Source · Select Committees · Public Accounts Committee
Recommendation 21
21
We noted that £2.6 billion of the £4 billion savings—two thirds of the total—needs to...
Conclusion
We noted that £2.6 billion of the £4 billion savings—two thirds of the total—needs to be achieved by March 2025. This is despite the fact that contractual commitments limit TLBs’ flexibility to make savings, for example 62% of Air Command’s spend is already committed over the next ten years. Air Command believes that, as a result, it will need to reduce flying activity considerably, which will have consequences for aviators’ skills.45 The Department said in response it still believes the savings targets are realistic, but it will return to the targets each year to refine them. The latest position will be given in the next Plan, which the Permanent Secretary hopes will be published this Autumn.46 On the question about fewer flying hours, the Department told us that it is up to Air Command on how it manages its priorities, and that the target may reflect the move to more ‘synthetic’ training.47 Other pressures
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.