Select committee: Public Accounts Committee
Conclusion 12
Fiftieth Report - Defence Equipment Plan 2020–2030
Published 16 Mar 2021
Addressed to HM Treasury
Public Accounts Committee Defence Equipment Plan 2020-2030 All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
The Department’s adjustments to its cost estimates are still over-optimistic, including its assessment of the level of potential efficiency savings.26 We have previously raised our concerns that the Department was including efficiency savings that it was not confident of 17 Qq 10,11 18 Q 12 19 Q 26 20 Q 41; C&AG’s report, para 1.14 21 C&AG’s report, para 14 22 C&AG’s report, para 14, 1.16 23 C&AG’s report, Figure 7 24 Qq 26, 42 25 Q 27; C&AG’s Report, Carrier Strike – Preparing for deployment, Session 2019–21, HC 374, 26 June 2020 para 1.17 26 C&AG’s report, para 14 Defence Equipment Plan 2020–2030 11 achieving.27 This year, we again sought assurances that its forecast savings were achievable. The Department told us that it had modelled the maturity level of its forecast savings and had high confidence in its ability to achieve £8.2 billion of efficiencies included in the Equipment Plan, 66% of its £12.3 billion savings target for projects in the 2020–2030 Plan.28 However, despite our previous recommendations, the Department has again included £2.7 billion of efficiency savings for which it has not yet implemented delivery plans and £1.1 billion of savings with no delivery plans. It also needs to find another £0.4 billion of savings to achieve its savings target. If the Department fails to deliver these less mature efficiencies and find new efficiencies, then the Plan would be even less affordable.29
From: Public Accounts Committee, Fiftieth Report - Defence Equipment Plan 2020–2030 (HC 693), 16 March 2021
Government response
The government responded to the whole report on 31 August 2021 (deadline 16 May 2021).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government states that it agrees with the Committee's recommendations that are set out in the response, each with a stated target implementation date, and sets out related work already under way.
- On affordability, it agrees that the next Equipment Plan report must demonstrate affordability, and says that report (Autumn 2021) will set out the implications of the 2020 Spending Review settlement and the Integrated Review.
- On transparency over the additional funding, it agrees and says it "will write to the Committee before summer recess" with a summary of investment and savings decisions, with a target date of June 2021.
- On defence cost inflation, it agrees and says it will write to the Committee alongside the Autumn 2021 Equipment Plan report, and states it "is committed to changing attitudes and behaviours within the Defence acquisition system".
- On finance capability, it agrees with a target date of March 2023, noting that "It takes time to both train and recruit professionally qualified staff, but numbers will increase over time."