Recommendation 5

The Department’s budget is under considerable pressure, and this may make some planned, future digital activity unaffordable. As inflation rises, the purchasing power of the Department’s existing budget falls. The Department is starting to see pressure build on its pay settlements and in the cost of raw materials, meaning it may be hard to deliver its digital strategy as originally planned. The Department’s longer-term funding position will only become clearer following the refresh of the Integrated Review in 2023. In addition to its military importance, the Department is also turning to digital technology to deliver administrative efficiencies. The Department’s target is to make £1.4 billion of cash savings from digital technology The Defence digital strategy 7 by 2032–33 and it is confident it will achieve this. However, the Department says it will no longer compromise on the funding programmes needed to keep systems updated over their lifetimes, to ensure that the issues it faces with its current legacy estate do not reoccur. It will take time and commitment for this, and existing efforts to upgrade existing legacy systems and data, to make a difference. The Department says that because digital transformation is a top priority that it will try to protect funding for its digital portfolio. However, it will need to stick to this approach for many years in what is likely to be a challenging budgetary position. Recommendation: Following the next update to the Integrated Review, the Department should write to us explaining whether planned and actual spend on digital has changed and whether it has enough funding to deliver the strategy.