Source · Select Committees · Public Accounts Committee
Recommendation 24
24
The Department secured an additional £16.5 billion in funding over the next four years in...
Conclusion
The Department secured an additional £16.5 billion in funding over the next four years in the 2020 Spending Review. Given the Department’s track record of short-term financial management, and schedule delays and cost growth across its programmes, we asked the Department whether it is certain that the additional money will not just be used to plug existing financial holes and fund existing projects.59 It has already acknowledged in previous evidence sessions that part of the additional money will be used to plug its estimated £7 billion Equipment Plan shortfall.60 The Department could not provide a clear account of the extent to which the money will secure genuinely new equipment and capabilities. It had previously written to us to say that the money would be used to fund both new and existing capabilities. However, in our oral evidence session, the Department could not clearly explain the basis of its longer-term projections or point to what has and what has not been approved.61 The Department’s letter to us also set out other spending commitments using the new money, such as spending £6.6 billion on R&D, and additional funding for pension changes and enhancing childcare for service personnel.62 55 Q 86 56 C&AG’s report, para 4.11 57 Q 86 58 Q107 59 Q 96 60 Committee of Public Accounts, Oral Evidence: Defence Equipment Plan 2020–2030, HC 693, 4 February 2021, Q 24 61 Qq 94–99 62 Correspondence from David Williams, CB to Dame Meg Hillier, MP, Follow up to 4 February PAC oral evidence session: Defence Equipment Plan 2020–2030, 22 June 2021. 18 Improving the performance of major defence equipment contracts
Government Response
Not Addressed
HM Government
Not Addressed
6.2 Although the department agrees with the Committee’s recommendation, it does not agree with the Committee’s conclusion. The £16.5 billion extra funding from Spending Review 2020 will support the aims and priorities outlined in the Integrated Review to better counter developing and future threats. Further detail and a breakdown of the £16.5 billion will be provided in the upcoming equipment plan report for publication in February 2022, with a clear distinction between investment in new capabilities and managing the existing shortfall reported in our previous updates. As usual, this will be published alongside the NAO report. 6.3 Recognising the time taken to compile this significant edition of the Equipment Plan, the department has provided updates to the Committee following the publication of the Defence Command Paper in March 2021. The department wrote to the Committee on 22 June with detail of the investments and savings taken through the Integrated Review. The department wrote again to the Committee on 14 September 2021 in response to the Committee’s report on equipment contracts and set out more detail on the new capabilities which will cover.