COMMONS

MoD has little flexibility to deal with changing military priorities

25 April 2017

The Public Accounts Committee report on the Ministry of Defence's £178 billion defence equipment and support plan.

We are very concerned that the Ministry of Defence’s Equipment Plan is at greater risk of becoming unaffordable than at any time since its inception in 2012. Maintaining affordability is now heavily reliant on a highly ambitious, but still under-developed, programme of efficiency savings from within the Plan and the wider Defence budget.

The Plan continues to be vulnerable to cost growth because of uncertainties around the costs of new projects, continued problems with cost control on some long-standing projects, and the significant fall in the value of the pound against the US dollar. The Department has used more than £10 billion previously set aside to meet new requirements to help fund its existing core programme, leaving it little flexibility to deal with changing military priorities.

Over the past five years the Department has transformed its financial management of large projects. We are worried that the increase in commitments without a commensurate increase in funding puts this stability and the ability of the Department to deliver what our forces need to operate effectively at real risk.

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