[Pounds Sterling]3.5bn Boost on Blunkett's Beat; Inflation-Busting Increase for the Armed Forces, but the Axe Will Still Fall as 20,000 Community Support Officers Beef Up Blitz on the Villains, Police Warn against Crime-Fighting on the Cheap CAN HE DELIVER?
Byline: MATTHEW HICKLEY
THE Armed Forces will receive inflation-busting budget rises over the next three years to help them modernise.
But critics warned that the realterms increase of 1.4 per cent a year promised yesterday would not be enough to ease the financial crisis already gripping the Ministry of Defence.
Despite the Chancellor's apparent generosity, Defence Secretary Geoff Hoon is expected to announce a wave of cuts later this month under the guise of 'reshaping' the UK's forces for the global war on terror.
The MoD budget will rise from [pounds sterling]29.7billion this year to [pounds sterling] 33.4billion in 2007-8, allowing Gordon Brown to claim 'the longest sustained real terms increase in spending for two decades'.
However that claim ignores the effects of a new financial system imposed recently across Whitehall which forces departments to count the 'cost' of assets, such as depreciation and storage.
Because the MoD has so much expensive hardware, the new accounting system has effectively cut [pounds sterling]1billion a year from the cash the forces can actually spend.
Military training and routine maintenance have had to be cut back and civil servants are looking for savings across all areas.
At the same time, the MoD is facing huge bills for major equipment projects, including the RAF's Eurofighter Typhoon jet and two new aircraft carriers.
Mr Brown's pledge yesterday to 'continue to meet the additional costs of military operations in full' from separate funds will raise eyebrows at the MoD.
Its officials have been haggling with the Treasury for months trying to agree on what can be counted as the 'extra' costs of going to war in Iraq. …