Source · Select Committees · Public Accounts Committee
Recommendation 31
31
Rejected
Defence Nuclear Enterprise costs show significant increases, exceeding previous forecasts and budget allocations.
Conclusion
However, costs of the DNE are rising, driven by various factors.69 The Department is seeking to quicken the pace of delivering its nuclear programmes. The Department noted, however, that there is a very strong correlation between speeding up the schedule and costs, because many of the costs are workforce related. Inflation continues to flow through into costs. The Department has also added new programmes to the DNE, such as to re-establish the capability to produce nuclear reactor fuel for defence 62 Q 60 63 Letter from the Permanent Secretary of the Ministry of Defence relating to the future of the Defence Equipment Plan, 13 May 2025 64 Q 41 65 The overall defence budget also increased between 2023–24 and 2024–25 meaning that the nuclear budget as a percentage was around 18% of the total budget. 66 Q 12 67 Q 15 68 Qq 19 and 20 69 Q 13 17 purposes.70 In consequence, forecast costs for the DNE for the ten years from 2023 and 2033 have increased by around £10 billion to approximately £128 billion from the £117.8 billion reported in the NAO’s 2023 Equipment Plan report.71 However, that 2023 Plan itself had reported that the DNE’s costs were already £7.9 billion more than its budget of £109.8 billion.72
Government Response Summary
The government rejects the implicit recommendation for separate reporting, stating that DNE financial information is already provided through broader MOD financial reporting, Annual Report and Accounts, and the Defence Investment Plan.
Government Response
Rejected
HM Government
Rejected
6.1 The government disagrees with the Committee’s recommendation. 6.2 The annual update to Parliament has never been a vehicle for detailed financial reporting on the Defence Nuclear Enterprise (DNE). The government believes it is better to provide DNE financial information as part of wider MOD financial reporting to avoid any risk of inconsistency or misaligned timing of data. Financial information on the DNE is provided, along with financial information relating to wider defence budgeting and spending, in the department’s Annual Report and Accounts and as part of the Parliamentary Estimates process. It is also expected that financial information will be included in the Defence Investment Plan. 6.3 The government is continuing to consider the recommendations made previously by the Public Accounts Committee for a new committee to be set up to scrutinise DNE expenditure.