MoD Equipment Plan 2021-31

Public Accounts Committee Closed Inquiry
Opened: 21 Feb 2022 Closed: 2 Sep 2022 Parliament page
The Committee will take evidence on the NAO’s report on the annual Ministry of Defence Equipment Plan: https://www.nao.org.uk/report/the-equipment-plan-2021-to-2031/ The Equipment plan sets out the MoD’s intended investment in equipment and support projects over the next 10 years . Each year the NAO publishes a report, published in parallel with the … Read more
8 Recommendations
25 Conclusions
1 Report
1 Oral session
1 Letter
1 Event
Activity timeline 5 events
2 Sep
2022
Report published
22 Jun
2022
Correspondence
11 May
2022
Report published
28 Feb
2022
Oral evidence
28 Feb
2022
Formal meeting (oral evidence session) · The Grimond Room, Portcullis House
Oral evidence sessions 1 session
28 Feb 2022
View on parliament.uk
MoD Equipment Plan 2021-30
Air Marshall Richard Knighton · Ministry of Defence Charlie Pate · Ministry of Defence David Williams CB · Ministry of Defence Sir Simon Bollom · Ministry of Defence
Title HC No. Published Items Response
Fifty-Second Report - Ministry of Defence Equipment Plan 2021–31 HC 1164 11 May 2022 33 Responded
Recommendations & Conclusions
33 results
2 Recommendation Not Addressed
Fifty-Second Report - Ministry of …
The Department appears complacent about the affordability of its Plan and still does not yet...
The Department appears complacent about the affordability of its Plan and still does not yet have robust arrangements in place to control the cost of its largest programmes. The Department believes that its Spending Review settlement and the decisions it … Read more
Government Response
The response discusses Électricité de France’s (EDF) strategies, plans and the estimated costs, but does not detail the current cost of the Dreadnought, Replacement Warhead and FCAS programmes.
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3 Recommendation Accepted
Fifty-Second Report - Ministry of …
The Plan’s affordability relies on the Department achieving a number of different types of savings,...
The Plan’s affordability relies on the Department achieving a number of different types of savings, including £7 billion of ‘cost reductions’ by 2031. The Top Level Budgets (TLBs) do not yet have plans to achieve £4 billion of the ‘cost … Read more
Government Response
TLBs have targets and plans to achieve these savings, closely monitors and scrutinises Top Level Budget (TLB) planned cost reductions in the annual budget cycle, and considers that the savings are achievable.
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4 Recommendation Acknowledged
Fifty-Second Report - Ministry of …
Likely additional costs in other areas of departmental spending, such as on its workforce and...
Likely additional costs in other areas of departmental spending, such as on its workforce and sizeable estate, may squeeze the Plan’s budget in future years, further threatening its affordability. The Department’s plans to make substantial reductions to its military and … Read more
Government Response
The government agrees with the Committee’s recommendation and recognises the importance of managing risks to affordability, particularly from challenges in areas such as workforce and estates.
HM Treasury
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5 Recommendation Acknowledged
Fifty-Second Report - Ministry of …
The Department remains a long way short of having the finance skills it needs to...
The Department remains a long way short of having the finance skills it needs to manage the Plan effectively. Strong financial skills are needed to manage the large and complex set of programmes, crucial to a well managed and affordable … Read more
Government Response
The government agrees with the Committee’s recommendation and is committed to improving financial professionalism by training personnel, working with professional bodies, and supporting professional development.
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6 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
The Department has made little impact in its efforts to change its longstanding cultural resistance...
The Department has made little impact in its efforts to change its longstanding cultural resistance to change or criticism, which has for many years hindered a clear-eyed view of its equipment procurement performance. Senior officials do not acknowledge the poor … Read more
Government Response
The government acknowledges the committee's conclusion regarding cultural resistance to change, committing to monitoring progress of NAO recommendations, promoting critical acquisition behaviours and culture, improving management information, and forging closer links with industry through the Supplier Partnering Programme.
HM Treasury
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1 Conclusion Not Addressed
Fifty-Second Report - Ministry of …
On the basis of a report by the Comptroller and Auditor General, we took evidence...
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Defence (the Department) on the Department’s ten-year Equipment Plan (the Plan) which sets out its plans for the procurement and support … Read more
Government Response
The response acknowledges the report but doesn't address the substance of the conclusion.
HM Treasury
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7 Conclusion Not Addressed
Fifty-Second Report - Ministry of …
Outside the Plan, we asked if the proposed cuts to the regular Army to 73,000...
Outside the Plan, we asked if the proposed cuts to the regular Army to 73,000 from 82,000 meant the UK would not have enough soldiers.10 The Department stressed to us that the UK has “responded positively” to every request from … Read more
Government Response
The response discusses the Programme, skill development, and risk management, but does not address the question of whether the UK has enough soldiers given proposed cuts to the regular Army.
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8 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
The Department told us that it intended to use the Plan’s increased budget to fund...
The Department told us that it intended to use the Plan’s increased budget to fund both new capabilities and existing programmes. Significantly the Plan now includes £8.65 billion budget for the Future Combat Air System (FCAS) programme. This is a … Read more
Government Response
The government notes the conclusion regarding the Future Combat Air System (FCAS) programme, stating that the Concept and Assessment phase concludes in 2024, which will provide evidence on programme specifications, schedule, and costs, while also engaging with international partners on cost share and industrial benefits.
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9 Conclusion Not Addressed
Fifty-Second Report - Ministry of …
The Department also told us it intends to buy more F-35 aircraft.16 It had previously...
The Department also told us it intends to buy more F-35 aircraft.16 It had previously told us that the 48 F-35 aircraft it is currently purchasing would not be enough to sustain Carrier Strike operations throughout the life of its … Read more
Government Response
The response restates the conclusion about the Department's intention to buy more F-35 aircraft.
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10 Conclusion
Fifty-Second Report - Ministry of …
An example of new funding for more established programmes is the new radar for the...
An example of new funding for more established programmes is the new radar for the Typhoon. Although it had been in development for several years before the decision to buy it was announced in 2015, the Department did not include … Read more
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11 Conclusion
Fifty-Second Report - Ministry of …
More widely, the Committee asked whether the Plan was now based on a large number...
More widely, the Committee asked whether the Plan was now based on a large number of past assumptions, observing that it does not include funding for capabilities 7 Q2 8 Q8 9 Q86 10 Qq 7–8 11 Q88 12 Q64 … Read more
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12 Conclusion
Fifty-Second Report - Ministry of …
However, the NAO report found that in the Plan the Department has only set aside...
However, the NAO report found that in the Plan the Department has only set aside £1.05 billion from 2026–27 to 2030–31 to exploit research to develop usable military capabilities.24 This expenditure is only 0.4% of the Plan’s total budget, although … Read more
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13 Conclusion
Fifty-Second Report - Ministry of …
The Department told us that, thanks to the funding increase in the Spending Review and...
The Department told us that, thanks to the funding increase in the Spending Review and the Integrated Review process, it thinks the Plan is now affordable, although there are financial and capability risks in its delivery.27 The Department also told … Read more
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14 Conclusion
Fifty-Second Report - Ministry of …
This is the first time the Department has claimed the Plan is affordable for four...
This is the first time the Department has claimed the Plan is affordable for four years. And given the NAO has repeatedly reported on the Department’s focus on short term affordability at the expense of long-term value for money, we … Read more
HM Treasury
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15 Conclusion
Fifty-Second Report - Ministry of …
We asked why the Department is forecasting to spend more than its capital budget in...
We asked why the Department is forecasting to spend more than its capital budget in seven of the next 10 years. The Department responded that the differences in those years were quite small and it judged them to be manageable.32 … Read more
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16 Conclusion
Fifty-Second Report - Ministry of …
We considered the Department’s controls over the costs of the Plan’s largest programmes, in particular...
We considered the Department’s controls over the costs of the Plan’s largest programmes, in particular the nuclear projects such as Dreadnought submarines and the replacement Warhead programme. As the NAO notes, nuclear projects amount to about £60 billion in the … Read more
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17 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
The Department told us that it was confident that the Dreadnought programme would not exceed...
The Department told us that it was confident that the Dreadnought programme would not exceed its lifetime budget of £31 billion plus £10 billion contingency.38 It did not agree that the contingency amounted to a blank cheque, and said that … Read more
Government Response
The government acknowledges the committee's conclusion regarding the Dreadnought programme's budget and contingency, and states that the contingency's purpose is clearly defined and subject to HM Treasury scrutiny. Discussions are underway with HM Treasury regarding future governance and funding arrangements.
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18 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
On the replacement Warhead programme, the Department pointed to its 2021 action to bring the...
On the replacement Warhead programme, the Department pointed to its 2021 action to bring the Atomic Weapons Establishment back under direct Government control, to help better control costs. In addition, it is investing in skills in the Defence Nuclear Organisation. … Read more
Government Response
The government acknowledges the committee's conclusion regarding the replacement Warhead programme, stating that the contingency's purpose is clearly defined and subject to HM Treasury scrutiny. Discussions are underway with HM Treasury regarding future governance and funding arrangements.
