Defence Budget 2002 - Short Version, Text Edition

The Defence Budget for 2002 amounts to NOK 27.7 billion of which NOK 725 million represents internally generated income. If the funding allocation for Norwegian forces abroad is excluded from the calculations, this represents a budget increase of 2.5 percent.

Defence Budget 2002 – Main Profile

The Defence Budget for 2002 amounts to NOK 27.7 billion of which NOK 725 million represents internally generated income. If the funding allocation for Norwegian forces abroad is excluded from the calculations, this represents a budget increase of 2.5 percent. If this allocation is included, the sum budgeted represents a reduction of NOK 90 million, or 0.3 percent, compared with the budget for 2001 . 2002 is the first budget year reflecting the restructuring of the Norwegian Armed Forces that is to take place over the period 2002-2005 as endorsed by the Storting on 13 June 2001.

Restructuring 2002-2005

The principal aim is to establish a new defence structure that will enhance the operational capability of the Armed Forces. Much importance is attached to the tempo and efficiency of this restructuring and a wide range of restructuring measures will be implemented during 2002 so that the potential for savings can be realised as rapidly as possible. This will have a positive effect on the overall budget allocations required in subsequent years of the restructuring period.

The measures to be implemented in 2002 are both wide-ranging and demanding but they are essential if the overall aim is to be achieved. Annual defence operating costs must be reduced by a minimum of NOK 2 billion compared with the level implicit in the alternative of not restructuring. The freeing of these resources is absolutely vital to the realisation of the new structure. The measures of greatest importance in cutting operating costs are the reduction and disposal of Defence real estate and reducing the complement of defence personnel by about 5,000 compared with the manpower level at 1 September 2000.

A range of restructuring measures have been implemented during the current year. The 2002 budget year will, however, be the first year in which the collective resources of the Defence establishment will be devoted in earnest to the actual process of restructuring. The Government has assigned top priority to the restructuring process over this period. Major measures of central importance will be implemented during 2002. In particular, priority will be given to investment in property, buildings and other defence installations.


The budget for investment has been increased overall by 10.6 percent to just over NOK 8.7 billion. Investment in nationally financed construction projects is increased in 2002 by NOK 800 million or by something in excess of 75 percent. Investment in jointly funded NATO construction projects is also increased markedly, by approximately NOK 36 million or 6.5 percent. Investment of this magnitude in restructuring will necessitate some compensating reduction in investment in materiel, especially in 2002.

Important milestones for materiel investment in 2002 relate to progressing the frigate project, start-up of the standard helicopter procurement project and completion of CGV Svalbard, a new Coast Guard vessel specially strengthened for operations in ice. The MTB Skjold project will be progressed during 2002 with a view to starting building in 2003.

Operating costs

The budget for operating costs is cut back by NOK 727 million (-3.8 percent) to NOK 18.9 billion. The largest single cut is in the funding for multinational operations. This item has been reduced by NOK 707 million. One of the reasons for this cutback is that Norway’s task as Lead Nation for KFOR is now over, thus freeing the funds allocated for this purpose. A further reason is the reduction in costs associated with the Norwegian battalion that has been achieved through greater efficiency and the lower cost of force production. Rationalisation of administration and other support functions has led to a further saving of NOK 185 million. If the costs of peace operations are excluded, the remainder of the budget for operating costs is reduced by 0.1 percent. In the case of the Home Guard the reduction is approximately NOK 80 million. This will affect mainly the level of exercise activity. This is a temporary reduction made to make room for measures which are vital to the restructuring process. The Coast Guard budget is increased by approximately NOK 60 million in order to allow the level of activity to be maintained and to cover the operation of the new vessel CGV Svalbard.

Principal measures to reduce operating costs during the period 2002-2005

• Disbanding of certain designated organisational elements, garrisons and structural elements. Establishment of new organisational elements, garrisons and structural elements as agreed.

• Reduction of Armed Forces military manpower numbers by a minimum of 5,000 compared with levels at 1 September 2000.

• Significant reduction in Defence real estate. Phasing out and, wherever possible, disposal of properties, buildings, installations and materiel not required in the new structure.

Principal measures to be implemented or started in 2002

The tempo and efficiency of the restructuring process are of great importance to the speedy realisation of potential savings. A proportion of the key restructuring measures are planned to be implemented before 31 December 2002.

Ministry of Defence (MOD) and Defence Command Norway (FO)

Strengthening of strategic planning, command and control capability.

Disbanding of Defence Command Norway and establishment of new Defence Staff. The Defence Staff will be co-located with The Ministry of Defence which itself will undergo substantial changes.

This will enable a net reduction of a minimum of 50%, representing an annual saving of some 800 man-years, to be made in the top echelons of Norwegian Defence compared with the overall numbers employed in the Ministry of Defence and Defence Command Norway at 1 September 2000.

Work has already started on the report which is to form the basis of the co-location programme and the report itself is due to be completed during the course of 2001.

