The May 6 election in Britain has produced an inconclusive result. But no matter what the political color of the government, the next British Secretary of State for Defense will face challenges graver than any that have confronted the Ministry of Defense since 1940.

Britain is engaged in a war in Afghanistan, where its 10,000 troops are a commitment to the war on terrorism second in size only to that of the U.S. It faces a dire financial crisis at home, with a budget deficit in 2010 that will be larger as a share of national income than Greece’s. And over the past decade, Britain has been sucked ever deeper into a defense relationship with the EU, a relationship that is entirely contrary to its interests.

Under the previous government, defense was not treated as a serious issue. Everything the next British Secretary of State for Defense does must address that fundamental failing. A continuation of Britain’s retreat would have profound implications not only for Britain but for American leadership. The following 10 recommendations sum up the most important issues facing the British defense establishment.

1. Rededicate Britain to the Atlantic Alliance

The U.S. is Britain’s most important ally—no other nation comes close. The alliance with the U.S. is both bilateral and, through NATO, multilateral. Because their forces fight alongside each other, interoperability is vital. Any relationship, commitment, or system of procurement that detracts from this close and vital relationship is a direct attack on the effectiveness of both British and American forces. Britain should stand firm against all EU-led efforts to subordinate the Special Relationship and NATO in all policy realms.

2. Recognize the True Purpose of the Armed Forces

In a democracy, the true purpose of armed forces is not simply to win wars but to prevent them by deterring adversaries. The argument that Britain can respond more effectively to the strategic challenges of the future by denuding its armed forces of supposedly Cold War era capabilities, and taking a “deterrence dividend” as a result, is a dangerous error that will lead to weaker forces that are less capable of fulfilling their true purpose. Britain’s armed forces should remain balanced and continue to hold an effective nuclear deterrent, not becoming exclusively dedicated to counter-insurgency warfare.

3. Demand Appropriate Spending Levels

In 1996, before Tony Blair entered office, Britain was at peace and spent 2.9 percent of GDP on defense. It is now at war and, in 2008, spent 2.2 percent. Britain’s armed forces cannot be restored to full health by further cuts. Yet over the next five years, defense spending is projected to fall by 6 percent annually.[1] Given the cuts already imposed on the Ministry of Defense and Britain’s commitment in Afghanistan, this is unacceptable. Over the next five years, defense spending should rise to at least 2.9 percent of GDP, thus restoring cuts made since 1996. The first priority for these funds should be to sustain and increase the strength and effectiveness of the British army.

4. Recognize That Britain’s Defense Industrial Base Is Global

No democracy, including the U.S., can supply its forces entirely with equipment produced at home. The purpose of defense procurement is simple: to procure equipment for defense. There is nothing wrong with foreign arms sales that serve Britain’s strategic interests, but the British defense industry should not be subsidized out of the defense budget simply for the sake of exports. Doing so would mean less money for the forces themselves. Instead, Britain should develop and buy efficiently and do so in collaboration with its closest operational partner.

5. Recognize That Procurement Reform Is Essential but Not a Silver Bullet

Last fall, the Gray Report made serious claims about the cost of inefficiencies in Britain’s procurement process. These claims should be investigated and appropriate reforms made. But procurement reform is a perennial issue, and there is no reason to believe that all of the supposed inefficiencies can be found and eliminated. Britain should not plan its defense spending on the assumption that future efficiencies will compensate for cuts today.

6. Conduct a Comprehensive Investigation into Contracting Out and Other Hidden Liabilities

When carried out efficiently, transparently, and with proper accounting procedures, contracting out makes sense. But serious questions have been raised about the value for money delivered by Labour’s use of the Private Finance Initiative (PFI), and it is clear that PFI has not been properly accounted for. Nor is the publicly available information on PFI sufficiently transparent to allow the Commons to carry out its oversight duty. Britain should continue to contract out but do so responsibly.[2] This investigation into contracting out should be part of a broader examination of defense’s hidden financial liabilities, including those resulting from funding arrangements for the war in Afghanistan.

7. Reduce the Size and Cost of the Senior Civilian Levels of the Ministry of Defense

Under Labour, the size of the civilian side of the Ministry of Defense has shrunk dramatically. This is commendable. But the cost of that civilian side has grown nonetheless, as has the size of its senior levels. More and more expensive senior officials are supervising fewer and fewer of their cheaper juniors.[3] The size of the Ministry should be brought into balance to control current senior wage bills as well as future pension and related claims.

8. Resist International Initiatives That Will Damage Britain’s Ability to Defend Itself and Its Allies

Britain currently supports international initiatives that will prove seriously damaging to its defenses as well as its sovereignty. It is the leading campaigner for the U.N.’s Arms Trade Treaty, which will ultimately be used to curtail British arms sales to states such as Israel.[4] It is an advocate of the International Criminal Court, which is now contemplating defining a “crime of aggression” that would limit Britain’s ability to defend itself or to cooperate with the U.S.[5] Britain must take a strong stand against this transnational threat to its defense sovereignty.

9. Foster a Culture of Military Professionalism in the Armed Forces and the Ministry of Defense

The perception is widespread that the past government changed both the culture of the armed forces and the Ministry itself by devaluing the contributions of, and debate among, military professionals. It is a fact that the British occupation of Basra was a failure. The fate of British operations in Afghanistan is still in doubt. It may be politically convenient to emphasize Treasury oversight and a consultant culture instead of informed military judgment in Britain’s defense establishment, but such an approach is militarily suicidal. Within the context of civilian control of the forces, Britain should encourage military professionals to act as professionals.

10. Respect and Foster Commons Oversight

The House of Commons has a central role to play in the oversight of the Ministry of Defense and of all other ministries. This oversight will not be pleasant for the Secretary of State for Defense. But the Secretary nonetheless has an interest in the professional exercise of this oversight: the Commons embodies the sovereignty of the British people. Commons oversight should be frequent and sustained, and Defense officials—like all others—should foster such characteristics. It is noteworthy that few of these fundamental issues facing Britain’s armed forces have been the subject of serious inquiry by the House of Commons Defense Select Committee. That neglect should end.

Immense Challenges Ahead

The challenges facing the next British Secretary of State for Defense are immense. Of course, defense is only part of the broader problem of securing Britain, a problem the next government will have to address through a revised national security strategy. If the forces are to serve their limited but vital role in this strategy, they, and the broader defense establishment, should be restored to a central place in the concerns of the government and the House of Commons as a whole.

Ted R. Bromund, Ph.D., is Senior Research Fellow in the Margaret Thatcher Center for Freedom, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation.