The Ministry of Defence’s (the Department’s) 10 year Equipment Plan (the Plan) continues to be unaffordable despite this Committee and the NAO consistently highlighting serious affordability issues in the Plan year after year. The 2019–2029 plan is too expensive by between an estimated £2.9 billion and £13 billion. The Department has still not made the hard choices necessary to balance the Plan and address the affordability gap, which arises in part from a failure to fully fund ambitions set out in the 2015 Strategic Defence and Security Review. The Department is instead stuck in a cycle of managing its annual budget, using additional funds to offset financial pressures, and making short-term decisions which result in poor, long-term value for money. Plans for efficiency savings remain totally unrealistic; for example £4.7 billion of savings are assumed without plans for how they will be delivered.
The Department has also struggled to deliver key military capabilities, including equipment, to anything like their required timescales. Of 32 of its top priority programmes, a third are at serious risk of not being delivered on time and capabilities are reaching the full operational stage on average over two years late. The most common cause of delays is late or faulty equipment delivered by suppliers, a problem exacerbated by the impact of COVID-19. Ongoing Departmental transformation programmes to improve capability delivery lack clear metrics to measure their success. We are extremely frustrated that we see the same problems year after year and that, despite repeated departmental assurances that it will make progress, there appear to be no consequences for failure to deliver.
Published: 15 July 2020