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| KN75000 |
| KEY NOTE DEFENCE EQUIPMENT JANUARY 2000 |
| Overview |
ISBN 1-84168-079-6
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This report covers:
Companies covered include:

|
Executive Summary |
|
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| UK PROCUREMENT |
| Table 1: UK Defence Equipment Expenditure by Sector by Value (£m), 1996/1997-1999/2000 |
| Table 2: Quoted Companies Paid Over £25m Annually by the Ministry of Defence in 1998/1999 |
| Overseas Suppliers |
| Table 3: UK Imports of Defence Equipment by Value (£m), 1995-1998 |
| Smart Procurement |
| Acquisition Cycle |
| Concept |
| Assessment |
| Demonstration |
| Manufacture |
| In-Service |
| Disposal |
| Changes from Downey Cycle |
| Equipment Capability |
| Equipment Approvals Committee |
| Defence Procurement Agency |
| Integrated Project Teams |
| Defence Logistics Organisation |
| Financial Delegation |
| Political Approval |
| GLOBAL MARKET |
| UK POSITION |
|
|
| DEFENCE BUDGET |
| Table 4: Large Spending Departments by Share of Total Annually Managed Expenditure ( percent), 1998/1999-2001/2002 |
| Table 5: Annual Defence Expenditure as a Share of Gross Domestic Product ( percent) 1991/1992-2001/2002 |
| Divisions of the Defence Budget |
| Table 6: Main Divisions of the UK Defence Budget by Share of Total Defence Budget ( percent), 1995/1996-1999/2000 |
| Table 7: UK Defence Personnel Budget by Value and Share of Total Defence Budget (£m and percent), 1985/1986-2001/2002 |
| Table 8: UK Defence Equipment Budget by Value and Share of Total Budget (£m and percent), 1985/1986-2001/2002 |
| DEFENCE EQUIPMENT EXPENDITURE |
| Table 9: UK Defence Sea Systems Budget for Development, Production, Repair and Spares by Value and Share of Total Defence Equipment Budget (£m and percent), 1985/1986-2001/2002 |
| Table 10: UK Defence Sea Systems Production and Repairs Expenditure by Value (£m), 1994/1995-1997/1998 |
| Table 11: UK Defence Land Systems Budget for Development, Production, Repair and Spares by Value and Share of Total Defence Equipment Budget (£m and percent), 1985/1986-2001/2002 |
| Table 12: UK Defence Land Systems Production and Repair Expenditure by Value (£m), 1994/1995-1997/1998 |
| Table 13: UK Defence Air Systems Budget for Development, Production, Repair and Spares by Value and Share of Total Defence Equipment Budget (£m and percent), 1985/1986-2001/2002 |
| 1994/1995-1997/1998 |
| DEFENCE EXPORTS |
| Table 16: Destination of UK Defence |
| Exports by Share ( percent), 1992-1997 |
| Table 17: Top 10 Defence Exporting Countries by Value ($bn), 1994/1998 |
| Defence Export Services Organisation |
|
|
| INDUSTRY CONCENTRATION |
| Table 18: Number of MoD Contractors Paid over £5m in Each Year, 1988/1989 to 1996/1997 |
| EMPLOYMENT |
| Table 19: UK Defence Employment, 1994/1995-1997/1998 |
| Table 20: Estimated UK Defence Employment by Region, 1997/1998 |
| INDUSTRY CONSOLIDATION |
| US Influence |
| European Experience |
| New Industrial Groupings |
|
|
| THE MARKETPLACE |
| Table 21: Selected Major UK Defence Equipment Suppliers by Turnover (£m), 1999 |
| MARKET LEADERS |
| Alvis PLC |
| BAe Systems PLC |
| Cobham PLC |
| GKN PLC |
| Hunting PLC |
| Racal Electronics PLC |
| Rolls-Royce PLC |
| Smiths Industries PLC |
| Vosper Thornycroft Holdings PLC |
|
|
| STRENGTHS |
| WEAKNESSES |
| OPPORTUNITIES |
| THREATS |
| to the Industry |
| DEFENCE SUPPORT AGENCIES |
| Table 22: Defence Agencies by Staff Numbers and Budget (£m), 1998/1999 |
| MANAGEMENT CONSULTANTS |
| by Value (£m), 1995/1996-1998/1999 |
|
|
| CURRENT PROCUREMENT |
| Background |
| Major Projects 1998 |
| Table 24: Major Defence Equipment Projects by Value In-Service Date (£m), as at 31st March 1998 |
| Eurofighter |
| SECURITY REVIEWS |
| Strategic Defence Review |
| NATOs Adaptation |
| NATO AND EUROPE |
| European Aspirations |
| Defence Capabilities |
| INDUSTRIAL CHALLENGES |
| Contracting Markets |
| Table 25: NATO Military Expenditure by Value ($m at 1990 price levels and exchange rates), 1990-1999 |
| Armaments Co-operation |
| Competing Agencies |
| Future Prospects |
| RECENT ANNOUNCEMENTS |
|
|
| BUDGET FORECASTS |
| Table 26: UK Defence Budget and Forecasts by Value (£m), 1998/1999-2004/2005 |
| DEFENCE ACCOUNTING |
| PROCUREMENT TRENDS |
|
|
| Alvis PLC |
| BAe Systems PLC |
| Cobham PLC |
| GKN PLC |
| Rolls-Royce PLC |
| Smiths Industries PLC |
| Vosper Thornycroft Holdings PLC |
|
|
|
|
| Associations |
| Periodicals |
| Directories |
| General Sources |
| Bonnier Information Sources |
| Government Publications |
| Defence Agencies |
| Other Sources |
|
Key Note Research |
The incoming Governments Strategic Defence Review (SDR) was belatedly published in July 1998, introducing considerable change for the Armed Forces and their suppliers. Further change has also been instigated by HM Treasury, affecting all government departments including the Ministry of Defence (MoD). Explanation of these changes is a feature of this report. As with other departments of state, accurate information has become increasingly difficult to obtain from the MoD since the present Government took office. The annual reporting cycle, by the MoD to Parliament, has been completely changed with some publications no longer produced. This report seeks to fill the void which has resulted, with factual information from a wide variety of unclassified sources. UK expenditure on defence equipment was £9.8bn in 1999/2000, and the market can be divided into three primary sectors: sea systems land systems air systems. Defence equipment is increasingly being supplied by a smaller number of large companies, whether in continental Western Europe, the US or in the UK. Against the necessary financial background, the effects of industrial restructuring together with the procurement decisions arising from the SDR are examined in this report In financial terms, defence is not high on the domestic political agenda and the associated expenditure has been under considerable pressure throughout the 1990s. Exports have thus been, and will continue to be, an important factor in cushioning the UKs equipment suppliers against the impact of a decline in the defence budget. A great deal of rhetoric has been heard from the Prime Minister and others, during the past 2 years, about the future of the Armed Forces. Whatever plans there may be for the Services, they will have to conduct their affairs with less money. The forward equipment programme, however, contains considerable prospects for a restructured defence industry as described in this report.
Text © 2000 Key Note
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Last updated by Duncan Nottage 5th March 2000