They only near term ways I could see it being improved, are by perhaps finding an agreement with LM and the affected other party, to grab a batch of C-130J's on the line, for diversion to the RAF. The customers for these aircraft agreeing to a later delivery of frames further down the line.
This would avoid a lot of the mods needed if a completed airframe(s) were taken up for RAF service.
There is some recent precedent, the ex Danish EH-101's, (which they could not yet operate), brought for the RAF to supplement another hard worked fleet. The Danes getting replacement ones from additional production.
More practical and addressing a specific need much discussed in the press, is to acquire, quickly, some current A330-200's with R/R engines. (With the downturn in the airline industry coming this might be very possible).
They would not be converted to tankers, at least yet, rather they'd get a RAF style seating/cabin arrangement and fitment of IRCM and military comms gear.
These airframes would be retained long term, at first they'd also contribute to training for the planned A330 tankers on order. After which they'd operate as RAF transports, the option for tanker conversion would be there but not for the near term.
Order two more C-17's while it's still in full production, as well as increasing the RAF order for A400M's to beyond the planned 25.
To spending, I think NATO should replicate what the organisation did 30 years ago, agree a minimum level of spending by NATO members. I doubt you'd get a level above 2.5% GDP but that would increase markedly spending for many members.
For the UK, up the level from the 2.7-2.8% level, to 3% at the next three year spending round.
This would in part be financed before (and after) the next spending round, by cancelling the planned ID card scheme. Increasingly unpopular, (with yet another scandal of government personal data being lost just this morning), technically a nightmare with zero public confidence in this respect of it.
Prior to the 2010-2012 spending round, cancelling this scheme would release several hundred million £ to the MoD.
But with a newly aggressive Russia, along with the current heavy commitments, there should be no major political objection to raising spending. The UK maintained higher levels of defence spending through the Cold War, often, in fact mostly, in much poorer economic conditions than now or likely in the near future.
Within the defence budget, cancel the slow, rather confused and expensive FRES programme.
This is to provide a replacement for many Army vehicles, particularly the CVR(T) series of the 1970's.
It is getting hard to choose a vehicle that can meet the requirements and still fit into a C-130J as well.
I note that in the last few years, the 1960's vintage FV432 vehicles, mainly replaced in the APC role by the Warrior, have been upgraded to meet the need for additional heavily protected vehicles shown up by Iraq in particular.
These vehicles got new engines, transmissions, upgraded armour, all the gadgetry such as comms and sights etc, making an effectively new vehicle quickly and cheaply, on budget and time, if not better.
Do the same for the CVR(T) vehicles in place of the upper (and expensive) end of the FRES requirement.
The Sabre light tank/recce vehicles would need a new turret with new weaponry and equipment, since the Warrior APC's are to get the same, merge the two.
With the range of CVR(T) vehicles covering light APC's, recce, engineering, ambulance, command vehicles, upgrading these in a similar manner to the FV432 will be a lot cheaper, quicker than FRES and best of these, these vehicles can already be transported in C-130's!
[Edited 2008-09-07 01:32:52]