Further memorandum from the Ministry of
Defence
WINTER SUPPLEMENTARY
ESTIMATES 2004-05
Commander-in-Chief Fleet (RfR1-A); Commander-in-Chief
Land (RfR1-C); and Commander-in-Chief Strike Command (RfR1-D)
are to have a decrease in Net Provision of some £836 million.
The decrease for Commander-in-Chief Strike Command is some 12%
of the present Net Provision. What is the reason for these decreases
in Net Provision, and what areas within these commands will be
affected?
The alterations to budgetary allocations for
the CinC Fleet, CinC Land and CinC Strike included in Winter Supplementary
Estimates represent decreases in depreciation and cost of capital
charges relating to previously planned fixed asset holdings. The
changes brought these Top Level Budgets into line with the revised
defence programme announced on 21 July 2004.
Since the Winter Supplementary Estimate was
laid, internal allocations of budgets to TLBs have changed further
to reflect normal management processes and adjustments within
the defence programme, including the movement of funds between
TLBs where the responsibility for carrying out a task has changed.
These changes will be reflected in Spring Supplementary Estimates.
The Defence Procurement Agency (RfR1-K) is to
have an increase in Net Provision of just over £1 billion.
What is the reason for this substantial increase (a 50% increase
over the present Net Provision)? To what extent does it relate
to cost increases to major defence equipment projects reported
by the National Audit Office?
The increase in the budgetary allocation for
the DPA represents the non-cash consequences of changes in provisions
for liabilities and charges and is not linked in any way to cost
increases on major defence equipment projects.
January 2005
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