Missing links in SDSR financing

A new RUSI briefing by Prof Malcolm Chalmers warns of the risks of steep spending cuts in UK departments and agencies responsible for tackling illegal migration, organised crime and supporting UK diplomacy. It can be download here https://www.rusi.org/sdsr15missinglinks

Were the 25% or 40% cuts now being considered by the Treasury in these areas to take place, the 'implications for national security could be considerable'. Such cuts would cast doubts on the credibility and coherence of the forthcoming Strategic Defence and Security Review, despite the assurance of rising real-terms budgets for defence and aid. The briefing suggests that an additional £400 million in annual spending, by 2019/20, would provide real-term protection for each of these capabilities.

Entitled '"The 'Missing Links" in SDSR Financing: Organised Crime, Migration and Diplomacy', and authored by RUSI's Research Director, Professor Malcolm Chalmers, the paper argues that, ahead of the forthcoming Strategic Defence and Security Review (SDSR), the government has made commitments that the UK 'is willing to devote the resources necessary to remain a serious power on the international stage, backing up its ambitions with real increases in funding for both defence and development.'

However, 'if the SDSR were to be accompanied by steep reductions in spending on the diplomatic network, or by significant cuts in the resources available for combating organised crime and illegal migration, it could risk undermining the wider coherence and credibility of the review. The government would be open to the criticism that it was prepared to devote substantial resources to meeting international norms for defence and aid spending, while cutting spending in areas more directly related to national security, foreign policy and prosperity objectives.'

The report identifies how the government has not been willing to match the budgetary protection for defence and official development assistance (ODA) with similar commitments to other security-related departments which, at least in part, also fall within the SDSR - specifically, the Home Office and Foreign Office. Instead, these two departments - as with most unprotected ministries - have been asked by the Treasury to model the effects of reducing their recurrent budgets (Resource Departmental Expenditure Limit, DEL) by either 25 or 40 per cent over the next four years.

Despite the emphasis placed in the SDSR on the value of international partnerships, the key department charged with realising this aspiration - the Foreign Office - has seen a 19% fall in core recurrent spending in real terms and is being asked to model further cuts of 25% and 40% in its budget. The paper suggests that ' If the core departmental budget was to be subjected to take cuts comparable to the 25 and 40 per cent scenarios currently being discussed with the Treasury, the consequences could well dominate perceptions of the 2015 SDSR, just as cuts in defence dominated coverage of the 2010 review.'

The briefing identifies how 'no budgetary protection has been provided for Home Office capabilities for tackling organised crime'. For example, the National Crime Agency's £427 million budget is considered to be part of the Home Office's baseline budget, while local police forces have seen their budget fall by 25% in real terms - both play a big part in tackling organised crime.

The RUSI briefing suggests that tackling migration has not been a major issue for the SDSR so far, 'but there is a strong argument that issues of illegal immigration and refugee flows should be, given their close relationships (respectively) to organised crime and conflict.' 'Given the pressures that they now face, it is hard to believe that cuts of the magnitude that the Border and Immigration Directorates have made since 2010 could be repeated in the next Spending Review without significant adverse consequences for the ability of these agencies to respond to the
national security problems created by poorly regulated movements of people.'

The RUSI briefing has estimated that an additional 2019/20 allocation of £400 million would be required to provide real-terms protection to the agencies with lead responsibility for combating organised crime, managing migration and conducting international diplomacy. This might well be possible given that the Chancellor has some room left for relaxation in the pace of departmental spending reductions, while still keeping to his objective of generating a substantial budget surplus by 2019/20.

'Such protection would not be a magic bullet. But, alongside the much larger investments now being promised for defence, development and counter-terrorism, it would go a long way to financing the three 'missing links' in security provision that could otherwise emerge as a result of the Spending Review.'