Command structure

The new command structure for the Armed Forces will be implemented during the course of 2002. As from 1 January 2003, the Joint Operations Headquarters at Jåttå, Stavanger, will become operational. The same applies to the two Regional Command Headquarters for South Norway in Trondheim and for North Norway in Bodø.

Regional Command North in Bodø will constitute the regional command centre for crisis and incident management in the northern region and, with some additional staff, will also be capable of serving as an alternative command headquarters for the Supreme Commander.

These new entities will replace the existing Defence Command North Norway, Defence Command South Norway, the Army’s four District Commands and the three naval Districts.

Overall the restructuring will result in a net saving in personnel numbers of approximately 40 percent.

The Services


Some restructuring measures of central importance to territorial defence will be implemented as early as 2002:

6 Division will be reorganised as a mobile divisional command. This will be capable of the command and control of from three to four brigades including an Allied reinforcement brigade. It will also have assigned to it the units necessary for command support and field intelligence, tactical support and logistics, possibly augmented by support units from other Allied countries.

The Reaction Force and the Reinforcement Force which form part of the Army’s contribution to the Armed Forces will be deployed in 2002 in Kosovo as the Norwegian Battalion contribution to KFOR.

All the Army’s territorial regiments will be disbanded before the end of 2002. Brigade South, 6 Brigade and 15 Brigade will also be disbanded. 20 field battalions will also be disbanded and replaced by up to 20 field companies. Various garrisons will cease their activities and these will be phased out as rapidly as possible.

The Army’s training activities will be organised round three main Training Centres. These will constitute training and competence centres dealing with combat (KAMPUKS), logistics (LOGUKS) and communications (SBUKS) located in Østerdalen and at Sessvollmoen and Jørstadmoen respectively.


The Navy’s force structure will be developed progressively with the procurement of five frigates equipped with maritime helicopters for anti-submarine (ASW) operations, the introduction of Skjold Class missile torpedo boats (MTB), the procurement of new sweep equipment for the Alta Class minesweepers and the establishment and equipping of the Coastal Ranger Command.

Planning continues for the strengthening of Coast Guard’s capacity to maintain a presence and assist in the exercise of Norwegian national sovereignty at sea. Measures include the entry into operational service of the new Coast Guard Vessel CGV Svalbard, carrying a helicopter and specially reinforced for operations in ice, in 2002.

Three controllable minefields, three torpedo batteries and nine artillery forts are to be "mothballed". One landing craft will continue in operation while two others will be mothballed.

Modernisation and extension of the coastal radar chain is under active consideration in the context of the Government’s Action Plan to raise the level of safety and security along the whole of the Norwegian coast. One Alta Class minesweeper will be transferred to the Clearance Diver Command as a support vessel. Outdated equipment and other materiel no longer required will be phased out of the war structure.

The Coastal Squadron now established at Haakonsvern replaces the Naval and Coast Guard Inspectorates. A Norwegian Task Group is being set up as a "nucleus" organisation which in peacetime will be incorporated in the Coastal Squadron.

The Coast Artillery’s training fort and training units will be closed down and disbanded. The Coastal Ranger Command is being established at Trondenes near Harstad to handle force production for the new mobile Coastal Ranger squads.

The Navy’s Officer Candidate School is being established in Horten and the existing Officer Candidate Schools for the Navy and the Coast Artillery will be closed. The Clearance Diver Command is being set up at Haakonsvern. The training of naval recruits carried out at the Naval Training Centre KNM Harald Hårfagre will be reduced during 2002 but, as a consequence of the introduction of the new Fridtjof Nansen Class frigates and the Skjold Class MTBs, will have to be built up again in the longer term. Basic training for Air Force personnel and initial military service for Naval Home Guard recruits will take place at KNM Harald Hårfagre.

Olavsvern, Hysnes, Ulsnes, Marvika and Karljohansvern Naval Bases will be closed.

The Navy’s administrative organisation will be cut back to take account of reduced regional activity. The new regional organisation will be implemented as from 1 January 2003 at the latest.

Air Force

Development of the Air Force war structure will be taken further with increased emphasis on the mobility and flexibility of all operational units. The Air Force will implement structural changes in its peacetime organisation in line with the other Services, with some measures already in place by 2002.

332 Squadron will be closed down at Rygge and re-established in Bodø. All F-16 aircraft at Rygge will be transferred to Bodø and Ørland. The Bofors L-70 anti-aircraft gun batteries will be phased out during 2001.

The Air Force Flying School will be moved from Værnes to Bardufoss. A new Air Force Inspectorate structure will also be set up. The Air Force schools in Stavern will be closed and the Air Force Officer Candidate School established at Kjevik. Air Force recruit training will be transferred from Værnes to KNM Harald Hårfagre.

During 2001 the Air Station structure will be reorganised in accordance with the Storting Resolution of 13 June. The Air Force Control and Reporting School is to be moved from Kongsvinger to Maagerø.

