in 2004, procurement in Britain is “as much intent on ensuring the UK’s defence industrial base, as securing very best value for money.”
In other words, while the Ministry of Defense was top-heavy, bureaucratic, and inefficient, most of the serious problems with British defense spending were not the fault of the Ministry of Defense. They were the fault of the government as a whole, which refused to allow the ministry an adequate budget to buy items that everyone agreed were needed, and Parliament, which was more interested in jobs for the boys than guns for the troops.
Even more than in Britain, with its parliamentary system, much of the burden of improving the efficiency of defense spending in the U.S. rests with the legislative branch. Conservatives in the U.S. must therefore walk a delicate line: pressuring the Department of Defense to improve its financial management system and shifting inefficiently used resources to more productive programs while not using inefficiencies or other failings in defense spending as a reason to freeze or cut the entire defense budget. The U.K.’s recent experience suggests that, if U.S. conservatives fail to walk this line, the American military will be the loser.
