Public Accounts Committee
Ministry Of Defence: Equipment Plan 2012-2022 And Major Projects Report 2012
HC 53, First Report of Session 2013-14 - Report, Together with Formal Minutes and Oral Evidence
- House of Commons - Committee of Public Accounts
- TSO (The Stationery Office)
The Ministry of Defence (MoD) has now reported on the affordability of its ten-year forward plan to purchase and support military equipment (the Equipment Plan), and its progress on delivering its largest projects in 2012; 'Ministry Of Defence: Equipment Plan 2012-2022 And Major Projects Report 2012 (HC 53)' finds that the MoD has made a good start, but there are concerns about over-optimistic assumptions, the completeness and robustness of support cost estimates, and risks to capability.
The affordability of the Equipment Plan is based on an agreement with HM Treasury that the MoD will receive a 1% annual increase in its equipment budget over the period from 2015-16 to 2020-21. If this is not achieved in the current fiscal circumstances then the current plan may well be unaffordable. The addition of a contingency provision of £4.8 billion is a positive step, but this may not be sufficient to absorb cost growth.
The Equipment Plan lacks a robust understanding of the support costs and the associated risks, including the size of the budget that may be required to recover equipment from Afghanistan. The MoD also faces the challenge of delivering projects to agreed timescales, and may ultimately bear the risk of any delays in terms of its military capability.
Greater transparency is needed on these risks and how they are mitigated; this includes being clear on the impact on capability, for example - if the £8 billion that is currently unallocated in the budget cannot be used for purchasing new equipment, because it is needed to absorb cost growth.
|Format||Paperback||Published||14 May 2013|
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