Defence has a value far beyond defending a country and its population from adversaries, but how do you establish that wider value, why is it important to do so and how does that perceived value differ between audiences?

In July, RAND published a report investigating this, Understanding the Value of Defence – Towards a Defence Value Proposition for the UK. Here Rand Europe research leader James Black explains its purpose and findings.

There are lots of established ways for measuring the value for money of investments in other parts of the public sector set out in HM Treasury’s Green Book. But many of these approaches struggle when applied to the unique world of defence. This has prompted the introduction of further guidance, such as the Public Value Framework.

But still questions, difficulties and ambiguities remain. Understanding, measuring and articulating the ‘value’ of defence remains difficult, both within government as well as to the general public. To help tackle this issue, in September 2019 the Development, Concepts and Doctrine Centre (DCDC) within the UK Ministry of Defence (MOD) asked RAND to help develop a ‘value proposition’ for defence.

This largely qualitative effort – defining the ‘value’ that defence brings in terms of security, influence, prosperity and other benefits – ran parallel to a more quantitative analysis for the Defence Science and Technology Laboratory (Dstl), which sought to understand what tools and techniques might exist for quantifying and monetising some of those benefits. Both reports came out in 2021, shortly after the government published the Integrated Review, titled ‘Global Britain in a Competitive Age’.

Protecting a nation’s populace and wider interests from harm is one of the fundamental responsibilities of any government. Throughout history, modern nation-states evolved to reflect this imperative.

Systems of taxation emerged to help fund standing armies; technology and industrial progress were often driven by defence requirements; the projection of military might helped secure global lines of communication and the conditions for trade, enabling the movement of people, capital and goods; and mechanisms such as national conscription served to help develop and mobilise a sense of national identity.

Today, defence delivers value to society in a variety of direct and indirect forms, beyond the immediate benefits of protection against security threats. It also, for example, contributes to international influence and ‘soft power’, while supporting the economy and national prosperity.

This comes at a price, even outside of times of conflict. Though it now represents a much smaller share of gross domestic product (GDP) than it did in the Cold War, defence spending still takes up a significant portion of government budgets in many countries.

NATO countries aim to spend at least 2% of GDP on defence, though not all currently manage. Especially in a democracy, there are therefore legitimate questions to be asked about value-for-money, scrutiny and what sort of benefits people should enjoy from this use of taxpayer money.

Despite this, there is no common approach to measuring the value of defence, making it difficult to present a case for investment in this area when competing for limited public sector resources. This is a deceptively tricky issue that most governments and militaries are still grappling with.

Providing for a nation’s defence and security in a fast-changing, complex and competitive world is a difficult, expensive and sometimes thankless task. It is important for elected leaders to understand the challenges facing defence and for defence ministries and armed forces to be able to explain their contribution to the wider work of government, as well as to the national economy and the people and society that they defend.

Defence spending takes up a significant portion of government expenditure in most nations and is increasing in many parts of the world in an age of so-called ‘great power competition’. It is therefore only right that taxpayers, parliaments and scrutiny organisations ask tough questions about the return on that investment, and that defence leaders be able to articulate the many forms of value that they bring.

Similarly, it is important for the civil-military relationship for the wider population to understand what it is the armed forces do and why, not just to enable recruitment but rather to ensure legitimacy and an informed public debate about defence activities both at home and abroad.

Defence establishments play a different role in different governmental systems, political cultures and national ways of life. There’s no ‘one size fits all' solution. The RAND study looked at how different countries talk about the purpose and value of defence to see what lessons the UK might learn.

The answer is very context-specific; the perceived role and benefits of a strong national defence are very different from the US to Israel to Sweden to China, for example. Nonetheless, some common themes emerge, many of which are also reflected in the UK’s national debate.

There are, similarly, lessons to be learned from how businesses in the private sector define their USP or customer value proposition, helping them understand how their products and services compare to others on the market or help address a particular need, want or fear.

It is not that the UK is late to this conversation; rather, this is a longstanding and ongoing discussion that needs to be had within government and within society to ensure that there is a shared understanding of the costs and benefits associated with investing in defence.

In some ways, the UK does not have as lively a public debate as certain other countries, for instance, those with national conscription or facing a more obvious military threat that is well understood by the general populace.

In other ways, the UK is near the front of the pack in terms of encouraging fresh thinking about how to quantify and measure some of the tricky intangibles such as defence’s contribution to prosperity, or the value of deterrence.

In simple terms, the six components of the defence value proposition can be mapped – two apiece – against the UK’s overarching National Security Objectives, which focus on providing security, influence and prosperity. If you start to think in more detail beyond those high-level objectives, it becomes clear that defence provides a wide range of direct and indirect benefits to government and society.

Some of these are more obvious than others; their perceived value is also context-specific, meaning that you might put more emphasis on supporting jobs and exports in a peacetime recession while ascribing more value to military ‘hard power’ and the ability to coerce or deter adversaries in a crisis or conflict.

In this respect, it is important to recognise that the relative weighting of different components of the defence value proposition will vary depending on the target audience and fluctuate over time. What sort of defence you will need in ten years’ or even six months’ time is very difficult to predict, of course, which is why the military also plays an essential role as a sort of insurance policy against future shocks and crises.

This flexibility and the unique capabilities of the armed forces means they might provide value by delivering humanitarian aid in one part of the world, fighting terrorism in another, and performing ceremonial functions at home, all at once.

// Main image: RAND Europe’s report sets out a defence value proposition for the UK. Credit: UK MOD © Crown copyright 2021