Source · Select Committees · Public Accounts Committee
Recommendation 18
18
We have repeatedly urged the Department to take the difficult investment decisions needed to develop...
Conclusion
We have repeatedly urged the Department to take the difficult investment decisions needed to develop a balanced investment programme, highlighting missed opportunities to address fundamental weaknesses in its management of the Equipment Plan.48 The Department acknowledged that the lack of certainty over long-term funding had prevented it from taking strategic decisions to address the structural imbalance in the Plan. The Spending Review settlement, announced in November 2020, now gives the Department more certainty of funding over a longer planning horizon and, for the first time in many years, provides it with the opportunity to take strategic decisions around future capabilities. The Department told us that it considered this was a turning point for Defence.49 Drawing on the lessons from the strategic reviews in 2010 and 2015, it intends to develop a coherent and balanced 10-year programme of equipment expenditure.50
Government Response
Acknowledged
HM Government
Acknowledged
3.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2021 3.2 Alongside the Equipment Plan 2021, the department will write to the Committee, outlining the key principles that will guide future investment decisions and steps the department is taking to ensure that the equipment plan remains affordable and delivers value for money. 3.3 Since the Committee's report, the department published the Defence Command Paper which sets out new policy aims and the capability decisions that were underpinned by the additional £16.5 billion investment from the 2020 Spending Review. The department has taken a balanced approach, with an appropriate level of risk and contingency, investing in the current programme and new capabilities such as space, research and development (R&D) and the Future Combat Air System (FCAS). In doing so, the department has demonstrated that it has the mechanisms in place to deliver a coherent programme and to fund modernisation will disinvest in capabilities such as in the case of Warrior Capability Sustainability Programme (CSP). 3.4 Alongside this firmer financial footing, the department is already strengthening the approach to managing the defence portfolio whilst ensuring agility to respond to future threats and opportunities. The department’s approach will build on the current acquisition and approval transformation programme (AATP) and new policy framework outlined in the Defence and Security Industrial Strategy published in March 2021 to ensure future investment decisions deliver long-term value for money. The department will provide further details alongside the Equipment Plan 2021.