Source · Select Committees · Public Accounts Committee
Recommendation 24
24
In addition to these reductions, the Department’s spending plans currently assume further workforce savings of...
Conclusion
In addition to these reductions, the Department’s spending plans currently assume further workforce savings of £2.5 billion over the 10 years to March 2031.52 The Department told us that plans had not yet been drawn up to achieve these reductions, and they will be subject to agreement in the next spending review.53 In terms of wages, the Department admitted it does not know how it will afford the pay rises likely to be required as a result of higher inflation and wage growth in the wider economy in the next few years. The Department told us it was looking at a range of options, and now has pay freedoms to recruit more highly skilled staff, particularly in programme and project management.54 45 NAO report, paragraphs 12, 2.17 46 Q97 47 Q101 48 NAO report, paragraph 2.28 49 Q28 50 C&AG’s Report, para 2.29 51 Q102 52 C&AG’s report, para 2.30 53 Q112 54 Q115 14 Ministry of Defence Equipment Plan 2021–31
Government Response
Not Addressed
HM Government
Not Addressed
4.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2022 4.2 The department recognises the importance of managing risks to affordability, particularly from challenges in areas such as workforce and estates. 4.3 The EP21 set out an affordable plan for 2021-2031, providing detail of levers in place to protect against the risk of overspend and unaffordability. The 2020 Spending Review uplift, alongside savings measures, enabled the department to address a pre-existing deficit whilst also holding contingency to mitigate against unforeseen risks. 4.4 A major focus of the EP22 will be the affordability picture for 2022-32, how the department is ensuring a sustainable plan and the reliability of data and assumptions behind this. The department will describe the range of risk factors, whilst setting out how it plans to address these to maintain an affordable Plan. 4.5 However, the scope of the Plan and associated report will remain focused on equipment procurement and support, not on defence spending as a whole.