Later this month, the UK Government will publish a new National Security Strategy (NSS) to replace the 2010 version. Within a matter of days, the outcomes of the 2015 spending review and the new Strategic Defence and Security Review (SDSR) will also be announced. At that point, people will start poring over the documents to make their initial judgements about their strengths and weaknesses.

Looking back at the 2010 Strategy

The strengths and weaknesses of the 2010 NSS have been much debated since it came out. It has been argued that the previous Coalition Government seemed at critical junctures to be caught by surprise by events in the wider world – most notably, by the Arab Spring from 2011 onwards and the resurgence of geopolitical tensions with Russia since 2013 over the conflict in Ukraine.

Some almost went so far as to question the point of it. Julian Lewis MP has described the 2010 NSS as “apple pie and motherhood”.

Meanwhile, the Joint Committee on the National Security Strategy (JCNSS) has called for the 2015 NSS to be “more strategic” than its predecessor, disagreeing with the Prime Minister, David Cameron, when he argued that the NSS would need a “refresh”, rather than a “complete overhaul”.

The 2015 NSS: the emerging financial context

Another criticism laid against the 2010 NSS was that it was somehow distorted by financial pressures originating in the previous Coalition Government’s ‘austerity agenda’. There will probably be similar arguments this time around too. Although we don’t yet know much about the new NSS, over the last six months there have been important developments that offer us insights into the financial context in which it will operate between 2016 and 2020.

  • More cuts in FCO spending signalled

The FCO has been asked by the Treasury to indicate how it would make real terms savings of 25% and of 40% from its resource budget by 2019-20. However, the Foreign Affairs Committee has expressed the view that the FCO has “limited scope to make savings” and that to make any more cuts would be very unwise. Nevertheless, further cuts in real terms to the FCO’s budget look highly likely. This will fan fears of a shrinkage in UK power and influence abroad.

  • Commitment to spend 2% of national budget on defence

Such fears may partially be assuaged by pledges made recently on the defence budget. A campaign was waged which resulted in a government commitment, made in the summer budget by George Osborne, the Chancellor of the Exchequer, to maintain defence spending at 2% of the national budget. Mr Osborne also announced 0.5% real terms increases in the defence budget for the duration of this parliament and the creation of a Joint Security Fund of up to an additional £1.5 billion by 2020/21. It will become operational in 2017.

According to figures published by NATO in June 2015, the UK is projected to spend 2.08% of its estimated GDP on defence during 2015/16. However, several items of expenditure have been included in that projection which were not included in previous years. While this is allowed, RUSI argues that further changes to reporting conventions will be necessary to keep meeting the 2% target.

  • Changing parameters of Overseas Development Assistance

An area where scope for flexibility has been identified in supporting the budgets of ‘non-protected’ government departments like the FCO is through increased counting of their spending as Overseas Development Assistance (ODA – as defined by the OECD). The UK’s ODA budget has reached the UN target of 0.7% of Gross National Income and the Government is committed to maintaining this level of spending.

In September, the Chancellor, George Osborne, said, when announcing that the UK would accept 20,000 Syrian refugees over the next five years, that any automatic rise in the ODA budget flowing from maintaining spending at 0.7% of Gross National Income would be used in ways that directly serve the UK’s “national interest”.

There was no upward swing in the FCO and MOD’s shares of total UK ODA during the first four years of the last parliament. But it would be surprising if their shares did not rise between 2016 and 2020. But the Foreign Affairs Committee is worried that greater dependence by the FCO on ODA may skew its programmes away from important countries in the developed world – including Russia and China –that are not ODA-eligible.

  • The Conflict, Security and Stability Fund starts up

The Conflict, Security and Stability Fund (CSSF) became operational in April 2015. A beefed-up version of the tri-departmental (FCO, MOD, DFID) Conflict Pool but now managed and controlled by the National Security Council, it represents an attempt to fulfil the long-standing aspiration for a ‘whole of government’ approach to national security.

The CSSF has become the main mechanism for the implementation of the 2011 Building Stability Overseas Strategy (BSOS), which sets out the conflict prevention agenda originally called for by the 2010 NSS.

A key element of the UK’s conflict prevention agenda during the last parliament was a greater focus through UK ODA on fragile and conflict-affected states. This has been achieved: the target set was to spend 30% of UK ODA on them by 2014-15. In 2013, 43% of UK ODA was spent on them. This upward trend looks likely continue over the next five years.

First announced in 2013 and funded from core departmental budgets, the CSSF is worth £1.033 billion in 2015/16. The Government has said that, under the departmental allocations from the Fund in 2015-16, the FCO will receive £738.8 million, the MOD £191.5 million, DFID £59.9 million, and other departments and agencies £42.81 million.

The CSSF can be counted as ODA or towards the pledge to spend 2% of the national budget on defence – or both, if this is “consistent with the classification guidelines”.

Further reading

Foreign Affairs Committee, “The FCO and the 2015 spending review”, HC 467, 23 October 2015

Library briefing CBP 7134, 21 October 2015, “Defence Expenditure – NATO 2% Target

Picture Credit: NATO Flag by Defence Images, Creative Commons Attribution 2.0 Generic (CC by 2.0)