Conclusions and recommendations
1. We
commend the MoD for renaming Request for Resources 2 "Operations
and Peacekeeping", which more accurately describes what it
covers. (Paragraph 2)
2. We continue to
believe that the estimated costs of military operations should
be presented in the Main Estimates. We are disappointed that the
Government has not been persuaded of this. We reiterate our compromise
suggestion that—at least—the MoD provide in its estimates
memorandum for the Main Estimates an account of its planning assumptions
for the costs of military operations in the financial year ahead.
Notwithstanding the uncertainty of cost estimates at the beginning
of the financial year, the MoD must surely have planning assumptions.
We can see no reason why these should not be shared with Parliament.
We expect the MoD to respond fully to this recommendation in its
response to this Report. (Paragraph 7)
3. We repeat our earlier
recommendation that provision for operations in the Balkans should
be set out in the MoD's Main Estimate, and hope that this will
be done in the Main Estimates 2008-09. (Paragraph 9)
4. Unless the MoD
can present, in the response to this report, a compelling reason
for continuing current practice, we shall expect provision for
operations in the Balkans to be made in the MoD's Winter Supplementary
Estimate 2008-09—if not already made in the Main Estimates.
(Paragraph 10)
5. The Winter Supplementary
Estimate estimates the additional costs of operations in Iraq
and Afghanistan in 2007-08 as £1,315 million in resources
and £604 million in capital. … The forecast net additional
costs of operations in 2007-08 are £955 million for Iraq
and £964 million for Afghanistan. (Paragraph 11)
6. The cost of operations
in Afghanistan is forecast to increase by 39% in the current year.
Given the increase in UK Forces in Afghanistan in the current
year, and the continuing high operational tempo, this is perhaps
not very surprising. It is striking, however, that three-quarters
of the increase is attributable to capital additions. We recommend
that, in the response to this report, the MoD provide more detail
on the capital programmes involved. (Paragraph 13)
7. It may seem surprising
that the cost of operations in Iraq is forecast to increase in
the current year by 2%, despite the drawdown in UK Forces over
the year. The increase is accounted for by large increases in
infrastructure costs, equipment support costs and capital additions.
… The requirement to invest in facilities at Basra Airport,
and to improve force protection, appears to explain the increase
in the cost of operations in Iraq this year. (Paragraph 14)
8. It is, however,
a little surprising that the military personnel costs for Iraq
are expected to fall by only 5% this year, despite the considerable
drawdown of UK Forces over the year. And it is striking that the
forecast military personnel costs for Iraq (£95 million)
considerably exceed those for Afghanistan (£62 million).
… We recommend that, in the response to this report, the
MoD explain in more detail why military personnel costs for Iraq
are expected to fall by only 5% in the current year. (Paragraph
15)
9. It is likely that
the actual additional costs of military operations in 2007-08
will exceed the amounts requested in the Winter Supplementary
Estimate, and that the MoD will be required to ask for more money
for operations in the Spring Supplementary Estimates. (Paragraph
19)
10. The outturn for
2006-07 operations was less than the sums planned by the Department:
the MoD over-estimated the cost of its operations and peacekeeping
by £75 million (4%). This comprised an underspend on capital
costs of £101 million, offset by a resource overspend of
£26 million. (Paragraph 22)
11. We welcome the
inclusion in the Annual Report and Accounts of an explanation
of the variation between voted provision and outturn for 2006-07.
Given the unpredictability of military operations, it is understandable
that there should be variation between the Estimates and the outturn.
However, we look to the MoD to ensure that its estimates are as
robust as possible and, in particular, that the estimates on capital
costs should be based on realistic expectations of when Urgent
Operational Requirements will be delivered. (Paragraph 24)
12. We recommend that
the House of Commons approve the request for resources set out
in the MoD's Winter Supplementary Estimate. The £1,919 million
requested to meet the forecast cost of operations in Iraq and
Afghanistan in 2007-08 is a large amount of public money, but
it is essential that our Armed Forces are properly resourced to
carry out the task which they have been given. The sum requested
includes investment in new equipment and force protection, which
has been welcomed by all sides of the House.
(Paragraph 25)
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