Defense contracting is deeply weird

A $0.5bn golden goodbye is nice to have for anyone.

Business Insider's Walter Hickey does a weekly round-up of things the American Department of Defence has purchased, and this week's contains a line item which basically sums up defence spending.

This is what the contract press release says:

The Boeing Co., Long Beach, Calif., is being awarded a $500,000,000 firm-fixed-price and cost-plus-fixed-fee contract for the C-17 transition to post production, which will provide for orderly transfer of C-17 production assets. The location of the performance is Long Beach, Calif. Work is to be completed by July 5, 2022. ASC/WLMK, Wright-Patterson Air Force Base, Ohio, is the contracting activity (FA8614-12-D-2049, Order 0001).

Hickey translates from DoD-ese:

The Department of Defense decided that they're probably not going to need too many more of Boeing's C-17 jets. So to make sure that the transition from "making C-17s" to "not making C-17s" goes as smoothly as possible, they awarded Boeing a half-billion dollar contract. The production facility in Long Beach California will likely have to have some changes, and Boeing is likely still responsible for parts, maintenance, and upkeep of the C-17 fleet for a while. Still, that's a heck of a severance package.

This is how military contracting works. You get paid to make something, you get paid to stop making things. You get paid if you deliver, you get paid if you don't deliver. You get paid while your things are used, and then you get paid when they stop being used. Generally speaking, you're going to get paid.

A Boeing C-17 jet lands. Photograph: Boeing

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.