Recommendation 8

When asked if the financial problems with the Defence budget were ever likely to change, the Permanent Secretary pointed first to the Department not having a very good understanding of the drivers of inflation with defence projects. Second, and in his view probably most importantly, he highlighted the inherent difficulties of long-term and technical projects, where threats change, and where new capabilities come along that render as potentially obsolete equipment yet to be procured. He commented that “there is always going to be…a degree of flux, which is difficult to predict, in a defence procurement programme of this scale and tenor.”15 He also considered that, while the recently announced additional funding put the Department in a “much, much, much better position” to get the whole programme into balance, there would still be “tensions and flux” with which his successor would continue to struggle.16