Defence Equipment Plan 2020-2030

Public Accounts Committee Closed Inquiry
Opened: 21 Dec 2020 Closed: 17 May 2021 Parliament page
The Ministry of Defence (MoD) publishes a ten-year Equipment Plan report every year, setting out intended investment on equipment and support projects over the next 10 years. It assesses whether this is affordable within its future budget. The Plan includes equipment already in use, such as the Lightning II jets, … Read more
9 Recommendations
18 Conclusions
1 Report
1 Oral session
3 Letters
1 Event
Activity timeline 6 events
31 Aug
2021
Report published
29 Jun
2021
Correspondence
16 Mar
2021
Report published
1 Mar
2021
Correspondence
4 Feb
2021
Oral evidence
18 Jan
2021
Correspondence
Oral evidence sessions 1 session
4 Feb 2021
View on parliament.uk
Defence Equipment Plan 2020-2030
Air Marshall Richard Knighton · Ministry of Defence Charlie Pate · Ministry of Defence Sir Simon Bollom · Ministry of Defence Stephen Lovegrove · Ministry of Defence
Title HC No. Published Items Response
Fiftieth Report - Defence Equipment Plan 2020–2030 HC 693 16 Mar 2021 27 Responded
Recommendations & Conclusions
22 results
Clear
2 Recommendation Accepted
Fiftieth Report - Defence Equipmen…
Because of the repeated delays to the publication of the Integrated Review of Security, Defence,...
Because of the repeated delays to the publication of the Integrated Review of Security, Defence, Development and Foreign Policy, the Department was not able to provide details of how it proposes to use the £16.5 billion additional defence funding, or … Read more
Government Response
The government agrees with the recommendation and committed to writing to the Committee before summer recess with a summary of investment and savings decisions, and will publish the annual Equipment Plan in Autumn 2021 after review by the NAO.
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3 Recommendation Accepted
Fiftieth Report - Defence Equipmen…
The Department’s failure to break the cycle of short-term financial management is preventing it from...
The Department’s failure to break the cycle of short-term financial management is preventing it from developing essential military capabilities in ways that achieve value for money and is restricting its ability to respond to new opportunities or threats. The Department’s … Read more
Government Response
The government agrees and commits to writing to the Committee alongside the Equipment Plan 2021 (Autumn 2021) to outline key principles for future investment decisions and how the plan will remain affordable.
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4 Recommendation Accepted
Fiftieth Report - Defence Equipmen…
The Defence equipment programme is routinely jeopardised by factors that drive inflation in defence projects.
The Defence equipment programme is routinely jeopardised by factors that drive inflation in defence projects. Defence projects are often long-term, complex and involve new technologies, which makes them vulnerable to cost inflation. This Committee has highlighted that inflation in equipment … Read more
Government Response
The government accepted the recommendation, agreeing to undertake a comprehensive study into defence cost inflation drivers and report the results to the Committee alongside the annual Equipment Plan in Autumn 2021. It also highlighted ongoing work on investment decision-making and acquisition culture to address attitudes and behaviours.
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5 Recommendation Accepted
Fiftieth Report - Defence Equipmen…
The Department has not established a reliable and sophisticated approach to estimating the cost of...
The Department has not established a reliable and sophisticated approach to estimating the cost of its future equipment programme, including setting realistic efficiency savings. The Department acknowledges the risk of costs escalating on its equipment projects, which are often large, … Read more
Government Response
The government agrees with the recommendation and will explain improvements in assessing risk and detail efficiency savings in the next Equipment Plan report. It has established a programme board, created centralised guidance and tools for risk costings, and plans to embed this guidance fully starting in FY 2021-22.
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6 Recommendation Accepted
Fiftieth Report - Defence Equipmen…
The Department does not have all the necessary arrangements or qualified staff in place to...
The Department does not have all the necessary arrangements or qualified staff in place to provide assurance that its Equipment Plan is reliable and has been subject to rigorous quality assurance. The Department has made some improvements to its production … Read more
Government Response
The government accepted the recommendation, outlining plans for a Finance Functional Leadership Programme by March 2023, including professional training, qualification recommendations for recruitment, standardised service delivery, and developing centralised guidance and resources for analysts by Summer 2021 to strengthen financial capabilities and quality assurance.
