Source · Select Committees · Public Accounts Committee
Recommendation 17
17
Acknowledged
We are concerned that the Department seems reliant on delaying delivery of capabilities to keep...
Conclusion
We are concerned that the Department seems reliant on delaying delivery of capabilities to keep the Plan affordable.44 The Department told us that the £13.2 billion management adjustment for realism represented a small amount of over-programming, and was based on historical performance and its assessment of deliverability, with supply chain issues making it harder to spend money as planned.45 We are also concerned that the Plan does not include all the capabilities set out in the Integrated Review; if these were included in future years it would add further pressure on the affordability of the Plan.46 37 C&AG’s Report, paras 6, 7, Figure 4 38 Q 51 39 Qq 55, 56, 64 40 Q 54; C&AG’s Report, para 7 41 Q 54 42 Q 79 43 C&AG’s Report, para 10 44 Q 58 45 Qq 52, 56 46 C&AG’s Report, para 1.16, Figure 6 MoD Equipment Plan 2022–2032 13 External pressures
Government Response Summary
The department will provide an assessment of the key sources of uncertainty and risk in the forward plan in the next update to the committee; forecasting across ten-years is inherently uncertain, plans need to be flexible to adapt to change, and the equipment plan report includes an upper and lower cost estimate for the ten-year plan.
Government Response
Acknowledged
HM Government
Acknowledged
4.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2023 4.2 Forecasting across ten-years is inherently uncertain. In a complex plan with many large programmes, forecasts change as delivery schedules and cost estimates mature. Improving forecasting can help to reduce this risk, but the department’s plans need to be flexible to adapt to change. 4.3 The equipment plan report includes an upper and lower cost estimate for the ten-year plan based on uncertainty in key variables such as savings and efficiencies assumptions. To inform the costing ranges, the department carries out a rigorous annual process to review and challenge delivery teams’ costings through an independent assessment by the Cost Assurance and Analysis Service. 4.4 In the next update to the committee, the department will provide an assessment of the key sources of uncertainty and risk in the forward plan.