Spending watchdog says MOD equipment plans are ‘unaffordable’
The Ministry of Defence’s (MOD) plans for equipment purchases are “unaffordable” and could produce a nearly £15bn funding gap, according to public spending watchdog the National Audit Office (NAO).
It said the MOD’s plan for the next decade, which includes replacing submarine stock and remote-controlled aircraft, was “not sustainable if the department wants to deliver longer-term value for money”.
The MOD has given an estimated cost range of between £188.8bn and £201.2bn over the year, against a £186.4bn budget – giving it an average funding gap of nearly four per cent. The NAO said the costed plans, which include £3.7bn budgeted for “delivery realism” – were “still likely to be understated”.
Amyas Morse, head of the NAO, said plans show the MOD “has a clearer understanding of the affordability issues that it faces, but it equally shows how urgently it needs to get on and tackle them.”
Analysts said “decisions need to be made now” on how to cut costs, finding that 84 per cent of the plan’s projected overspend would happen in the next four years, as it undertakes key spending on its Dreadnought-class submarines.
In its report, the watchdog said: “The NAO recommends that the Department decides which programmes to defer, de-scope or delete as soon as possible.”
The MOD’s report claimed it had attempted to cut costs and reduce risks where possible, saying: “the overall defence budget is under significant pressure”.