Recommendation 2

The refreshed Integrated Review may revise judgements about operational requirements and identify new priorities which are not currently funded in the Equipment Plan. The Ukraine conflict has necessitated a refresh of the 2021 Integrated Review. The Department expected that the refresh would be completed in the first quarter of 2023 and that the core of the Equipment Plan would still hold good. The Government published the refresh in March 2023, but the Department will now have to reflect the changing priorities from the refresh in a further Command Paper, as well as reflecting lessons from Ukraine and recent announcements, such as the combat air partnership with Japan and Italy and the AUKUS partnership with the United States of America and Australia. The Department says it will argue for new capabilities and add these to the Equipment Plan if it secures additional funding from HM Treasury. However, it will need to prioritise investment decisions if new demands exceed available funding. The Department assumes that the refresh decisions will inform the Chancellor’s next Budget, planned for March 2023 at the time we took evidence, but it had not agreed the timetable. If the 2023 Budget does not fund the revised requirements, enacting the changed priorities might be delayed by a year. Furthermore, the Department has been slow to implement the capabilities set out in the original Integrated Review, several of which it has not fully funded in the two Equipment Plans since 2021. Recommendation 2: The Department should clearly set out to HM Treasury as soon as it can what capability requirements and priorities arise from the refreshed Integrated Review, the funding requirements to provide these, and the risks arising 6 MoD Equipment Plan 2022–2032 from any shortfall. We expect to see the Department reflect these decisions in the next Defence Command Paper and its 2023 Equipment Plan and will challenge the Department on the changes next year.