Select committee: Public Accounts Committee
Conclusion 4
Nineteenth Report - MoD Equipment Plan 2023–2033
Published 8 Mar 2024
Addressed to HM Treasury
Public Accounts Committee The Equipment Plan 2023–2033 All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
Uncertainty about the MoD’s future demand for equipment hinders its work with industry to develop a resilient, responsive, and cost-effective supply chain. Key lessons from the war in Ukraine include the need for the Armed Forces to invest in weapon stockpiles and ensure resilience and agility in sustaining military capabilities. The MoD has earmarked £5 billion during the decade to 2032–33 to do this, half of which is additional funding provided by the HM Treasury across 2023–24 and 2024–25. The MoD recognises that building capacity, including the industrial skills base, will take time, and that in order to invest industry must have the confidence that the level of demand will continue. The MoD has launched some initiatives to provide assurance regarding future demand, including an order with BAE Systems for 155mm artillery shells. It is also engaging with industry to discuss technical developments which are occurring at fast pace because of the war in Ukraine. However, the failure to provide budgets that match ambition, such as the £5.9 billion funding shortfall in the shipbuilding pipeline, risks undermining suppliers’ confidence to invest in their capacity. Recommendation 4: In order to build industry’s confidence to invest in supply chain capacity, the MoD should develop and communicate clear and funded schedules of work for the procurement and support of its military equipment. MoD Equipment Plan 2023–2033 7
From: Public Accounts Committee, Nineteenth Report - MoD Equipment Plan 2023–2033 (HC 451), 8 March 2024
Government response
The government responded to the whole report on 28 May 2024.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government agrees with the Committee's recommendations on consistent forecast costing, clearer signals to industry, assessing the new procurement model and reliance on allies, but disagrees with those on setting out cuts under a 2.5% shortfall and on reporting nuclear funding trends.
- On the 2.5% of GDP aspiration, the government disagrees with the recommendation; the department "does not intend to set out a list of capabilities that would be cut" because this would risk operational security and industry confidence.
- On nuclear costs, the government disagrees with the recommendation. If conventional budgets are affected by nuclear funding needs the department "will make that clear", but it considers going further "wholly speculative".
- The government agrees that all budget holders should treat forecast costs consistently, with a target implementation date of Spring 2025. The department "will seek to standardise" the data and its presentation.
- The government agrees to assess the impact of the Integrated Procurement Model, with a target date of December 2024. It will "monitor the increase in pace of delivery and provide updates as appropriate".