Recommendations & Conclusions
28 items
2
Conclusion
43rd Report - MoD’s oversight of Reserv…
Accepted
The government’s plans to increase the number of cadets by 30% by 2030 face several significant barriers. There are potentially great benefits for young people in expanding the cadet forces, which will mean increasing both the size and number of cadet units. Cadet forces can enhance social mobility and give …
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The government’s plans to increase the number of cadets by 30% by 2030 face several significant barriers. There are potentially great benefits for young people in expanding the cadet forces, which will mean increasing both the size and number of cadet units. Cadet forces can enhance social mobility and give confidence and structure to the most disadvantaged young people. The Minister for Veterans and People has told Parliament that the annual cost of the cadet forces is covered if just 3 1% of cadets change their life outcomes each year, so that they take part in education, training, or gain employment. The Department says that the cadet expansion plan has increased the number of cadet units in state schools, which accounts for 57% of school-based units, whereas independent schools used to account for about 70%. We were informed that there is no lack of interest from young people in joining the cadets, but there is a shortage of adult volunteers to run cadet units. The Department is still working out how to address this shortage. In doing so, it must ensure it maintains robust cadet safeguarding arrangements. Meanwhile, the devolved administrations of Scotland, Wales and Northern Ireland have responsibility for education and the Department’s approach to expanding the cadets within the devolved nations needs to take account of this. recommendation a. The Department should develop a plan by June 2026 (one year after the publication of the SDR) for increasing the number of cadets which sets out how it will: • ensure that young people from different backgrounds and all parts of the UK can join; • address barriers to expansion such as the number of adult volunteers; and • maintain robust safeguarding arrangements for the enlarged cadet forces. b. The Department should also set out how it will report on its progress, including regional breakdowns for the number of cadets, units and adult volunteers in the community cadets and Combined Cadet Force (including by type of sch
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Government response AI summary
The government agrees, but states that Defence Statistics already produces data on volunteer numbers, units, and regional breakdowns, and the joint MOD/DfE Cadet Expansion Project provides data on Combined Cadet Force units. It does not commit to developing the specific plan requested.
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HM Treasury
3
Conclusion
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department has not secured the legislative slot it needs for its preferred route forward, of streamlining the 13 RFCAs and the Council into a non-departmental public body (NDPB). Creating an NDPB requires legislation. However, the Department’s earlier plan to rationalise the RFCAs into an NDPB, which would simplify back-office …
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The Department has not secured the legislative slot it needs for its preferred route forward, of streamlining the 13 RFCAs and the Council into a non-departmental public body (NDPB). Creating an NDPB requires legislation. However, the Department’s earlier plan to rationalise the RFCAs into an NDPB, which would simplify back-office functions and clarify accountabilities, was thwarted by a lack of Parliamentary time before the 2024 general election. The Department still aims to establish an NDPB to bring better coherence and formality to the current arrangements, with a new board and chief executive to run the business. It is working to develop a bespoke NDPB which maximises local membership and engagement as well as making the organisation as efficient and effective as possible. Reserves and cadets join to serve locally, and central coordination needs to be combined with local implementation, by people who understand their 4 local environments. The Department says that the next opportunity to set up an NDPB will be through an Armed Forces Bill, which it is due to produce by the end of 2026. recommendation The Department should write to the Committee by 31 March 2026 with an update on its progress in establishing an NDPB. This should include details of how it will ensure the correct balance between the operational effectiveness of the NDPB with the benefits of having local volunteer input.
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Government response AI summary
The government agrees, stating the NDPB proposal is being developed for potential inclusion in the 2026 Armed Forces Bill, with work continuing to ensure local volunteer input is embedded. The department commits to providing updates on this progress as requested by the Committee.
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HM Treasury
4
Conclusion
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department will need to continue to manage around the limitations of its current oversight arrangements for the RFCAs until it has established an NDPB. The Department has improved its oversight of the RFCAs since 2019, implementing around 70% of the Sullivan Review’s recommendations either fully or partially. It now …
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The Department will need to continue to manage around the limitations of its current oversight arrangements for the RFCAs until it has established an NDPB. The Department has improved its oversight of the RFCAs since 2019, implementing around 70% of the Sullivan Review’s recommendations either fully or partially. It now has a single senior responsible owner, the Assistant Chief of the Defence Staff (Reserves and Cadets), to coordinate the Department’s various stakeholders who deal with the RFCAs. A sponsor board meets twice a year to review RFCAs’ performance. The Department has improved the service level agreements in which the armed forces specify their requirements for the RFCAs. However, the system still relies too much on the Council and RFCA officials’ shared aims and values, and it lacks clear and well-understood escalation processes when issues cannot be locally resolved. A ‘consequence culture’ where officials are truly accountable for poor performance is not yet embedded. The Department says it is now at an ‘inflection point’ where the governance and oversight of the RFCAs needs to be fit for purpose to support the ambitions in the SDR. recommendation Alongside its Treasury Minute response, the Department should write to the Committee setting out how it will enhance accountability for the performance of the RFCAs under the current arrangements, pending the establishment of an NDPB.
