Public Accounts Committee report: MPs warn Ministry of Defence that there is still more to do stabilise its budget

 
Hayley Kirton
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The MoD has been taking steps to plug a £38bn funding gap identified before a 2010 review (Source: Getty)

The Public Accounts Committee (PAC) urged the Ministry of Defence (MoD) to further safeguard the stability of its budget in a report out today.

The report is in response to an inquiry into the steps the MoD had taken to plug a £38bn gap between the funding the department expected and the costs forecast for defence needs over a 10-year period, which was identified just before a 2010 review. Although the ministry has addressed the £38bn funding mismatch by reducing its costs, the PAC cautions that there is still more to do to keep the budget stable, particularly as some cost savings were achieved by delaying projects to a later date.

“Individual policy challenges should not distract from the fact the MoD needs to keep a grip of its finances,” said Meg Hillier, chair of the PAC. “It is vital it manages its budget effectively, and in particular projects carried out by contractors.”

In particular, the PAC report highlighted a new military flying training system, which was also discussed at the inquiry. Hillier noted that the introduction of this project “proceeded on outdated assumptions and without sufficiently swift action to tackle poor performance”.

However, Hillier added: “More broadly, we recognise the MoD has taken steps to operate within its means and restructure significant aspects of its operation. However, we are concerned it has done so in part by deferring some costs to future years and by delegating responsibilities to staff with limited experience of handling large budgets.”

An MoD spokesperson said: “We welcome this report’s finding that the defence budget is under control. We will always strive to deliver real value for the taxpayer and look forward to our £178bn investment in defence equipment over the next decade, which will give our Armed Forces the kit and support they need and deserve.”

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