Further measures for the rationalisation of the Air Force structure will be evaluated. Activities at Rygge, Gardermoen and Kjeller will form the subject of a special study and recommendations will be laid before the Storting no later than Spring 2002.

Home Guard

The Home Guard structure continues broadly unaltered. The Home Guard district commanders will have responsibility for territorial defence in peacetime and in time of crisis or war. The Home Guard will operate with the same manpower numbers as at present, that is to say a mobilisation force totalling about 83,000 men and women, of which some 73,000 make up the Land Home Guard. In view of the Home Guard’s responsibility for territorial defence, the 18 Home Guard Districts will be reorganised to facilitate the planning and command of operations in this sphere. Planning cells will be formed as part of the Home Guard District Staff but essentially within the present manning constraints.

Force production and maintenance of the Home guard’s capability will be kept under continuous review and adapted to match the progressive implementation of the new Defence structure. Force production will be centred on the Porsanger Garrison, Værnes and Heistadmoen.

It is planned that the training of reserve officers and NCOs for the Home Guard should be relocated at Værnes in 2002 and that the corresponding training establishment at Kongsvinger will be closed. Training will continue at Dombås with a Weapons School and a Courses Department.

The Home Guard’s war structure will be further developed through revision of the mission portfolio, a range of equipment projects and the transfer of surplus materiel from the other Services.

Joint Service functions

A number of Joint Service functions will be reorganised in 2002.

The single-service Logistics and Management Schools will be closed down and a single Armed Forces Logistics and Management School established under the Armed Forces School Centre, Akershus Fortress, and located at Akershus Fortress and Halden.

A Joint Service Driving School and Military Police School will be established at Sessvollmoen.

The National Service Administration will be brought together in a single unit at Hamar.

The Armed Forces central pay organisation will be set up on a temporary basis in Oslo and will be transferred in the longer term to Harstad once the reorganisation and other efficiency measures have been implemented. Until the final transfer to Harstad, staff at present working in Harstad and Hamar will continue to serve there.

An Armed Forces Medical Training Centre (MUKS) will be established at either Lahaugmoen, Sessvollmoen or Østerdalen Garrison. It is anticipated that a final decision on the location will be taken by the Storting during the Spring session 2002.

Support functions and management instruments

Work will continue on the development of a unified management and control system based on the Armed Forces management concept and the Public Sector Finance Regulations.

The objective of the GOLF restructuring programme is to develop and introduce a new unified management and control system spanning all aspects of Armed Forces administration. The fundamental aims are to develop common solutions embracing management, control and administrative processes as well as technology and organisational aspects. This should ensure uniformity of information for control and management, accounting, pay and personnel, procurement, materiel administration and maintenance. Golf will also serve to underpin the ongoing restructuring of the Armed Forces.

The various logistic functions for the Armed Forces will be combined in a single organisation – the Joint Logistics Organisation (JLO). This change will be implemented in three phases. Phase one will entail the establishment of a joint management structure and this is due to be in place by the end of 2002. Phase two will involve the setting up of a joint investment and development organisation by the end of 2003. Before this phase is implemented, however, final proposals for the shape of the organisation will be submitted to the Storting in a separate Government Proposition. Phases one and two will result in annual savings of about 600 man-years.

The Norwegian Defence Construction Service and the local administration authorities dealing with defence real estate, buildings and facilities will be combined as from 1 January 2002 to form a new unified defence property services agency, Forsvarsbygg.

Restructuring – local and regional support measures

The Ministry of Defence, in collaboration with the Ministry of Local Government and Regional Development, has prepared a strategy for alleviating the adverse effects that the restructuring of the Armed Forces will inevitably have on some regions and individual municipalities. To assist in meeting the challenges facing the localities most affected, funding up to a maximum of NOK 250 million has been set aside for the period 2002-2005. The proposed allocation for 2002 is NOK 40 million. In addition, the possibility of decentralising some of the tasks currently carried out by the central authorities will be assessed in the context of the ongoing work of restructuring.

More extensive structure than that proposed by the Government

When considering the Long-Term Plan for the Armed Forces (LTP), the Storting endorsed a broader force structure and a more extensive organisation than had originally been proposed by the Government. Over the period 2002-2005, the overall expenditure required for the structure endorsed is estimated to be NOK 121.6 billion. This estimate does not include funding for the renewal of transport aircraft capacity and it assumes very limited investment in 5 Brigade and 12 Brigade. This sum corresponds to an average annual defence budget of NOK 30.4 billion. In order to meet the targets for the reductions in operating costs and personnel numbers endorsed by the Storting, the successful restructuring of the Armed Forces will require still further measures. The Government takes a very serious view of the unresolved imbalances between the tasks of the Armed Forces, their structure and the resources available. To ensure that the restructuring can be carried through, the Government will be putting additional measures before the Storting for consideration during the Spring session in 2002.