Appendix: Government Response
The House of Commons Defence Committee published
a report on 14 March 2006, on the Spring Supplementary Estimates
(SSE), which was debated in the House of Commons on Monday, 20
March, 2006. The Estimate sought additional provision of some
£1,890 million, of which £1,264 million was in respect
of peacekeeping in Iraq and Afghanistan. The Government's response
is set out below.
Contingency in the SSE for RFR2
Including £146 million contingency in the
request for resources, without full supporting detail, is asking
Parliament to take too much on trust (Para 8).
1. The Request for Resources is based upon forecast
costs two thirds of the way through the financial year. However,
due to the often rapidly changing operational situation it is
prudent to include a contingency figure within the estimates.
This figure was based on the best information available at
that time, and on expenditure profile trends in previous years.
Published costs of Operations
We recommend that in future MoD's Annual Report
and Accounts contain significantly more detailed information on
the cost of operations (Para 10).
2. The Department accepts the recommendation and
it will in future provide more detailed information on the cost
of operations in the Annual Report and Accounts for 2005/06.
Provision for commenced Operations
MoD must recognise that the agreement of the Treasury
is not a substitute for Parliamentary approval, and that providing
information to the Treasury is not enough (Para 14).
We consider that the arrangement by which MoD
waits for the Spring Supplementary Estimates before seeking Parliament's
approval of expenditure on operations is unsatisfactory, and we
recommend that it cease. We recommend that in future provision
for commenced operations be made in the Main Estimates in the
usual way, if necessary with a large element for contingency (Para
15).
3. The Department entirely agrees Treasury agreement
is not a substitute for Parliamentary approval; this is a fundamental
constitutional principle. But the Department consults closely
with the Treasury before seeking Parliament's approval to spend
money.
4. Requests for resources for Conflict Prevention
have normally been made in the Supplementary Estimates. Costs
are difficult to forecast in fast moving operational circumstances
and the Department works hard to ensure that the figures presented
to Parliament are taut and realistic: Supplementary Estimates
are the first occasion when the Department can reach a reasonably
firm conclusion. We have only included Programme Conflict Prevention
costs in the Main Estimates for 2006/07, but in the light of the
committee's recommendation will seek provision for Conflict Prevention
for commenced operations in our 2006/7 Winter Supplementary Estimate.
We also recommend that in future MoD provide to
this Committee regular, perhaps quarterly, updates of the cost
of operations, in the same way as it provides information to the
Treasury (Para 16).
5. The Government does not routinely publish Departmental
expenditure data in-year. The Department provides an estimate
based on the forecast of the cost of operations in Supplementary
Estimates. At the end of each year, actual expenditure is audited
by the National Audit Office, and then published in the Annual
Report and Accounts. We will be publishing more detail in this
year's accounts than in previous years.
The format of the Estimates Memorandum
We regret that MoD does not appear to have taken
seriously our predecessors' recommendation that more information
be provided in support of the Spring Supplementary Estimate. We
recommend that the Department ensure that in future its Estimates
Memoranda contain a full break-down of the resources requested
(Para 9).
6. In the Memorandum accompanying 2005/6 Spring Supplementary
Estimates the Department produced significantly more information
than in any previous year.. This included tables of figures breaking
down the detail of the resources required by RFR, detail of transfers
to and from other Government Department, a detailed breakdown
of Provisions and an 'audit trail' of changes since the Main Estimates.
The Department will continue to improve on this. Greater detail
has been included in the Estimates Memorandum supporting the 2006/07
Main Estimates.
We recommend that MoD take steps to ensure that
the Scrutiny Unit's guidance on the production of estimates memoranda
is followed in future (Para 19).
7. We have followed the House of Commons Scrutiny
Unit guidance in many areas, and the Estimates Memorandum supporting
the Spring Supplementary Estimate provided greater detail than
previously, particularly in presenting an audit trail of changes
since 2005/06 Main Estimates, and details of the most significant
changes, along with examples. The Memorandum had been approved
by the Accounting Officer and Ministers before being passed to
the Committee.
8. Comparative figures for the previous three years
will be routinely provided in future starting with the 2006/07
Main Estimates.
9. The end of year flexibility (EYF) was drawn down
at Winter Supplementary Estimates. Because the position on EYF
had not changed, no additional information was shown in the SSE
Estimates Memorandum. Future Estimates Memoranda will include
a paragraph on end of year flexibility.
10. The Defence budget is not broken down by PSA
targets, but by functional area (Top Level Budget holder) which
is used to manage the Department. The nature of the Ministry of
Defence's PSA does not lend itself to the sensible attribution
of expenditure.
Operations in the Balkans
We recommend that in future provision for operations
in the Balkans be set out in MoD's Main Estimates (Para 17).
11. Provision for operations in the Balkans comes
from the Global Conflict Prevention Pool. The Foreign and Commonwealth
Office has always been the lead department for administering the
funds, and requests funding in its Estimates on behalf of all
the Pool members. This mechanism was established by Ministers
to provide funding for a range of activities provided both through
multilateral organisations (such as the UN and EU) and bilaterally.
It covers the cost of UK military and civilian activities in this
area, as well as the UK's assessed share of the central costs
of such missions.
12. The advantage of the current arrangement is that
it allows flexibility to respond to a volatile international scene
in which the overall demand for peace support activity is constantly
changing. One of the principles underlying the peacekeeping budget
is to provide greater transparency by consolidating peacekeeping
and peace-enforcement activity into a single budget and manage
the funding of the UK's peacekeeping activities as a whole.
13. In the Balkans the peacekeeping budget also,
for example, provides funding for the EU and UN police missions
in Bosnia and Kosovo. Placing all resources within a single budget
allows a better picture of the overall UK contribution and allows
the three departments to prioritise resources over time. In many
cases, a large-scale military intervention will give way in time
to greater emphasis on police and other civilian elements. It
is important that we have a system in place that is flexible enough
to deal with these changing priorities, as well as to respond
to unexpected events.
14. Accordingly, the Government does not accept this
recommendation.
Deployment to Afghanistan
Telling Parliament that the costs of the deployment
to Afghanistan is "around a billion" is just not good
enough. This is a very large amount of public money, and the public
deserve better information on how it is going to be spent (Para
18).
15. The Afghanistan deployment costs for future years
are difficult to forecast in fast moving operational circumstances,
and the Department needs to ensure that the figures presented
to Parliament are taut and realistic: the Winter Supplementary
Estimate is the first occasion when the Department can reach a
reasonably firm conclusion. The following table shows the estimated
cost of operations in Afghanistan from 2005/06 to 2009/10.
| Category
| Estimate £m
|
| Training | 52
|
| Urgent Operational/sustainability Requirements
| 224 |
| Platform Sustainability
| 158 |
| Cost of deployment |
118 |
| Start up costs (Infrastructure)
| 65 |
| Running Costs | 424
|
| Recuperation | 30
|
| Total | 1,071
|
| 
