Inconsistent MoD Budget Forecasting
Inconsistent approaches to cost forecasting among MoD budget holders, leading to unreliable assessments of equipment programme affordability.
Strongest theme matches
Mixed across source types and ranked by classifier confidence plus text match strength.
Committee recommendation
100match
#10 - Inconsistent MoD planning approaches undermine transparency and parliamentary scrutiny of equipment affordability.
This flexibility means that users of the Plan, including Parliament, cannot compare Commands and other budget holders on a like-for-like basis.29 The MoD assured us that its ability to understand the Armed Forces’ capability and operational risks was unaffected by budget holders using different approaches to costing.30 However, as the Minister of State for Defence said in the...
Matched on
terms: budget, inconsistent, mod
Committee recommendation
100match
#9 - MoD budget holders use inconsistent approaches in forecasting equipment costs and capabilities.
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...
Matched on
terms: budget, forecasting, inconsistent, mod
Committee recommendation
100match
#2 - Ensure all MoD budget holders consistently adopt the same approach to forecast costs.
The Plan is inconsistent because some parts of the Armed Forces include the costs of all capabilities that the government expects them to deliver, while others only include those they can afford. 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...
Matched on
terms: budget, inconsistent, mod
Committee recommendation
87match
#4 - Forty-Eighth Report - MoD Equipment Plan 2022–2032
The Department’s assessment of the Equipment Plan’s affordability still relies on over-optimistic assumptions about the cost of programmes and the efficiencies and cost reductions it will achieve. Although the Department assesses that the Equipment Plan is affordable over ten years, this obscures significant financial pressure. There is a deficit of £2.6 billion over the first seven years of...
Matched on
terms: budget, mod
Committee recommendation
81match
#18 - Forty-Eighth Report - MoD Equipment Plan 2022–2032
The affordability of the Plan is also under pressure from external economic factors, including rising inflation and unfavourable exchange rate movements. In March 2022 the Office of Budget Responsibility forecast that inflation would reach 8.7% by the end of 2022.47 The Department reported that this would increase cost pressure on the Plan by £2.1 billion, but acknowledged that...
Matched on
terms: budget, mod
Committee recommendation
81match
#14 - Forty-Eighth Report - MoD Equipment Plan 2022–2032
The Department told us that its 2022–2032 Equipment Plan is affordable, as the equipment budget exceeds forecast costs by £2.6 billion (1% of budget). However, we noted that the aggregate surplus obscures financial pressures in the short-term and in some Top Level Budgets – those organisations, including front line commands, responsible for delivering defence outcomes within budgets delegated...
Matched on
terms: budget, mod
Committee recommendation
78match
#6 - Fiftieth Report - Defence Equipment Plan 2020–2030
The Department does not have all the necessary arrangements or qualified staff in place to provide assurance that its Equipment Plan is reliable and has been subject to rigorous quality assurance. The Department has made some improvements to its production and presentation of the Plan in recent years. But shortcomings remain, particularly around the reliability and consistency of...
Matched on
terms: budget, mod
Committee recommendation
77match
#5 - Fiftieth Report - Defence Equipment Plan 2020–2030
The Department has not established a reliable and sophisticated approach to estimating the cost of its future equipment programme, including setting realistic efficiency savings. The Department acknowledges the risk of costs escalating on its equipment projects, which are often large, complex projects involving the development of new technologies. The Department’s approach to cost forecasting is likely to understate...
Matched on
terms: forecasting, inconsistent
Committee recommendation
75match
#5 - Forty-Eighth Report - MoD Equipment Plan 2022–2032
The Department has ignored the worsening economic environment in its latest Equipment Plan and faces significant financial pressures on its equipment programme. The Department has not included external cost pressures, including inflation and foreign exchange movements, in its central assessment of the Plan’s affordability. This is despite identifying when it produced the Plan that inflation could increase project...
Matched on
terms: mod
Committee recommendation
74match
#31 - Defence Nuclear Enterprise costs show significant increases, exceeding previous forecasts and budget allocations.