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Government response AI summary
The government agrees, outlining that performance monitoring has been sharpened, KPIs established, a sponsor appointed, and an updated financial framework agreed to enhance accountability under current arrangements. It commits to providing updates on this progress as requested by the Committee.
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HM Treasury
5
Conclusion
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department does not have a modernised and fit-for-purpose volunteer estate to support the enhanced roles of the reserves and cadets. The reserve training sites are the basis for mobilising the reserves, while having accommodation for thousands of cadet units to operate across the UK provides an important, nationwide presence. …
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The Department does not have a modernised and fit-for-purpose volunteer estate to support the enhanced roles of the reserves and cadets. The reserve training sites are the basis for mobilising the reserves, while having accommodation for thousands of cadet units to operate across the UK provides an important, nationwide presence. However, the volunteer estate has been in a state of managed decline, and it has too many sites— around 2,500—some of which are not in the right places. The Department has started an estate optimisation programme, initially focusing on disposals. It now wants to consolidate some sites, establishing 5 super reserve centres with additional facilities such as car parking, accommodation and feeding facilities. This will require investment, but the Department has not yet secured funding for future phases of this work. Meanwhile, the Department has brought the maintenance of the volunteer estate into its wider defence estate maintenance contract. There have been teething problems with this contract, with one supplier not delivering what it should. The Department also misunderstood RFCAs’ liability to pay VAT on work done through this contract, meaning that RFCAs have had less money available for maintenance than expected. The Department is discussing the VAT issue with HM Revenue & Customs (HMRC). Resolving it may require either a site-by-site review of the ownership of RFCA sites or addressing it as part of forming the RFCAs into an NDPB. recommendation To establish and maintain an optimised volunteer estate the Department should: a. ensure due consideration is given to the volunteer estate in its balance of investment decisions as it develops its defence investment plan which it is committed to completing in autumn 2025; and b. write to the Committee alongside its Treasury Minute response, regarding progress on its discussions with HMRC relating to the RFCAs’ VAT status.
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Government response AI summary
The government agrees and commits to providing updates on its progress with discussions with HMRC, which will consider the case and provide guidance on recovering VAT incurred on maintaining the volunteer estate.
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HM Treasury
6
Conclusion
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department’s arrangements for monitoring and reporting on the RFCAs’ financial performance are inadequate. The RFCAs’ accounts have been produced very late in recent years. The Department published the RFCAs accounts for 2020–21, 2021–22 and 2022–23 together, in October 2024, which means that some information about the Council and the …
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The Department’s arrangements for monitoring and reporting on the RFCAs’ financial performance are inadequate. The RFCAs’ accounts have been produced very late in recent years. The Department published the RFCAs accounts for 2020–21, 2021–22 and 2022–23 together, in October 2024, which means that some information about the Council and the RFCAs’ financial performance was not publicly available until more than four years after it had occurred. The Department had not published the 2023–24 accounts at the time of our inquiry, more than a year after the end of that financial year. Despite the RFCAs receiving £146 million of public money in 2023–24, the Department does not have an overall financial framework for them which complies with HM Treasury requirements. The Department began developing a new financial framework in 2022, but this is still not in place: it is currently with HM Treasury for comment, and the Department says that it expects to finalise it in the next few months. In addition, some of the RFCAs’ financial reporting is not compliant with HM Treasury and International Financial Reporting Standards. For example, the Council, which consolidates the accounts of the 13 RFCAs, was unaware that it should include a cash flow statement and the Department did not pick them up on this omission. 6 recommendation As a matter of urgency, the Department should: a. agree and implement a HM Treasury-compliant financial framework; b. publish the RFCAs’ accounts for 2023–24 in a format that complies with the applicable HM Treasury and international accounting standards; and c. work with the Council to ensure that in future the RFCAs understand the requirements they must comply with and are equipped to do so. 7 1 The Ministry of Defence’s vision for the RFCAs Introduction
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Government response AI summary
The government agrees, stating it has already funded a professionally qualified Finance Director and agreed a Treasury-compliant financial framework. The department commits to working closely with RFCAs to ensure full compliance with public financial requirements and will provide updates on progress.
