Session 2008-09, 9 March 2009
Publication of Spring Supplementary Estimate Report
UK DRAWDOWN IN IRAQ IMPOSES A SIGNIFICANT
INCREASE ON OPERATIONAL COSTS
The Ministry of Defence (MoD) today seeks from the House of Commons an extra £1.297 billion, £802 million of which is to cover the costs of current operations in Iraq and Afghanistan. This sum is in addition to extra funds sought and received at the time of the Winter Supplementary Estimates in December, which means that the MoD will have sought by the end of the Financial Year an additional £4.517 billion to fund operations in both those theatres.
- Just over £1 billion will be spent on Urgent Operational Requirements (UORs) in 2008-09 to meet the needs of the rapidly changing tactical situation in theatre.
- A sum of £455 million has been allocated to fund the possible costs of drawdown in Iraq: this will cover the potential non-cash costs of depreciation, write-offs and gifting of equipment and other capital assets. This sum represents over half of the additional operational costs in this Estimate.
- Other operational cost increases are due to higher than expected fuel and munitions use and the expense of construction and equipment support at Camp Bastion and Gereshk.
- In the non-operational area there have been significant increases in costs associated with resource pressures on Defence Equipment and Support (DE&S), impairments reflecting the downturn in market prices for fixed assets in Defence Estates and compensation for the loss of non-operating profits, which are lower than expected.
The Report - published on the day that the House of Commons will be asked to agree the Government's Spring Supplementary Estimates - recommends that the House approve the MoD’s request for additional resources, given the clear requirement for increased capability and force protection for the UK’s Armed Forces in theatre.
Commenting on the Report, Committee Chairman the Rt Hon James Arbuthnot MP said: “The amount of money requested in this Estimate is considerable, but the quality of information that we are now receiving from the MoD about these costs is greater than it was in the past and makes us more certain that we know exactly where it is going - on munitions, force protection, new equipment and capabilities. The £455 million allocated to cover possible drawdown costs in Iraq in 2008-09 is significant: we are asking the MoD to tell us what additional costs of drawdown will fall in 2009-10. Clearly, at the beginning of the next Financial Year the taxpayer will have a better idea than ever before of what those monies requested during 2009-10 will be expected to cover. Our troops need the money the MoD seeks and we recommend that the House approve the granting of these important extra resources.”
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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