Recommendation 14

The Department told us that its 2022–2032 Equipment Plan is affordable, as the equipment budget exceeds forecast costs by £2.6 billion (1% of budget). However, we noted that the aggregate surplus obscures financial pressures in the short-term and in some Top Level Budgets – those organisations, including front line commands, responsible for delivering defence outcomes within budgets delegated by the Department. The Plan is in deficit for the first seven years by £2.6 billion and is only affordable because of a £5.2 billion surplus in the final three years. Furthermore, over the full ten years, four out of six Top Level Budgets are in deficit.37 Most significantly, the Army’s equipment programme is more than £2 billion in deficit over the ten years of the Plan.38