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HM Treasury
1
Conclusion
43rd Report - MoD’s oversight of Reserv…
Accepted
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Defence (the Department) and the Council of Reserve Forces’ and Cadets’ Associations (the Council) on their oversight and support of the Reserve Forces’ and Cadets’ Associations (RFCAs).1
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On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Defence (the Department) and the Council of Reserve Forces’ and Cadets’ Associations (the Council) on their oversight and support of the Reserve Forces’ and Cadets’ Associations (RFCAs).1
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Government response AI summary
The government agrees, stating it is planning to introduce legislative measures in the next Armed Forces Bill to remove barriers to reserve service and increase Active Reserves. It also commits to planning the reinvigoration of the Strategic Reserve, including scoping engagement and a digitised management …
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HM Treasury
7
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department said that the needs of the reserves would be considered in the defence investment plan it would be developing over the summer of 2025, which would confirm the sequencing of the priorities identified in the SDR. However, the Department recognised that it needed to make some investments in …
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The Department said that the needs of the reserves would be considered in the defence investment plan it would be developing over the summer of 2025, which would confirm the sequencing of the priorities identified in the SDR. However, the Department recognised that it needed to make some investments in support of the reserves this Parliament.9 A key priority 5 Q 2; C&AG’s Report, para 4 6 C&AG’s Report, paras 1.2 and 1.3 7 Qq 2 and 4; C&AG’s Report, para 1.5; Ministry of Defence, Strategic Defence Review – Making Britain Safer: secure at home, strong abroad, 2025, Part 4.3 para 5 and Recommendation 14. 8 Qq 43 and 59 9 Qq 1, 15 and 44 9 for the Department was reinvigorating its relationship with the Strategic Reserve of ex-regular personnel who have a liability to be recalled into the armed forces. This would require the Department to establish a digital solution by early 2027 to improve reserves’ management, which the Department noted was a tight timescale to meet.10
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Government response AI summary
The MOD ensures due consideration is given to the volunteer estate in its balance of investment decisions through a structured, evidence-based approach. Funding decisions are prioritised according to impact.
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HM Treasury
8
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department said that engaging with society and employers was essential. Effective engagement with employers, building on the RFCAs’ Defence Relationship Management function and securing employers’ support for their staff to be involved in the reserves, will be important for the Department achieving its ambitions.11 The Department emphasised the huge …
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The Department said that engaging with society and employers was essential. Effective engagement with employers, building on the RFCAs’ Defence Relationship Management function and securing employers’ support for their staff to be involved in the reserves, will be important for the Department achieving its ambitions.11 The Department emphasised the huge success of its employer engagement, which had exceeded its expectations having increased the number of employer accounts from fewer than 1,000 to more than 13,000. It explained that the RFCAs were adopting a customer-segmentation approach so they could most effectively use the resources available given that their workforce and budget had remained largely unchanged for seven years. This meant focusing on larger national employer accounts at a national level and using regional teams to manage local accounts.12 Increasing cadet numbers
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Government response AI summary
The Department must set out by 31 March 2026 its plan for how it will significantly enhance the skills, scale and agility of both the Active and the Strategic Reserves and provide Parliament with regular updates on its progress in achieving its ambition.
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HM Treasury
9
Conclusion
43rd Report - MoD’s oversight of Reserv…
Deferred
Cadet forces are made up of young people typically aged from 12 to 18 and provide them with interesting and challenging activities and life skills. The Department said that the cadets help to develop the nation’s youth, enhance social mobility and give confidence and structure to the most disadvantaged. The …
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Cadet forces are made up of young people typically aged from 12 to 18 and provide them with interesting and challenging activities and life skills. The Department said that the cadets help to develop the nation’s youth, enhance social mobility and give confidence and structure to the most disadvantaged. The Minister for Veterans and People has told Parliament that the annual cost of the cadet forces is covered if just 1% of cadets change their life outcomes each year, so that they take part in education, training, or gain employment.13
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Government response AI summary
The Government refers to recommendation 2a. PAC recommendation which is the same as the one given for ID 4029.