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...
Matched on
terms: budget
Committee recommendation
74match
#26 - Department did not publish full 2023 Plan, revealing a £16.9 billion budget deficit.
In July 2023, the Department’s Permanent Secretary wrote to the Chair of the previous Public Accounts Committee to say that it would not provide a full Plan that year as it needed “to work through the direction from the 46 Q 5 47 Public Accounts Committee, Oral Evidence: Defence equipment plan 2023–33, Q 61, HC 451, 22 January...
Matched on
terms: budget
Committee recommendation
72match
#7 - Fiftieth Report - Defence Equipment Plan 2020–2030
In our report on the Equipment Plan 2019–2029, we expressed our concern that the Department had still not established an affordable long-term investment programme in military equipment and had missed opportunities to take the necessary difficult decisions to develop an affordable plan. We urged the government to set a balanced defence budget that reflects new priorities and ambitions...
Matched on
terms: budget, mod
Committee recommendation
69match
#20 - Forty-Eighth Report - MoD Equipment Plan 2022–2032
We are also concerned about the impact of inflation on the Plan’s delivery, particularly the Department’s ability to obtain the skills required. The Department told us that it and its suppliers do not have enough data scientists, software engineers or project managers. This puts at risk the delivery of a range of information, communication, and technology programmes.53 This...
Matched on
terms: mod
Committee recommendation
69match
#19 - Forty-Eighth Report - MoD Equipment Plan 2022–2032
Economic factors such as inflation and exchange rates will cause significant risks to the plan’s affordability. The Department told us that it has £25 billion of risks that are not included in its forecast costs because it deems these unlikely to occur, compared to £13 billion of more-likely risks that it does include in project cost forecasts.51 It...
Matched on
terms: mod
Committee recommendation
69match
#17 - Forty-Eighth Report - MoD Equipment Plan 2022–2032
We are concerned that the Department seems reliant on delaying delivery of capabilities to keep the Plan affordable.44 The Department told us that the £13.2 billion management adjustment for realism represented a small amount of over-programming, and was based on historical performance and its assessment of deliverability, with supply chain issues making it harder to spend money as...
Matched on
terms: mod
Committee recommendation
69match
#16 - Forty-Eighth Report - MoD Equipment Plan 2022–2032
The Department may be over-optimistic in its assessment of project costs. The Department’s Cost Assurance and Analysis Service estimates that project costs could be between £5.2 billion and £14 billion higher than those in the Plan. The Department told us that the latter figure was a worst-case scenario and that the different cost calculations are a matter of...
Matched on
terms: mod
Committee recommendation
68match
#19 - Second Report - The Integrated Review, Defence in a Competitive Age and the Defence and Security...
We welcome the uplift to the MOD’s budget in 2020 and the four-year budget commitment. However, inflationary pressures and an increase in the scale of threat means that it is no longer enough. At the same time, serious concerns persist around a number of procurement programmes. The Department now needs a strategy to regain both Parliament’s and the...
Matched on
terms: budget, mod
NAO recommendation
68match
The Equipment Plan 2023 to 2033
MoD should ensure greater consistency in the approach of each TLB to producing their equipment plans. It should provide clear guidance on whether each TLB should include the full predicted costs of the capabilities they are being asked to provide to fulfil defence commitments, regardless of the budget available. This would enable the MoD to use next year?s...
Matched on
terms: budget, mod
NAO recommendation
66match
The Equipment Plan 2020-2030
The Department needs to develop a comprehensive and realistic assessment of the affordability of its 10-year equipment and support programme. It should improve the consistency of judgements that underpin its budget and assessments of future costs. In doing so, it should: • explore a more complete range of outcomes in its affordability analysis by improving its understanding of...
Matched on
terms: budget
Committee recommendation
65match
#2 - 5th Report - MoD follow-up Spring 2026
It is completely unacceptable that the Department failed to maintain accounting records to support more than £6 billion of assets included in its 2024–25 Annual Report and Accounts. The Comptroller and Auditor General concluded that the Department’s 2024–25 accounts did not provide a true and fair representation of its financial position. This was because the Department had misclassified...
