Source · Select Committees · Public Accounts Committee
Recommendation 17
17
In November 2020, the government announced that it would provide an additional £16.5 billion of...
Conclusion
In November 2020, the government announced that it would provide an additional £16.5 billion of funding over the next four years, which represents a 10% increase in the defence budget over this period.45 The Department said that HM Treasury has given it a planning assumption that its budget will grow in real terms by 0.5% per year for the subsequent six years and, as a consequence, it estimated that the Spending Review settlement would result in over £30 billion of additional funding over the next 10 years.46 The government intends that this funding will allow the Department to modernise and invest in new technologies, including its cyber and space capabilities. The Integrated Review of Security, Defence, Development and Foreign Policy (the Integrated Review) will set out the strategic decisions on future capabilities that are needed to support the defence and security policy.47
Government Response
Acknowledged
HM Government
Acknowledged
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 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.