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HM Treasury
10
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
As of 1 April 2024, there were approximately 3,500 cadet units across the UK and 139,960 cadets. Of these, 88,600 cadets were in community units, supported by 22,340 adult volunteers, and 51,360 in the school- based Combined Cadet Force, supported by 4,320 adult volunteers. The Department welcomed the ambition set …
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As of 1 April 2024, there were approximately 3,500 cadet units across the UK and 139,960 cadets. Of these, 88,600 cadets were in community units, supported by 22,340 adult volunteers, and 51,360 in the school- based Combined Cadet Force, supported by 4,320 adult volunteers. The Department welcomed the ambition set out in the SDR to expand the cadet forces by 30% by 2030, with an ambition to reach 250,000 in the longer term, and told us that it did not believe that this proposed expansion posed a significant risk to other youth organisations such as the Scouts 10 Qq 2, 4, 15, 43 and 44 11 Q 49; C&AG’s Report, para 16 12 Qq 46, 47 and 48 13 Q 8; C&AG’s Report, para 1.2; Written answer 28 January 2025, UIN 26238 10 and Guides.14 The Department said in a letter following our evidence session that those organisations have much greater age ranges, are more accessible because of their greater presence across the UK and have a different appeal to the cadet forces.15
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Government response AI summary
The Department will develop a plan by June 2026 for increasing the number of Cadets which sets out how it will ensure that young people from different backgrounds and all parts of the UK can join, address barriers to expansion such as the number of …
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HM Treasury
11
Conclusion
43rd Report - MoD’s oversight of Reserv…
Deferred
The Department also described in its letter the cadet safeguarding arrangements that it has in place. Each of the armed forces is responsible for safeguarding its cadets, but they adhere to the same basic safeguarding principles set out in the Department’s Cadet Safeguarding Framework. All adult volunteers and cadet-facing RFCA …
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The Department also described in its letter the cadet safeguarding arrangements that it has in place. Each of the armed forces is responsible for safeguarding its cadets, but they adhere to the same basic safeguarding principles set out in the Department’s Cadet Safeguarding Framework. All adult volunteers and cadet-facing RFCA employees must have the correct disclosure and barring service (DBS) check and undergo safeguarding training. The Department explained that it uses a three-tier approach to provide assurance that these safeguarding arrangements are working, which combines activities at individual unit level with management oversight and independent review.16
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Government response AI summary
The Government refers to recommendation 2a. PAC recommendation which is the same as the one given for ID 4029.
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HM Treasury
12
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department highlighted the success of the Cadet Expansion Programme which had already increased cadet force numbers in schools. The Department said that this had led to a real democratisation of the cadet movement. It reported that 57% of the school-based cadet units now came from the state sector, whereas …
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The Department highlighted the success of the Cadet Expansion Programme which had already increased cadet force numbers in schools. The Department said that this had led to a real democratisation of the cadet movement. It reported that 57% of the school-based cadet units now came from the state sector, whereas independent schools used to account for about 70% of them, although units at independent schools tend to be larger and account for 61% of cadet numbers.17
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Government response AI summary
The development of a programme plan for the growth in Cadet numbers is well underway and a Director level Senior Responsible Officer has been appointed. Work is in train within the department to determine the key target areas for growth and a priority is to …
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HM Treasury
13
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
The Council explained that each of the armed forces would decide how to accommodate more cadets, through a combination of increasing the size and number of cadet units. The RFCAs would then support the chosen approach.18 The Department said that there was no lack of interest in young people wanting …
