Source · Select Committees · Public Accounts Committee
Recommendation 7
7
In our report on the Equipment Plan 2019–2029, we expressed our concern that the Department...
Conclusion
In our report on the Equipment Plan 2019–2029, we expressed our concern that the Department had still not established an affordable long-term investment programme in military equipment and had missed opportunities to take the necessary difficult decisions to develop an affordable plan. We urged the government to set a balanced defence budget that reflects new priorities and ambitions in developing capabilities to meet the evolving threats of modern warfare.11 Yet we continue to see the damaging consequences of failing to address the unaffordability of the Plan.12 The Top Level Budgets (TLBs) were again required to make savings on equipment projects—as they cut over £1 billion from their budgets in 2020–21—and were again restricted from entering into new contracts.13 We remain extremely frustrated that the Department has persisted with these practices while still not addressing the fundamental issue of the long-term affordability of its equipment programme.14
Government Response
Acknowledged
HM Government
Acknowledged
1.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2021 1.2 On 19 November 2020, the Prime Minister announced an increase in defence spending which will mean £188 billion will be spent on defence over the following four years – an increase of £24 billion or 14%. This settlement was confirmed in the 2020 Spending Review and will allow the department to deliver the ambition of the Integrated Review and Defence Command Paper published in March 2021 (above). 1.3 This additional funding will allow the Ministry of Defence (the MOD or the department) to reset the balance between ambition and resources, but an affordable plan is not the result of additional funding alone. The department is taking difficult decisions to retire older capabilities and to bear down on operating costs 2 8 to create the headroom needed for modernisation and investment. In addition, the department is continuing to improve its financial management. 1.4 In the next Equipment Plan report (publication Autumn 2021), the implications of the 2020 Spending Review settlement and the Integrated Review will be set out and the department will demonstrate how this has improved the affordability of the Equipment Plan.