Matched on
terms: mod
Committee recommendation
65match
#21 - Forty-Eighth Report - MoD Equipment Plan 2022–2032
The Department acknowledged that inflation also makes it difficult for suppliers to deliver due to rising staff and material costs.55 As a result, the Department is changing its contractual approach to take account of the inflation risk and avoid suppliers charging a higher premium for continuing to take this risk on.56 47 Q 95 48 C&AG’s Report, para...
Matched on
terms: mod
Committee recommendation
65match
#15 - Forty-Eighth Report - MoD Equipment Plan 2022–2032
We also noted that the Plan is only affordable if the Department achieves intended £13.8 billion of savings, £5 billion of which it has not yet developed plans to achieve.39 The Department may be over-optimistic in expecting to achieve all intended cost reductions and efficiency savings.40 In addition, of the savings for which it does not yet have...
Matched on
terms: mod
Committee recommendation
65match
#9 - Fiftieth Report - Defence Equipment Plan 2020–2030
The Permanent Secretary also explained that the Department has had to live with an annual budget cycle and plan its equipment programme without the certainty of funding over a 10-year period. He explained that this was very difficult to manage. The 2020 Spending Review has provided the Department with the certainty of funding for the 7 Qq 24,...
Matched on
terms: budget
Committee recommendation
64match
#3 - Fiftieth Report - Defence Equipment Plan 2020–2030
The Department’s failure to break the cycle of short-term financial management is preventing it from developing essential military capabilities in ways that achieve value for money and is restricting its ability to respond to new opportunities or threats. The Department’s continued focus on meeting the Treasury’s requirement for it to balance its budget every financial year comes at...
Matched on
terms: budget
Committee recommendation
64match
#13 - Third Report - “We’re going to need a bigger Navy”
We are very concerned that the limited resource budget allocated under the Spending Review for the remainder of this Parliament will be insufficient to properly operate and maintain the full fleet. We were not convinced by the Department’s assertion that “the resource budget is adequate to ensure that we maintain the crewing and effectiveness of those additional resources”....
Matched on
terms: budget, mod
NAO recommendation
64match
The Equipment Plan 2021 to 2031
The Department has not yet fixed its long-standing problems in managing the Plan. It will struggle to do so unless its Head Office, working with the TLBs, makes a fundamental change to the way it builds, and reports on, the Plan. In particular, the Department should: a) ensure all components of the Plan’s budgets and costs are prepared...
Matched on
terms: budget
Committee recommendation
62match
#1 - 5th Report - MoD follow-up Spring 2026
On the basis of the Comptroller and Auditor General’s audit of the Ministry of Defence’s (the Department) Annual Report and Accounts 2024–25, we took evidence from the Department to examine why he had qualified those accounts.1
Matched on
terms: mod
Committee recommendation
62match
#23 - Defence readiness suffers from in-year budget pressures, exacerbated by defence inflation.
The evidence is that readiness is suffering because of in-year pressures on budgets at a crucial time of preparation to meet potential conflict. It is vital that the additional funds allocated to defence by the Government do not get swallowed by defence inflation. Both we and the Government recognise the importance of public support (and sacrifice) for the...
Matched on
terms: budget
Committee recommendation
60match
#12 - Twenty-Third Report - Delivering carrier strike
The Department assured us that it did not have major concerns over its budget for sustaining a carrier strike group and that it could place the support contracts it needs.31 However, it admitted that it does not yet fully understand the maintenance requirements and told us that the budget for spare parts is tight.32 The Department acknowledged that...
Matched on
terms: budget
Committee recommendation
60match
#10 - Twenty-Third Report - Delivering carrier strike
In 2018, this Committee recommended that the Department develop more detailed estimates of the costs of supporting and operating Carrier Strike.24 This is even more important now given the pressure on the defence budget, as illustrated by funding shortfalls of up to £13 billion on the Department’s Equipment Plan.25 The Department expressed its hope that the Review will...