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19 Conclusion Accepted
Fifty-Second Report - Ministry of …
The Plan’s affordability depends on the Department achieving a number of different types of savings...
The Plan’s affordability depends on the Department achieving a number of different types of savings by March 2031. As the NAO reported, these amount to nearly £22 billion, which comprises around £12 billion of ‘management adjustments for realism’, £7 billion … Read more
Government Response
The government agrees with the Committee’s recommendation and says that TLBs have targets and plans to achieve these savings, and the department closely monitors and scrutinises Top Level Budget (TLB) planned cost reductions in the annual budget cycle.
HM Treasury
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20 Recommendation Accepted
Fifty-Second Report - Ministry of …
Pressed on the £4 billion for which there are no plans yet, the Department explained...
Pressed on the £4 billion for which there are no plans yet, the Department explained that the target is based on an assumption of what the TLBs can deliver. The Department told us that Head Office scrutinises about 80 of … Read more
Government Response
The government agrees with the Committee’s recommendation, stating that it has been implemented, and TLBs have targets and plans to achieve these savings. The department closely monitors and scrutinises Top Level Budget (TLB) planned cost reductions in the annual budget cycle and will include further information on TLB cost reductions in the upcoming Equipment Plan 2022 due to be published in Autumn 2022.
HM Treasury
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21 Conclusion Accepted
Fifty-Second Report - Ministry of …
We noted that £2.6 billion of the £4 billion savings—two thirds of the total—needs to...
We noted that £2.6 billion of the £4 billion savings—two thirds of the total—needs to be achieved by March 2025. This is despite the fact that contractual commitments limit TLBs’ flexibility to make savings, for example 62% of Air Command’s … Read more
Government Response
TLBs have targets and plans to achieve these savings, closely monitors and scrutinises Top Level Budget (TLB) planned cost reductions in the annual budget cycle, and considers that the savings are achievable.
HM Treasury
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22 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
The Department has made a number of assumptions about how much it will spend on...
The Department has made a number of assumptions about how much it will spend on its workforce (and other operating costs) and on its estate and infrastructure over the next 10 years. If it spends more than it currently expects … Read more
Government Response
The government acknowledges the committee's conclusion regarding workforce and estate spending assumptions, recognizing the importance of managing risks to affordability, detailing the EP21's affordable plan, and planning a major focus on affordability for 2022-32 in the EP22.
HM Treasury
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23 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
The Department plans to make substantial reductions to its military and civilian workforces over the...
The Department plans to make substantial reductions to its military and civilian workforces over the next 10 years. These include reducing the Army from 82,000 to 73,000; other savings equivalent to reducing trained military workforce by 6,350 (and their untrained … Read more
Government Response
The government acknowledges the committee's conclusion regarding workforce reductions, recognizing the importance of managing risks to affordability, detailing the EP21's affordable plan, and planning a major focus on affordability for 2022-32 in the EP22.
HM Treasury
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24 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
In addition to these reductions, the Department’s spending plans currently assume further workforce savings of...
In addition to these reductions, the Department’s spending plans currently assume further workforce savings of £2.5 billion over the 10 years to March 2031.52 The Department told us that plans had not yet been drawn up to achieve these reductions, … Read more
Government Response
The government acknowledges the committee's conclusion regarding workforce savings and pay rises, recognizing the importance of managing risks to affordability, detailing the EP21's affordable plan, and planning a major focus on affordability for 2022-32 in the EP22.
HM Treasury
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25 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
The condition of the Department’s estate is set to continue to decline despite an additional...
The condition of the Department’s estate is set to continue to decline despite an additional £500m to be spent on ‘preventative’ maintenance until March 2025.55 Service accommodation remains in a very bad way which risks harming recruitment and retention of … Read more
Government Response
The government acknowledges the committee's conclusion regarding the condition of the Department’s estate, recognizing the importance of managing risks to affordability, detailing the EP21's affordable plan, and planning a major focus on affordability for 2022-32 in the EP22.
HM Treasury
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26 Recommendation Acknowledged
Fifty-Second Report - Ministry of …
In order to produce a Plan which is effective, realistic and affordable, the Department needs...
