Conclusions and recommendations
1. Military
operations are by their nature unpredictable and it would be understandable
if estimates made at the beginning of the financial year required
revision. But the MoD will undoubtedly have made internal planning
assumptions about the costs of the operations in Iraq and Afghanistan
and we believe these should be shared with Parliament. (Paragraph
7)
2. While we commend
the MoD for bringing forward the presentation of estimates on
the cost of operations in Iraq and Afghanistan to the Winter Supplementary
Estimates, we still consider that there ought to be provision
for the cost of commenced operations in the Main Estimates. We
repeat our earlier recommendation that the MoD consider this.
We expect this change to be made unless a more compelling argument
can be offered for not doing so. (Paragraph 8)
3. We repeat our earlier
recommendation that provision for operations in the Balkans should
in future be set out in the MoD's Main Estimate, and hope that
this will be done in the Main Estimates 2007-08. (Paragraph 11)
4. It seems likely
that the actual additional costs of operations in Iraq and Afghanistan
in 2006-07 will exceed the amounts requested in the Winter Supplementary
Estimate. (Paragraph 21)
5. We commend the
MoD for including considerably more detail on the cost of operations
in the Annual Report and Accounts 2005-06, and recommend that
it continue this practice in future. (Paragraph 25)
6. The outturn for
2005-06 was significantly less than the final voted provision:
the MoD over-estimated the cost of operations by £165 million
(12%)… Where there is significant variation in the cost of
operations between voted provision and outturn in future, we shall
expect the Annual Report and Accounts to contain some explanation
of it, just as there is for significant variations against budgets
in other parts of the Defence Estimate. However, we fully accept
that, if the MoD agrees to publish estimates of the additional
costs of commenced operations at the beginning of the financial
year, as we recommend, the scope for error in those estimates
might be increased. We accept that in following this approach
the MoD might subsequently need to seek additional funds to correct
its initial estimates, by seeking a Supplementary Estimate later
in the year. (Paragraph 26)
7. We welcome the
MoD's proposal of financial incentives to aid retention in the
Royal Marines. We shall be monitoring the retention figures closely.
(Paragraph 30)
8. While we continue
to have some concerns about the manner in which the MoD seeks
parliamentary approval for the costs of operations, we recommend
that the House of Commons approve the request for resources set
out in the MoD's Winter Supplementary Estimate. (Paragraph 31)
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