Recommendation 17

The Department told us that it was confident that the Dreadnought programme would not exceed its lifetime budget of £31 billion plus £10 billion contingency.38 It did not agree that the contingency amounted to a blank cheque, and said that HM Treasury only gave out its funds based on the Department driving the schedule and proving value for money.39 The Department also claimed that there had been significant improvements in management of the nuclear projects in the last two years, primarily as a result of setting up the Submarine Delivery Agency and the Defence Nuclear Organisation, which act effectively as a contractor and client. In addition, the establishment of the ‘Alliance’ relationship with industry should ensure lessons are learned and a proper partnership is in place to aid delivery.40