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The Council explained that each of the armed forces would decide how to accommodate more cadets, through a combination of increasing the size and number of cadet units. The RFCAs would then support the chosen approach.18 The Department said that there was no lack of interest in young people wanting to join the cadets. However, the Department stressed that expansion is dependent on having the adult volunteers who run the cadets, and that the shortage of these was an issue. The Department is still working out how to address this shortage. It acknowledged that it would need to review and improve the proposition for adult volunteers, for example by giving them the necessary support and, where appropriate, financial remuneration.19 However, the Department also explained that the issue 14 Q 7; C&AG’s Report, para 1.4; Ministry of Defence, Strategic Defence Review, 2025, Part 1 para 23 and Recommendation 26; Letter from Ministry of Defence PUS, 9 July 2025, para 18 15 Letter from Ministry of Defence PUS, 9 July 2025, paras 18 to 20 16 Letter from Ministry of Defence PUS, 9 July 2025, paras 1 to 17; C&AG’s Report, paras 2.23 and 2.24 17 Qq 7 and 19; letter from Assistant Chief of Defence Staff Reserves and Cadets, 27 June 2025; C&AG’s Report, paras 1.5 and 2.22 18 Q 51 19 Qq 7, 51 and 53 11 should be examined across the whole of society: for example, it claimed that the introduction of VAT on private school fees had affected some schools’ ability to employ additional staff to look after cadet activities.20
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Government response AI summary
The government agrees to develop a plan by June 2026 for increasing the number of Cadets, ensuring accessibility for diverse backgrounds and regions, addressing barriers like volunteer shortages, and maintaining robust safeguarding arrangements. A programme plan is underway with regular meetings, a Senior Responsible Officer, …
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HM Treasury
14
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department said that it is working with the Department for Education to develop the new science, technology, engineering and mathematics (STEM) capabilities, such as drone flying and cyber, which cadets need. This would support the UK’s wider STEM agenda.21 The Department told us that the Cadet Expansion Programme was …
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The Department said that it is working with the Department for Education to develop the new science, technology, engineering and mathematics (STEM) capabilities, such as drone flying and cyber, which cadets need. This would support the UK’s wider STEM agenda.21 The Department told us that the Cadet Expansion Programme was now UK-wide, and that it had held discussions with the education departments in the devolved administrations of Scotland, Wales and Northern Ireland about it. The response to the programme in the devolved nations had been mixed: the model adopted in Scotland had not proved successful; in Wales there had been a lack of enthusiasm; and while there has been more interest in Northern Ireland, a lack of capacity in the armed forces to support it has restricted further expansion. However, the Council noted that the local knowledge the RFCAs based in the devolved nations had helped with these discussions and that each RFCA employed a school cadet engagement officer.22 Establishing an NDPB
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Government response AI summary
The government agrees to develop a plan by June 2026 for increasing the number of Cadets, ensuring accessibility for diverse backgrounds and regions, addressing barriers like volunteer shortages, and maintaining robust safeguarding arrangements. A programme plan is underway with regular meetings, a Senior Responsible Officer, …
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HM Treasury
15
Conclusion
43rd Report - MoD’s oversight of Reserv…
Not Addressed
One of the two headline recommendations in the Department’s 2019 review of the RFCAs was to regularise and streamline the Council and 13 RFCAs into a single NDPB. This would provide a clear governance structure that aligned with government policy to transmit, delegate, implement and enforce decisions. However, creating an …
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One of the two headline recommendations in the Department’s 2019 review of the RFCAs was to regularise and streamline the Council and 13 RFCAs into a single NDPB. This would provide a clear governance structure that aligned with government policy to transmit, delegate, implement and enforce decisions. However, creating an NDPB requires primary legislation, and the Department’s earlier plan to create the necessary legislation was thwarted by a lack of Parliamentary time before the 2024 general election.23
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Government response AI summary
The item notes that the Department's plan to create the necessary legislation for an NDPB was thwarted by a lack of Parliamentary time. The government response is about establishing an NDPB, which is related but doesn't directly address the points raised.
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HM Treasury
16
Conclusion
43rd Report - MoD’s oversight of Reserv…
Not Addressed
The Department confirmed that establishing an NDPB remained its preferred route forward. This would facilitate a streamlined organisation, simplify back-office functions and clarify accountabilities. The Department said that the next opportunity for the necessary legislation would be in the Armed Forces Bill, which it is obliged to update by the …
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The Department confirmed that establishing an NDPB remained its preferred route forward. This would facilitate a streamlined organisation, simplify back-office functions and clarify accountabilities. The Department said that the next opportunity for the necessary legislation would be in the Armed Forces Bill, which it is obliged to update by the end of 2026.24
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Government response AI summary
The item confirms that establishing an NDPB remained the Department's preferred route forward. The government response is about establishing an NDPB, which is related but doesn't directly address the points raised.
