That was almost a decade ago, and it wasn't a modernisation - it was trying to build new aircraft using airframes from old planes that weren't built to a conforming standard (because before Mrs Thatcher British industry had a habit of "making things do" rather than making them well) and therefore proved far more expensive than was planned.
If the Challenger 2 is upgraded it might theoretically be sold at some point, but it sure as hell won't be thrown in the bin for an off-the-shelf purchase. There's little reason for the upgrade to go so badly wrong it needs to be scrapped.
British armored regime is broken into three major parts
Warrior
Although there has been reported cost overruns and three year delay on the Warrior Capability Sustainment Program. However thus far it seems to be a go. Unlike the Nimrod which was a total rebuild the majority of the WCSP is the turret and armor overhaul. The new turret with the 40mm gun and existing add on armor for a number of them with other warriors then reconfigured as recovery and APCs. Basically removal of the turret and reworking the interior. Unlike Bradley they don’t intend a full replacement until the 2040s.
Ajax
The New Ajax family of vehicles primarily in the form of the Ajax Armored recon vehicle.
Challenger II
CLEP Challanger Life Extension Program aims for a systematic upgrade. The hull of the vehicle is still sound as can be seen by other third gen MBT being updated right now the obsolescence is primarily systems not the whole. Updated Horstman suspension, modernized fire control and Commander’s sights, modernized crew stations, and retrofit with an APS. Rheinmetall additionally is shopping the MOD for a turret overhaul including either the 120mm smoothbore or 130mm smoothbore both of which would potentially extend the life of the CLEP from (Planned) 2035 life end date (2025 today) to longer.
Parallel to the CLEP is the HAAIP or Heavy Armour Automotive Improvement Programme which focuses on the automotive side of the tank and it’s common variants.
For these vehicles the biggest issues have been gun systems associated magazine, followed by engines. Every other issue is common to their equivalents abroad from Abram and Bradley to T90 and BMP3. Those other issues can be fixed in much the same way.
The main guns of the Warrior and Challanger though revolutionary when new in the long run lost ground in the long run, yet this can also be seen in their foreign peers. The scrapping of the British Armored forces would rendered the British army less effective in a great powers competition. The only currently active armored programs for the British being Ajax, (Strike Brigades) Boxer and their Multirole Vehicle program
Ajax as a replacement for Warrior might be doable, it’s based on the ASCOD2 platform which is an established IFV. However not a MBT And reconfiguring a new dedicated IFV would take more time and money. Boxer and the Strike Brigades are mechanized infantry along the same lines as Stryker BCT. MRV as indicated above are MRAPS and JLTV.