The British Ministry of Defence (MOD)

MOD Responds to NAO Report on Defence Spending

National Audit Office Slams MOD Equipment Plan as Unaffordable

The MOD has made an official response following the National Audit Office’s report on the MOD’s Equipment Plan, criticising it as “unaffordable”. The news comes after it was recently announced that UK defence spending would get an additional £1 billion boost.

The MOD introduced its Equipment Plan 2018 to 2028 in 2012 after what was called “a period of poor financial management” that “reduced funding for front-line military activities”.

The Equipment Plan covers current hardware, such as the RAF’s Typhoon fighters, as well as projects in development, such as the Royal Navy’s new Dreadnought submarine programme. Over the next ten years, the MOD has committed almost half of its budget to equipment.

The National Audit Office (NAO) said that the MOD plan would cost £7 billion more than had been allocated to it. And that was not the worst case scenario. Should all identified risks transpire, then the MOD would be short £14.8 billion.

The NAO acknowledged that the MOD had established a review in January 2018, the Modernising Defence Programme, to take the necessary action to close the funding gap. But the NAO report slapped MOD wrists for not having made the necessary decisions.

The MOD was slated for resorting to short-termism, thereby “increasing the longer-term risks to value for money and the likelihood of returning to past poor practices”.

An MOD spokesman said:

We are confident that we will deliver the equipment plan within budget this year, as we did last year, as we strive to ensure our military have the very best ships, aircraft and vehicles through our £186bn plan. We recognise the financial challenges that these ambitious, complex programmes pose, and are addressing these after securing a £1.8bn financial boost for defence and reducing forecast costs by £9.5bn through efficiency savings. We also continue to work on the Modernising Defence Programme to ensure we have the best capabilities on an affordable footing.

The full report is available here

Sources: MOD; NAO

Image: MOD plaque by Harland Quarrington (Crown Copyright, 2013).