Select committee: Public Accounts Committee
Conclusion 9
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)
The MoD’s aim is that the Plan provides a reliable assessment of the affordability of its equipment programme and demonstrates to Parliament how it will manage its funding to deliver equipment projects.26 The MoD’s headquarters provides the Front Line Commands and other budget holders with guidance on preparing their cost forecasts. However, it allows the budget holders to take different approaches to whether they include in their forecast costs all the capabilities they need to meet government’s expectations, or just those capabilities that they can afford.27 For example, the Royal Navy has included in the Plan predicted costs for all the capabilities the MoD expects it to deliver, and it has reported a 10-year budget deficit of £15.3 billion. In contrast, the Army has reported a deficit of £1.2 billion because it only includes those projects it can afford: its deficit would increase by around £12 billion if it included all the capabilities it needs.28
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".