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HM Treasury
17
Conclusion
43rd Report - MoD’s oversight of Reserv…
Not Addressed
The Department said that the challenge is to balance the need for a professional and effective national organisation that can be held to account, with the ability to leverage the membership’s volunteer spirit. It said that there was an ongoing conversation with the RFCAs around 20 Qq 17 and 18 …
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The Department said that the challenge is to balance the need for a professional and effective national organisation that can be held to account, with the ability to leverage the membership’s volunteer spirit. It said that there was an ongoing conversation with the RFCAs around 20 Qq 17 and 18 21 Q 53 22 Qq 54 and 55; Letter from Assistant Chief of Defence Staff Reserves and Cadets, 27 June 2025 23 Q 2; C&AG’s Report, paras 1.15 and 1.18 24 Qq 3 and 11 12 how to develop bespoke structures which will make the organisation as effective and efficient as possible while maximising local membership and preserving, enhancing and supporting the RFCAs’ volunteer work and their insights and expertise.25 The Council explained that reserves and cadets join to serve locally, and central coordination needs to be combined with local implementation by people who understand their local environments. The Council said that it did not believe that much will change for those carrying out the work within the RFCAs at a local level, but that the formalised structure would improve coherence and coordination. It thought that the move to an NDPB would bring the benefits of central direction while maintaining the local knowledge of those who do the work.26 25 Qq 3, 6 and 11 26 Q 12 13 2 Risks and limitations of the current RFCA model The Ministry of Defence’s current oversight of the RFCAs
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Government response AI summary
The item discusses the challenge of balancing a professional national organisation with leveraging volunteer spirit, and the Council's belief that an NDPB would bring benefits of central direction while maintaining local knowledge. The government response is about establishing an NDPB, which is related but doesn't …
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HM Treasury
18
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department said it is now at an ‘inflection point’ where the governance and oversight of the RFCAs needs to be fit for purpose to support the ambitions in the SDR. In part, the Department intends to achieve this through its desired creation of an NDPB. It explained that other …
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The Department said it is now at an ‘inflection point’ where the governance and oversight of the RFCAs needs to be fit for purpose to support the ambitions in the SDR. In part, the Department intends to achieve this through its desired creation of an NDPB. It explained that other elements involved embedding good governance and oversight and making sure that the current information flow and the relationships between the Department and the Council were in the right place.27
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Government response AI summary
The Department will write to the Committee by 31 March 2026 with an update on its progress in establishing an NDPB, including details of how it will ensure the correct balance between the operational effectiveness of the NDPB with the benefits of having local volunteer …
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HM Treasury
19
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department said that its oversight of the RFCAs had improved since the publication of the Sullivan Review in 2019, and that it had fully or partially implemented around 70% of the Review’s 80 recommendations. It now has a single senior responsible owner, the Assistant Chief of the Defence Staff …
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The Department said that its oversight of the RFCAs had improved since the publication of the Sullivan Review in 2019, and that it had fully or partially implemented around 70% of the Review’s 80 recommendations. It now has a single senior responsible owner, the Assistant Chief of the Defence Staff (Reserves and Cadets), to coordinate the Department’s various stakeholders who deal with the RFCAs. The Department has also established a sponsor board, which meets twice a year, where it gets all the frontline commands and other key stakeholders, such as the Defence Infrastructure Organisation, around the table to discuss and hold to account the RFCAs to deliver the outputs that defence needs.28
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Government response AI summary
The government agrees to write to the Committee setting out how it will enhance accountability for the performance of the RFCAs under the current arrangements, pending the establishment of an NDPB. Performance monitoring has been sharpened through Service Level Agreements which include clearer, quantifiable Key …
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HM Treasury
20
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
In recent years the Department has improved the quality of the five service level agreements (SLAs) that it has with the Council, which set out what the armed forces and Department require the RFCAs to deliver each year. The Department reviews progress against the SLAs three times a year, and …
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In recent years the Department has improved the quality of the five service level agreements (SLAs) that it has with the Council, which set out what the armed forces and Department require the RFCAs to deliver each year. The Department reviews progress against the SLAs three times a year, and it told us that this has provided discipline and focus that was previously lacking and which was starting to change behaviour.29 However, the system relies on the Council and RFCA officials’ shared aims and values, and it lacks clear and well-understood escalation processes when issues cannot be 27 Q 2 28 Qq 9 and 10; C&AG’s Report, para 1.18 29 Qq 9, 10, and 21 to 23; C&AG’s Report, para 2.5 14 resolved locally. The Department said that it would not be easy to establish a ‘consequence culture’, where officials are truly accountable for poor performance, without establishing an NDPB.30 The volunteer estate
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Government response AI summary
Accountability for the RFCAs has been enhanced since the 2019 Sullivan Review and performance monitoring has been sharpened, the MOD appointed a single departmental sponsor, service level agreements have been refreshed to include clearer KPIs, and the Senior Team regularly reviews and monitors performance of …
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HM Treasury
21
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
Stewardship of the volunteer estate is one of the RFCAs’ core activities. The volunteer estate, which provides the essential infrastructure that the cadets and reserves need to operate, is made up of around 2,500 sites which are widely dispersed around the UK and range from cadet huts to multipurpose reserve …
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Stewardship of the volunteer estate is one of the RFCAs’ core activities. The volunteer estate, which provides the essential infrastructure that the cadets and reserves need to operate, is made up of around 2,500 sites which are widely dispersed around the UK and range from cadet huts to multipurpose reserve centres. The reserve training sites are the basis for training and mobilising the reserves, while accommodation for cadet units provides an important nationwide presence.31
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Government response AI summary
The Department will write to the Committee alongside its Treasury Minute response, setting out how it will enhance accountability for the performance of the RFCAs under the current arrangements, pending the establishment of an NDPB.
