Recommendation 16

We considered the Department’s controls over the costs of the Plan’s largest programmes, in particular the nuclear projects such as Dreadnought submarines and the replacement Warhead programme. As the NAO notes, nuclear projects amount to about £60 billion in the Plan, which is more than a quarter of its value.34 We were particularly concerned that the Department sees the nuclear projects as a blank cheque from HM Treasury, especially the Dreadnought programme which has a £10 billion contingency.35 We noted that, between 2018 and 2020, the NAO had identified over £1 27 Q24 28 Q28 29 Q29 30 NAO report Figure 2 31 Q31 32 Q94 33 Q95 34 NAO report Figure 9 35 Q126 12 Ministry of Defence Equipment Plan 2021–31 billion of unnecessary costs on nuclear projects because of poor management decisions.36 We also noted that the Department’s Cost Assurance and Analysis Service concluded that the Department has under-forecast nuclear project costs in the Plan by £4.8 billion.37