Defence Committee

Session 2007-08, 28 January

Publication of Report: conclusions

MoD performance against key targets grows worse says Defence Committee

The House of Commons Defence Committee today reveals that the continuing high level of deployment of UK Armed Forces is leading to worsening performance by the MoD against its key Public Service Agreement targets. "We are deeply concerned that the Armed Forces have been operating at or above the level of concurrent operations they are resourced and structured to deliver for seven of the last eight years, and for every year since 2002" says the Committee in its report published today (Fifth Report of Session 2007-08, Ministry of Defence Annual Report and Accounts 2006-07, HC 61).

The MoD's assessment of its expected achievements against its six Public Service Agreement (PSA) targets, which run until the end of March 2008, has deteriorated. At the end of 2007 the MoD did not expect to meet the target for generating forces and expected "only partly" to meet targets relating to defence equipment procurement, and recruitment and retention. For the latter target, manning balance in the Royal Navy and the Army is not expected to be achieved by April 2008 and the Committee says it is very disappointed with the failure to meet harmony guidelines in the Army and the RAF. The Committee considers this to be another clear indicator of the pressure on UK Armed Forces. The Committee calls upon the MoD to set out what impact this is having, particularly on the retention of Service personnel.

The MoD continues to experience substantial forecast cost increases on equipment programmes, with the Astute submarine and Type 45 destroyer programmes experiencing forecast cost increases totalling some £500 million since the Major Projects Report 2006. The Nimrod MRA4 aircraft programme is experiencing further cost growth and the Committee says that this needs to be addressed as a matter of urgency given the pressures on the future defence budget. There is likely to be further delay on the A400M transport aircraft programme. The Committee is particularly concerned about further delay on this programme as new transport aircraft are desperately needed by UK Armed Forces who are already having to use ageing transport aircraft.

The Comprehensive Spending Review (CSR) 2007 settlement for defence announced in July 2007 provides "an additional £7.7 billion for defence by 2011, and a 1.5 per cent average annual real terms increase". The Committee welcomes the increases but cuts in the defence programme, including the equipment programme, are likely in the coming months as part of the Planning Round process. The Committee calls on the MoD to be realistic about the number of equipment programmes that can be funded. As part of the settlement the MoD has to deliver substantial savings and has announced plans to streamline its Head Office with the loss of some 1,000 civilian jobs. The Committee calls on the MoD to manage the streamlining process carefully and to monitor staff morale closely.

Commenting on the report, Committee Chairman Rt Hon James Arbuthnot MP said:

"The pressure on UK Armed Forces from the continuing high levels of deployment is being seen in the MoD's worsening performance against it PSA targets. Most worrying is the impact on the PSA target covering recruitment and retention. Manning balance in the Royal Navy and the Army is not expected to be achieved by April 2008, and the Army and the RAF are failing to meet harmony guidelines. The continuing pressure on our Armed Forces personnel is likely to have an impact on retention and there are some disturbing signs of an increase in early departure in the Army."

"The increase in defence spending set out in the 2007 Comprehensive Spending Review is to be welcomed, but the defence budget in the period covered by the 2007 Spending Review will be under substantial pressure given that several funding commitments, such as the Future Carrier programme and further investment in accommodation, have been announced. The MoD needs to limit further cost growth on existing equipment programmes and to be realistic about the number of equipment programmes that can be funded. The MoD will need to take some difficult decisions in the coming months as part of the Planning Round process and the Defence Committee plans to monitor this closely."

NOTE FOR EDITORS:

The Committee was nominated on 13 July 2005. The Defence Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Ministry of Defence and its associated public bodies.

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