Recommendation 5

The Department has taken a narrow and short-term approach to management and costs and has failed to realistically appraise the programme’s whole-life cost. The Department acknowledges that it reduced the pace of aircraft deliveries to make short-term financial savings at multiple points in the programme, notably in 2010. In 2021 the Department decided to pause building a sovereign facility for assuring that aircraft retained their stealth capabilities, which is required for its freedom of action policy. The Department similarly delayed providing 809 Naval Air Squadron’s infrastructure by 6 years, increasing costs by almost £100 million. It did so despite knowing it would cost more money in the long-term and create a gap in capability. The Department also failed for many years to significantly update its public whole-life cost, which hardly increased from its 2013 estimate of £18.425 billion covering the first 48 aircraft to the then out of service date of 2048. In response to the 2025 National Audit Office report the MoD published a whole-life cost of almost £57 billion for all 138 aircraft to the new out of service date of 2069. But this still does not include non-equipment costs such as personnel, fuel and infrastructure which are included in the NAO estimate of £71 billion. recommendation The Department should: a. set out in its upcoming Defence Investment Plan the expected long-term impact on costs and capability of any short-term savings measures, on both the F-35 and other major programmes, and b. build on its recent whole-life cost analysis by including all relevant non-equipment costs to give a more complete through-life cost forecast of the programme. 4