Matched on
terms: budget
Committee recommendation
60match
#3 - Fifty-Second Report - Ministry of Defence Equipment Plan 2021–31
The Plan’s affordability relies on the Department achieving a number of different types of savings, including £7 billion of ‘cost reductions’ by 2031. The Top Level Budgets (TLBs) do not yet have plans to achieve £4 billion of the ‘cost reductions’, which is almost as much as the savings expected from capabilities cut as a result of the...
Matched on
terms: budget
Committee recommendation
57match
#13 - 5th Report - MoD follow-up Spring 2026
The Department told us that the whole point of the Defence Investment Plan (DIP) was to provide genuinely long-term demand signals so that industry, both large and small companies, can invest in preparation. It said that this was vital to foster a better investment climate, attract companies into the UK, boost exports, and, above all, partner with them...
Matched on
terms: mod
Committee recommendation
57match
#15 - Department manages HS2 via annual funding despite need for long-term profile.
The Department emphasised the need for a long–term spending profile for the completion of HS2, acknowledging to us that agreeing annual budget settlements was really poor for long–term infrastructure delivery.26 20 C&AG’s Report, para 4.6 and 4.7; Department for Transport, HS2 6 monthly report to Parliament: October 2020, 13 October 2020 21 Q 7; Department for Transport, HS2...
Matched on
terms: budget
Committee recommendation
57match
#15 - BBC faces sustained financial pressures from real-terms licence fee reductions, requiring significant PSB savings.
The BBC faced sustained financial pressures due to real-terms reductions in licence fee income, which rose only modestly to £3.8 billion in 2024–25, compared to £3.7 billion in 2023–24. The rise was due to an increase in the cost of a licence following two years of frozen pricing, despite rising costs and inflationary pressures. As part of wider...
Matched on
terms: mod
Committee recommendation
56match
#8 - Fiftieth Report - Defence Equipment Plan 2020–2030
When asked if the financial problems with the Defence budget were ever likely to change, the Permanent Secretary pointed first to the Department not having a very good understanding of the drivers of inflation with defence projects. Second, and in his view probably most importantly, he highlighted the inherent difficulties of long-term and technical projects, where threats change,...
Matched on
terms: budget
Committee recommendation
56match
#3 - Twenty-Third Report - Delivering carrier strike
The Department still does not fully understand Carrier Strike’s support and operating requirements or costs. In 2018, we highlighted that the Department must develop detailed estimates of the costs of supporting and operating Carrier Strike. This is even more important now as the defence budget is likely to come under increasing strain in future years. The Department based...
Matched on
terms: budget
Committee recommendation
56match
#24 - Fiftieth Report - Defence Equipment Plan 2020–2030
We remain extremely concerned that the Department continues to manage a long- term spending programme on a year-by-year, cash-limited budget.69 Faced with funding shortfalls, the Department took a range of measures to balance its 2020–21 budget, including introducing commitment levels on commands’ budgets, restricting the introduction of new projects and closely monitoring in-year expenditure.70 Furthermore, the Department once...
Matched on
terms: budget
Committee recommendation
53match
#17 - 5th Report - MoD follow-up Spring 2026
The Department said that it was still awarding contracts, guided by the SDR, despite the delayed publication of the DIP. However, it acknowledged that the delay was having an adverse impact on industry. The Department acknowledged that serial delays were undermining its credibility with the defence sector. In particular, SMEs were suffering more than larger companies.33 Ajax armoured...
Matched on
terms: mod
NAO recommendation
52match
The Equipment Plan 2019 to 2029
The Department should draw on its detailed assessment of options for Spending Round 2019 to maintain a prioritised cross-Department view on future military capabilities. It should estimate potential development costs of new projects to better inform decisions to delay, defer or de-scope existing projects. It should also ensure TLBs carry out holistic assessments of their priorities for equipment,...
