Source · Select Committees · Public Accounts Committee
Recommendation 20
20
Pressed on the £4 billion for which there are no plans yet, the Department explained...
Conclusion
Pressed on the £4 billion for which there are no plans yet, the Department explained that the target is based on an assumption of what the TLBs can deliver. The Department told us that Head Office scrutinises about 80 of the 400 projects in setting its savings targets for TLBs, as it is not possible to look at all the Department’s projects across all TLBs in any one year. The £4 billion is based on what it believes TLBs can find in the remaining 320 projects through re-scoping and re-prioritising work. Head Office’s aim is to set ‘taut but realistic’ budgets for each year of the Plan.44 36 Q127; NAO Figure 9 37 NAO report paragraphs 2.10, 2.15 and Figure 9 38 Q122 39 Q126 40 Q129 41 Qq 129–130 42 NAO report Figure 8 43 Q96 44 Q96 Ministry of Defence Equipment Plan 2021–31 13
Government Response
Not Addressed
HM Government
Not Addressed
The government agrees with the Committee’s recommendation. Recommendation implemented 3.2 This recommendation has been implemented and TLBs have targets and plans to achieve these savings. 3.3 As outlined in the Equipment Plan 2021-2031 (EP21), the department’s top level budget holders (TLBs) have planned £7 billion of cost reductions over ten years. The department closely monitors and scrutinises Top Level Budget (TLB) planned cost reductions in the annual budget cycle. If there are concerns about the deliverability of these savings the department would work with TLBs to identify remedial action. 3.4 As explained in EP21, the department considers that the savings are achievable. This was demonstrated in financial year 2020-21 when the department held spending to within budget without the need for a centrally directed savings exercise. 3.5 Further information on TLB cost reductions will be included in the upcoming Equipment Plan 2022 due to be published in Autumn 2022.