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HM Treasury
22
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department said that the volunteer estate was a critical enabler for it to deliver the ambitions for increasing the numbers of reserves and cadets set out in the SDR. However, the Department told us that the estate had been in a state of managed decline, and that it had …
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The Department said that the volunteer estate was a critical enabler for it to deliver the ambitions for increasing the numbers of reserves and cadets set out in the SDR. However, the Department told us that the estate had been in a state of managed decline, and that it had too many sites, some of which are not in the right places.32 The Department has started an estate optimisation programme to dispose of unneeded sites and modernise others to better serve the needs of cadets and reserves. It explained that it aimed to provide the right facilities in the right locations, balancing the need for sites near urban centres with maintaining sites in more remote areas too. By December 2024, the first phase of the programme had brought in £6.8 million from the disposal of 64 sites, and it had plans to sell 46 more, with forecast receipts of £7.7 million. The Department has reinvested these receipts in the remaining estate, and by December 2024 the programme had completed or started renovation at 85 sites costing £38.1 million.33
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Government response AI summary
The MOD ensures due consideration is given to the volunteer estate in its balance of investment decisions and will write to the Committee alongside its Treasury Minute response, regarding progress on its discussions with HMRC relating to the RFCAs’ VAT status.
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HM Treasury
23
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department has planned two further phases of the estate optimisation programme. It envisages these will consolidate some sites, establishing multidisciplinary super reserve centres with additional facilities such as car parking, accommodation and feeding facilities.34 However, the Department has not yet secured funding for these phases of the programme, and …
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The Department has planned two further phases of the estate optimisation programme. It envisages these will consolidate some sites, establishing multidisciplinary super reserve centres with additional facilities such as car parking, accommodation and feeding facilities.34 However, the Department has not yet secured funding for these phases of the programme, and it was unable to give us a firm timeline for the completion of the programme. The Department explained that funding for the volunteer estate would compete with other priorities for investment choices when it developed its 30 Qq 23 to 25; C&AG’s Report, para 2.8 31 Qq 17, 38, 40, 43 and 58; C&AG’s Report, para 1.7 32 Qq 26 and 40 33 Qq 26 to 28, 36, 38 and 40; C&AG’s Report, para 2.21 34 Q 38 15 defence investment plan, which it was due to complete in autumn 2025, and said it was confident that the estate’s requirements would feature in the debate.35
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Government response AI summary
The government agrees to ensure due consideration is given to the volunteer estate in its investment decisions as it develops its defence investment plan by Autumn 2025. It will assess the volunteer estate alongside the wider defence estate using criteria including operational relevance, value for …
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HM Treasury
24
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
Since August 2024, the maintenance and repair of the volunteer estate has been brought under the Department-wide Future Defence Infrastructure Services (FDIS) estate maintenance contract; previously, each RFCA had delivered these services through local contracts. This was intended to improve compliance, management information and supplier performance monitoring for the estate.36 …
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Since August 2024, the maintenance and repair of the volunteer estate has been brought under the Department-wide Future Defence Infrastructure Services (FDIS) estate maintenance contract; previously, each RFCA had delivered these services through local contracts. This was intended to improve compliance, management information and supplier performance monitoring for the estate.36 There have been some initial teething problems, with suppliers not meeting all their performance measures. The Council recognised that, as with the introduction of any large contract, teething problems were normal, and said that these had largely been resolved. There was one contract where issues were still outstanding, but work was ongoing to improve performance.37
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Government response AI summary
The government agrees to ensure due consideration is given to the volunteer estate in its investment decisions as it develops its defence investment plan by Autumn 2025. It will assess the volunteer estate alongside the wider defence estate using criteria including operational relevance, value for …
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HM Treasury
25
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department had not anticipated that the RFCAs would be liable to pay VAT on work done through the FDIS contract, which has resulted in the RFCAs having had less money available for maintenance than expected. The Department explained that the crux of the issue was ownership of the estate …
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The Department had not anticipated that the RFCAs would be liable to pay VAT on work done through the FDIS contract, which has resulted in the RFCAs having had less money available for maintenance than expected. The Department explained that the crux of the issue was ownership of the estate which had been built up over 100 years through donations, departmental funding and purchases by the RFCAs themselves. VAT can be clawed back on assets owned by the Department, and HM Revenue & Customs has proposed that the Department conducts a site-by-site review to establish ownership for tax purposes.38 The Department added that the move to an NDPB may provide an opportunity to review the VAT arrangements as the built estate would sit on the NDPB’s accounts and would then be consolidated into the Department’s accounts.39 Financial oversight