Matched on
classifier match
Committee recommendation
52match
#25 - Fiftieth Report - Defence Equipment Plan 2020–2030
The National Audit Office has also reported that the Department’s continued focus on living within its in-year budget is affecting its ability to develop the military capabilities that are needed.72 The commands undertook yet another re-prioritisation exercise to balance the annual budget for 2020–21, either descoping equipment projects or delaying expenditure. This focus on living within its annual...
Matched on
terms: budget
Committee recommendation
52match
#22 - Fiftieth Report - Defence Equipment Plan 2020–2030
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...
Matched on
terms: budget
NAO recommendation
48match
Defence capabilities – delivering what was promised
The Department should instil a culture where exceptions are seen as just that – exceptional. The Department should require the communication of any exceptions on the most significant capabilities to the central approving authority prior to declaration of the milestone being achieved, together with an explanation of the implications for the future delivery timetable and budget for the...
Matched on
terms: budget
NAO recommendation
48match
Defence inventory management
To address its long-standing challenges in inventory management and successfully deliver its transformation initiatives, we recommend that the MoD: develops an assessment of the skills and resources its needs across inventory management, whether current resourcing levels are sufficient to meet these, and what resourcing risks it is carrying in its current and future operations.
Matched on
terms: mod
NAO recommendation
47match
HS2: update following cancellation of Phase 2
HM Treasury should: consider how to apply the recommendations we made in our 2023 report on how best to manage the budget for the HS2 programme to best protect value for money. These recommendations included consideration of: resetting HS2 budgets and costs in current prices; how inflation risk would be managed in the future; and revisiting financial controls...
Matched on
terms: budget
Committee recommendation
45match
#6 - Fifteenth Report - Improving the prison estate
The Ministry is still reeling from the long-term consequences of its unrealistic 2015 Spending Review settlement, and bears the financial and human cost of sustained underinvestment. The Ministry admits that its 2015 Spending Review settlement was over-optimistic and fundamentally unbalanced. It over-estimated how much income it would receive and overestimated the level of savings it could make in...
Matched on
classifier match
Committee recommendation
45match
#26 - Publish Defence Finance and Investment Strategy, detailing funding solutions and implementation plan, including new mechanisms.
We recommend that the Government uses the Defence Finance and Investment Strategy to set out the data it holds and the conclusions it has drawn alongside its approach to resolving the issues with each type of funding difficulty. In the strategy the Government will need to set out how much state intervention it is willing to commit to...
Matched on
classifier match
Committee recommendation
45match
#5 - UK lacks readiness for contemporary war and urgent adoption of new technology
We are producing this Report prior to the publication of the Defence Investment Plan and as a result without the full picture of the future force posture. We timed this inquiry on the understanding that by now there would be an indication of broad prioritisation, if not specific investment decisions—because these hard choices were not in the published...
Matched on
classifier match
IMB annual report
43match
Littlehey (2025)
HMP Littlehey continues to provide a safe and largely humane environment, with commendations for its compassionate healthcare, dedicated staff, and innovative rehabilitation initiatives like the CRED team. However, the report highlights significant concerns including critical understaffing of the IMB, persistent issues with heating and hot water, a substantial cut to the education budget, and inadequate after-hours social care....
Matched on
terms: budget
Committee recommendation
40match
#1 - Second Report - The Integrated Review, Defence in a Competitive Age and the Defence and Security...
It is difficult not to feel a sense of déjà vu as we see British military ambitions which are not entirely matched by resources. Open conflict has returned to Europe and it is disappointing to see that the Government is not preparing for the impact of inflation and insufficient industrial capacity on the production of defence equipment as...
Matched on
classifier match
Committee recommendation
40match
#11 - Twenty-Third Report - Delivering carrier strike
Support costs include the cost of maintaining, repairing and upgrading equipment. Operating costs include items like fuel, port fees and stock.27 The Department is developing its understanding of the requirements of a carrier strike group when on deployment, and believes that its cost estimates are beginning to mature.28 It has used the sea trials to improve its understanding...
Matched on
classifier match