Conclusions and recommendations
1. As
we said in our recent Report on the MoD Supplementary Estimates,
we welcome the fall in the cost of operations in Afghanistan which
reflects the reduced involvement in combat operations. However,
given the possible increase in insurgent activity as NATO combat
troops are withdrawn, the MoD should not be afraid to request
additional resources for Afghanistan should the need present itself.
(Paragraph 11)
2. We recommend that
the MoD put forward any continuing costs of operations in Mali
in the 2014-15 Main Estimate and include the funding split between
the Deployed Military Activity Pool and the Conflict Prevention
Pool in the associated Main Estimate memorandum. However, we further
recommend that costs of Mali operations should come from the Treasury
Special Reserve. We consider this issue further in paragraphs
15-17 below. (Paragraph 14)
3. We are concerned
that the establishment of the Deployed Military Activity Pool
is a breach of the principle that all net additional costs will
be met from the Treasury Special Reserve and outside general discussions
on the MoD core budget. In response to this Report, the Government
should explain the intention behind the creation of the Deployed
Military Activity Pool. We strongly recommend that the Treasury
should not undermine the principle of the funding of operations
from the Treasury Special Reserve rather than from the MoD's core
budget. (Paragraph 17)
4. We recognise that
Annually Managed Expenditure is, by its nature, difficult to predict
accurately. But we would expect that, as experience of implementing
the Armed Forces Compensation Schemes increases and the pattern
of voluntary outflow stabilises, the MoD would become better at
estimating costs, income and liabilities. We, therefore, echo
the recommendation made in our recent Report on the MoD Supplementary
Estimates for 2012-13 that the MoD should set itself a target
to keep additional requests at the time of the Supplementary Estimates
to five per cent of that requested at the time of the Main Estimate.
(Paragraph 22)
5. The House should
be aware that the MoD is requesting net resources of some £38.7 billion
and capital expenditure of some £9.8 billion in its Main
Estimate and net resources for the Armed Forces Pension and Compensation
Schemes of £5.7 billion for 2013-14. Within the total requested
the MoD has asked for some £2.8 billion to cover the cost
of operations, some 12 per cent less than 2012-13. Resource expenditure
is also planned to fall in line with the Spending Review 2010.
We recommend that the Main Estimates for the MoD and the Armed
Forces Pension and Compensation Scheme are approved by Parliament
and we have identified no issues which require a debate before
it does so. (Paragraph 23)
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