Rising costs, falling budgets and their implications for defence policy

The real unit costs of defence equipment have been rising persistently since World War II, much faster than national defence budgets. Most nations have adapted by buying fewer units in successive generations of each class of defence equipment, and ultimately by omitting some classes from their armed forces. However current decreases in defence budgets will soon force most NATO nations (including the UK) to adopt more closely coordinated policies for force planning and equipment procurement, in order to maintain NATO's military capabilities.