In order to produce a Plan which is effective, realistic and affordable, the Department needs to have in place the right arrangements and capabilities, many of which have previously been absent or incomplete. With such a financially complex Plan, it … Read more
Government Response
The government agrees with the Committee’s recommendation and mentions that the department monitors progress of NAO Value for Money recommendations including Equipment Plan report recommendations and provided an update on the Equipment Plan PAC recommendations through refreshed Treasury Minutes published on 9 June 2022. Further detail of progress with the recommendations and how this translates to changes to the plan will be provided as requested in the Autumn.
HM Treasury
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27 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
Strong financial skills are necessary at all levels for good management of the many hundreds...
Strong financial skills are necessary at all levels for good management of the many hundreds of complex projects which make up the Plan. Yet, according to HM Treasury, the Department languishes in the third quartile of government departments in terms … Read more
Government Response
The government acknowledges the committee's conclusion regarding financial skills, committing to improving financial professionalism by training personnel, supporting professional development, and working towards the Government Finance Function ambition of ensuring at least 60% of the finance profession are qualified.
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28 Recommendation Acknowledged
Fifty-Second Report - Ministry of …
We were interested as to why there had been so little progress since last year.
We were interested as to why there had been so little progress since last year. The Department acknowledged “we are not where we want to be”, but told us that things were going in the right direction, and that there … Read more
Government Response
The government agrees with the Committee’s recommendation and is committed to improving financial professionalism by training personnel, working with professional bodies, and supporting professional development.
HM Treasury
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29 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
We found that our witnesses did not readily acknowledge the poor state of affairs of...
We found that our witnesses did not readily acknowledge the poor state of affairs of current procurement. The Chief Executive of Defence Equipment and Support told us that, while he did not pretend his programmes were perfect, there has been … Read more
Government Response
The government agrees with the Committee’s recommendation and will monitors progress of National Audit Office’s (NAO’s) Value for Money recommendations, promote critical acquisition behaviours and culture, use management information, and forge closer links with industry.
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30 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
We were interested to understand why information about project performance does not always seem to...
We were interested to understand why information about project performance does not always seem to flow freely and openly through the Department. The Permanent Secretary told us about the Ajax programme’s Health and Safety Report’s identification 57 C&AG’s report, para … Read more
Government Response
The government agrees with the Committee’s recommendation and will monitors progress of National Audit Office’s (NAO’s) Value for Money recommendations, promote critical acquisition behaviours and culture, use management information, and forge closer links with industry.
HM Treasury
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31 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
We asked about the lack of tolerance of those involved in projects to voice their...
We asked about the lack of tolerance of those involved in projects to voice their concerns without facing serious repercussions. The Permanent Secretary told us that “there are some particular challenges within the uniform chain of command about how you … Read more
Government Response
The department monitors progress of National Audit Office’s (NAO’s) Value for Money recommendations including Equipment Plan report recommendations and Acquisition Reform agenda includes work to promote critical acquisition behaviours and culture. Further detail of progress with the recommendations and how this translates to changes to the plan will be provided as requested in the Autumn.
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32 Conclusion Acknowledged
Fifty-Second Report - Ministry of …
Departmental reform efforts have made limited progress.
Departmental reform efforts have made limited progress. We note the NAO’s finding that the current Defence Transformation Programme, of which a key element is to change both processes and culture within the Department, is already behind schedule. A July 2021 … Read more
Government Response
The government acknowledges the committee's conclusion regarding departmental reform, committing to monitoring progress of NAO recommendations, promoting critical acquisition behaviours and culture, improving management information, and forging closer links with industry through the Supplier Partnering Programme.
HM Treasury
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33 Recommendation Acknowledged
Fifty-Second Report - Ministry of …
The Permanent Secretary insisted that progress is being made on changing behaviour and culture, but...
The Permanent Secretary insisted that progress is being made on changing behaviour and culture, but admitted that such changes “are not quick”. He also said that reducing the level of bullying, harassment and discrimination within the Department is a matter … Read more
Government Response
The government agrees with the Committee’s recommendation and mentions that the department monitors progress of NAO Value for Money recommendations including Equipment Plan report recommendations and provided an update on the Equipment Plan PAC recommendations through refreshed Treasury Minutes published on 9 June 2022. Further detail of progress with the recommendations and how this translates to changes to the plan will be provided as requested in the Autumn.
HM Treasury
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Government Response AI assessment · 26 of 8 classified
Accepted 4
Acknowledged 18
Not Addressed 4
Total 8 recs + 25 conclusions
Correspondence 1 letter
22 Jun 2022 Correspondence from the Ministry of Defence, relating to the Public Accounts Committee Report – MoD Equipment Plan 2021-31, dated 21 June 2022
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