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As at October 2020, the Ministry of Defence (the Department) had built two new aircraft carriers, brought 18 Lightning II jets into service and completed the infrastructure works to berth the carriers in Portsmouth and operate the jets from RAF Marham. It expects to
declare initial operating capability for Carrier Strike in December 2020 and will undertake its
first operational deployment in 2021 with the US Marine Corps. The Department will then work towards
full operating capability by 2023—at which point it will be able to support two UK Lightning squadrons (
up to 24 jets) from one of the carriers. The Department’s longer-term aim is that,
by 2026, the carriers can undertake a wide range of air operations and support amphibious operations worldwide.
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This was a large, complex project, with a forecast cost of
£6.4 billion. The Department did well to build the two carriers in line with its timetable and keep
within 3% of the revised budget of £6.2 billion set in 2013.
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The Department acknowledges that it has scaled back investment on support activities on affordability grounds, such as
postponing buying a second Lightning II spares pack, and tells us that
the situation is tight. As a result, it
cannot assure us that
it has enough funding to meet future support and operating costs.
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It originally intended to buy 138 aircraft, but its assumptions for using the carriers have changed since 2015 and
it failed to give us a clear answer on how many more jets it now needs. The Department is considering the number and type of combat aircraft it will require in the future—across all operations—as part of its wider Air Combat Strategy. However, it could only provide us with a broad breakdown of the estimated costs of the Lightning II programme. The Department has forecast that
the programme’s whole life costs are £18.4 billion but, as at June 2020, it had an approved budget of only £10.5 billion. It has told us that each plane currently costs approximately $100m and that this price is falling. Nevertheless, this basic purchase price is just one element, and other costs must be taken into account, including the UK’s original investment to be a Tier 1 partner with the US, and the costs of weapons integration, sustainment and the supporting infrastructure.
We are concerned with the Department’s lack of clarity on these costs as it will need to find additional funding to purchase all the jets it will require.
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The Comptroller and Auditor General identified examples where the
Department had scaled back investment on support activities on affordability grounds, such as postponing the purchase of a second Lightning II spares pack. As a result, there is a risk that the Department may not have sufficient provision in later years’ budgets to reflect the full costs of operating Carrier Strike.
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For example, the
lack of inflight re-fuelling aircraft and ISTAR high range cover, will severely limit the range and operational capabilities of the lightning aircraft. We were very concerned, therefore, that the Department could not assure us when, or indeed if, these necessary capabilities would be in place.
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It told us that the decision about
how many more jets it would need had not yet been made. The Department is currently debating its future requirement for Lightning II numbers as part of its wider Air Combat Strategy. This debate revolves around its plans across all future air-to-air and air-to-surface combat operations and the
replacement of Typhoon from the 2030s. It told us that
un-crewed autonomous aircraft working alongside crewed aircraft will be part of its solution, and that a key part of the future combat air programme was understanding the right mix of planes, bearing in mind evolving technologies. Nevertheless, the Department was certain that the future combat air system, no matter how it is designed, would be a
very expensive part of defence spending.
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As at April 2020, the Department had spent £6.0 billion on the Lightning II project, out of an approved budget of £10.5 billion. The
approved budget had increased by £1.4 billion (15%) since 2017. However, the Department has forecast that the programme’s whole life costs
for 48 jets to 2048 would be £18.4 billion, which broadly breaks down as
£5 billion for development, £5 billion for production and £8 billion for sustainment and support. This is £7.9 billion more than the current approved budget, and does not include operating costs, such as manpower, fuel and weapons expenditure.
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