Conclusions and recommendations
1. The
time permitted for any departmental select committee to examine
its appropriate Supplementary Estimate, from the date of laying
until the date of decision, even taking into account the support
and co-operation from which it might benefit, is still unreasonably
short. This is clearly unsatisfactory for those committees keen
properly to examine their departments' Estimates which can provide
less thorough scrutiny than would otherwise be the case; and still
less satisfactory for the House which enjoys less detailed consideration
of that scrutiny than would seem appropriate for the voting of
very significant sums of public money for use by the government
of the day. This has to change if Parliament is to be able to
do its job effectively. (Paragraph 3)
2. The MoD should
be commended for continuing to provide a clear and informative
Estimates memorandum (Paragraph 4)
3. The Ministry of
Defence is seeking a net increase in resources and capital of
£2,192 million—in cash terms a net increase of £894
million[FN]. This is the additional sum of money required by the
MoD to fund its activity over and above the sums already voted
in the Main and Winter Supplementary Estimates. (Paragraph 5)
4. We are therefore
pleased to note that the MoD in its response to our Report on
the Winter Supplementary Estimate has said that it will, at the
next Main Estimate, include a forecast for Urgent Operational
Requirement (UOR) costs within RfR2 (Paragraph 8)
5. In past Reports
we have asked the MoD to provide information about likely Balkan
costs within its own Estimate earlier in the Financial Year. We
are again pleased that the MoD has decided in its next Main Estimate
to set down its own assumption for what these operational costs
are likely to be in Financial Year 2008-09 (Paragraph 9)
6. We again commend
the MoD for increasing the amount of information which this will
make available to the House at an early stage in the Financial
Year. (Paragraph 9)
7. The most notable
element of the Estimate is the significant increase signalled
in the expected additional costs of operations in Iraq and Afghanistan
in the current Financial Year. (Paragraph 10)
8. In the Winter Supplementary
Estimates, the MoD estimated the additional costs of operations
in Iraq and Afghanistan for 2007-08 as £955 million and £964
million respectively (excluding indirect costs). The MoD now estimates
that these costs will be £1,449 million for Iraq and £1,424
million for Afghanistan. (Paragraph 10)
9. This is an increase
in estimated additional costs for this current year of around
50% for both theatres. (Paragraph 11)
10. While we are aware
that the drawdown of forces in Iraq will not immediately lead
to a comparable decline in costs, nonetheless, the magnitude of
the increase in the costs estimate there is surprising. (Paragraph
12)
11. It is worthwhile
stressing that these increases in estimated costs for this Financial
Year have occurred not since the MoD's Main Estimate was laid
on 30 April 2007 but since the Ministry's Winter Supplementary
Estimate was laid on 15 November. In other words, with the exception
of the indirect costs of these operations, the higher cost estimate
was presumably unforeseen only three months ago. Where in future
Supplementary Estimates bring significant increases in the cost
of operations, the Estimates memorandum should make clear to what
extent the increase is the result of previous under-estimation
and where it is a genuine cost increase. (Paragraph 12)
12. We expect the
MoD to provide us with a full explanation for the very significant
increase in the indirect resource cost of operations in response
to this Report. In addition, we suggest that the MoD states clearly
its expectations with regard to the size of the indirect resource
costs of operations in Iraq and Afghanistan in the next Financial
Year, should operations continue at their current tempo. (Paragraph
14)
13. We are concerned
that the very difficulty of attempting to provide robust forecasts
for the cost of operations might discourage the Ministry from
trying its best to provide a thoroughly considered forecast for
the Supplementary Estimates, Winter and Spring, during the Financial
Year. (Paragraph 15)
14. In our Report
on the Winter Supplementary Estimate 2007-08, we asked the MoD
to consider placing in its next Main Estimate a forecast for its
operational costs in the Balkans for that Financial Year. We are
pleased that the MoD has agreed to include such a forecast, and
accept that the MoD may have to amend this forecast over the course
of the Financial Year in its Winter and Spring Supplementary Estimates.
We remind the MoD that the opportunity for such amendment does
not, however, free the department from its responsibility in the
first instance to provide as robust a forecast as possible. The
House can only benefit from early sight of the MoD's firm assumptions
as to the cost of such operations. (Paragraph 18)
15. We again stress
the unsatisfactorily tight deadline to which all departmental
select committees are expected to work in their study of the Supplementary
Estimates (Paragraph 20)
16. As things currently
stand, it is simply not possible to scrutinise these important
figures as fully as they deserve (Paragraph 20)
17. We recommend that
the House of Commons approve the request for resources set out
in the MoD's Spring Supplementary Estimate. The £2,192 million,
in large part requested to meet the forecast additional cost of
operations in Iraq and Afghanistan during this Financial Year,
represents a significant sum of public money, but we believe that
the task our Armed Forces are carrying out is one that requires
significant resource—especially in terms of new equipment
and force protection, both so essential to their missions abroad.
(Paragraph 21)
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