Counting the Cost of Intelligence: The Treasury, National Service and GCHQ

Abstract

Abstract If one were to choose a few key words to describe the post-war British intelligence community, one of them might well be ‘impecunious’. Scarcity of resource affected the development of intelligence no less than it did British defence policy. Yet while we know much about the political economy of British defence planning, we know almost nothing about intelligence spending. This essay argues that senior Treasury figures were important in the development of the core planning and control mechanisms for the British intelligence community. It uses the Government Communications Headquarters (GCHQ) and signals intelligence more broadly to provide illustrative examples of the extreme pressures brought about by the end of the British occupation of Germany, the abolition of National Service as a source of cheap intelligence labour and the rising costs of computers for code breaking. It analyses the impact of the Templer and Hampshire reviews as early attempts to grapple with the accelerating costs of intelligence. Finally, it argues that the most significant intelligence reform, introduced by the Cabinet Secretary Burke Trend in 1968, was the advent of the Cabinet Office Intelligence Co-ordinator as a financial troubleshooter. This was, however, by no means the end of the intelligence community’s financial troubles.