Source · Select Committees · Public Accounts Committee
Recommendation 22
22
We are concerned that the Department has no flexibility in its 2020–2030 Equipment Plan budget,...
Conclusion
We are concerned that the Department has no flexibility in its 2020–2030 Equipment Plan budget, which limits its ability to respond quickly to new or emerging threats.63 The National Audit Office report showed that the Department has only made provision for projects that it has already begun and has not allocated any funding to develop new high- priority capabilities or replace existing capabilities.64 The Department allocated all of its 2020–21 contingency in response to the financial pressures that it faces but accepted that its approach was not best practice. It told us that it needed to build some margin back into the programme to avoid repetition of the short-term money saving measures that do not achieve value for money.65
Government Response
Acknowledged
HM Government
Acknowledged
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.