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Government response AI summary
The Department submitted a formal submission to HMRC on 1 December 2025 to consider the case and provide further opinion and guidance on what evidence or actions are necessary to be able to recover VAT incurred by MOD on maintaining the volunteer estate and will …
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HM Treasury
26
Recommendation
43rd Report - MoD’s oversight of Reserv…
Rejected
For the past four years, the Department has failed to publish the Council’s Annual Report and Accounts in a timely manner, and the Department acknowledged that the process was much longer and more protracted than it would like. It published the accounts for 2020–21, 2021–22 and 2022–23 together in October …
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For the past four years, the Department has failed to publish the Council’s Annual Report and Accounts in a timely manner, and the Department acknowledged that the process was much longer and more protracted than it would like. It published the accounts for 2020–21, 2021–22 and 2022–23 together in October 2024, which meant that some information about the Council and the RFCAs’ financial performance was not publicly available until more than four years after it had occurred. At the time of our inquiry, the Department had not published the 2023–24 accounts, more than 35 Qq 39 to 42; C&AG’s Report, para 2.21 36 Q 29; C&AG’s Report, para 2.18 37 Q 29; C&AG’s Report, para 2.19 38 Q 34; C&AG’s Report, para 2.20 39 Q 37 16 a year after the end of that financial year.40 The Department said that delays in publishing the accounts were in part due to the structure in which it operates, whereby accounts are prepared by each of the 13 RFCAs and then consolidated by the Council. While the Council is responsible for producing a consolidated Annual Report and Accounts, the Department is responsible for publishing it.41 The Department said that in the longer term, the answer would lie in setting up an NDPB as a single entity, resulting in a streamlined approach to financial accounting. It added that, in the short term, it was looking at ways to speed up the process to publish accounts. This included the Council ensuring that the RFCAs had common processes and systems that would speed up the supply of financial information to it.42
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Government response AI summary
The government disagrees with the recommendation but will lay the Financial Years 2023-24 and 2024-25 accounts as planned in 2025-26 to provide the required transparency.
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HM Treasury
27
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
Some of the RFCAs’ financial reporting has not complied with HM Treasury guidance and International Financial Reporting Standards. For example, the RFCAs’ accounts have not included a cash flow statement, nor have they correctly disclosed a defined benefit pension scheme for employees. Non-compliance with these rules has created an inconsistency …
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Some of the RFCAs’ financial reporting has not complied with HM Treasury guidance and International Financial Reporting Standards. For example, the RFCAs’ accounts have not included a cash flow statement, nor have they correctly disclosed a defined benefit pension scheme for employees. Non-compliance with these rules has created an inconsistency in the financial reporting between the Department and the Council.43 The Council accepted responsibility and acknowledged that initially it did not have a good understanding of the Treasury’s financial reporting manual or guidance on preparing an annual report and accounts. The Council insisted, however, that the accounts have still been audited and that it knew how the money had been received and spent. The Council noted that the Department had also not picked up on the missing cash flow statements but, now that both the Department and the Council were aware of it, a cash flow statement would be included in future accounts.44
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Government response AI summary
The department is committed to supporting the RFCAs and ensuring that they meet the required financial standards and has already funded a professionally qualified Finance Director as recommended in the 2019 review and will work closely with the RFCAs to ensure full compliance with public …
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HM Treasury
28
Recommendation
43rd Report - MoD’s oversight of Reserv…
Accepted
The Department told us that over the last two years it had strengthened its financial oversight of the RFCAs and that monthly conversations between finance teams meant that it understood performance and risks.45 However, the Department did not have an overall financial framework for the RFCAs which complied with HM …
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The Department told us that over the last two years it had strengthened its financial oversight of the RFCAs and that monthly conversations between finance teams meant that it understood performance and risks.45 However, the Department did not have an overall financial framework for the RFCAs which complied with HM Treasury requirements. In April 2022 the Department asked HM Treasury to review its existing financial framework with the Council and the review raised concerns about its compliance with HM Treasury rules. The Department had begun work on a new financial framework which would address these concerns but has not yet completed it. It said it had been waiting for governance reforms to play through so that these could be reflected in the new framework, but that a finalised draft 40 Qq 68 to 70 and 72; C&AG’s Report, para 2.28 41 Qq 68 and 69; C&AG’s Report, para 2.28 42 Qq 69 and 71 43 Qq 73 to 81; C&AG’s Report, paras 2.29 and 2.30 44 Qq 73 to 76 45 Qq 63 and 64 17 was currently with HM Treasury for review. The Department explained that the next step would be to respond to comments from HM Treasury and that it expected to publish the new framework in the next few months.46 46 Qq 63 to 66; C&AG’s Report, para 2.26 18
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Government response AI summary
The Department implemented this recommendation on 18 August 2025.
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HM Treasury