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7 Recommendation Accepted
Fiftieth Report - Defence Equipmen…
In our report on the Equipment Plan 2019–2029, we expressed our concern that the Department...
In our report on the Equipment Plan 2019–2029, we expressed our concern that the Department had still not established an affordable long-term investment programme in military equipment and had missed opportunities to take the necessary difficult decisions to develop an … Read more
Government Response
The government accepted the recommendation to set a balanced defence budget, citing the £24 billion increase in defence spending and the publication of the Integrated Review and Defence Command Paper. It committed to demonstrate how these changes, alongside decisions to retire older capabilities and improve financial management, have improved the affordability of the Equipment Plan in the Autumn 2021 report.
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9 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
The Permanent Secretary also explained that the Department has had to live with an annual...
The Permanent Secretary also explained that the Department has had to live with an annual budget cycle and plan its equipment programme without the certainty of funding over a 10-year period. He explained that this was very difficult to manage. … Read more
Government Response
The government agrees with the implied recommendation and will write to the Committee alongside the Equipment Plan 2021, outlining key principles for future investment decisions and steps to ensure the equipment plan remains affordable and delivers value for money, building on recent publications and new investments.
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10 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
The Department acknowledged the risk of costs escalating on its biggest programmes— nuclear submarines and...
The Department acknowledged the risk of costs escalating on its biggest programmes— nuclear submarines and IT and communications systems—which are large, complex programmes involving the development of new technologies.19 It told us it assesses the risk of cost increases on … Read more
Government Response
While the committee item was a conclusion identifying shortcomings in the Department's approach to assessing risk for complex projects, the government accepted it as a recommendation. It committed to explaining improvements in the next Equipment Plan report (Autumn 2021), establishing a programme board to strengthen risk recording, creating centralised guidance and tools, and embedding these improvements from FY 2021-22.
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11 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
The Department acknowledged that its equipment projects are subject to uncertainties that affect their delivery...
The Department acknowledged that its equipment projects are subject to uncertainties that affect their delivery and cost. It is responsible for managing the risk of cost increases within its annual budget. For example, as approximately 15% of the Plan’s forecast … Read more
Government Response
While the committee item was a conclusion describing uncertainties like foreign exchange impacts on equipment costs, the government accepted it as a recommendation. It committed to explaining improvements in risk assessment in the next Equipment Plan report (Autumn 2021) and has established a programme board to strengthen risk recording, guidance, tools, and monitoring across the portfolio from FY 2021-22.
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12 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
The Department’s adjustments to its cost estimates are still over-optimistic, including its assessment of the...
The Department’s adjustments to its cost estimates are still over-optimistic, including its assessment of the level of potential efficiency savings.26 We have previously raised our concerns that the Department was including efficiency savings that it was not confident of 17 … Read more
Government Response
The government agrees with the implied recommendation, stating the next Equipment Plan report will explain improvements in assessing risk and detail planned efficiency savings. It has established a programme board to strengthen risk assessment, created centralised guidance, and plans to embed this guidance from FY 2021-22 to improve risk reporting.
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14 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
We have previously recommended that the Department should improve its financial skills and asked what...
We have previously recommended that the Department should improve its financial skills and asked what progress had been made.34 The Department had not increased the number of professionally qualified finance staff, and said it was unhappy that the proportion of … Read more
Government Response
While the committee item was a conclusion noting insufficient progress in increasing professionally qualified finance staff, the government treated it as a recommendation. It accepted and detailed plans under its Finance Functional Leadership Programme to provide professional training, integrate qualifications into recruitment, and streamline service delivery to increase capacity by March 2023.
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15 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
The Department admitted that its Head Office was not providing sufficient challenge on the financial...
The Department admitted that its Head Office was not providing sufficient challenge on the financial judgements made by the TLBs when compiling the Equipment Plan.37 Because of the way the Department is organised under the delegated model, Head Office cannot … Read more
Government Response
The government agrees with the implied recommendation, setting a target implementation date of March 2023, and outlines plans to strengthen financial capabilities and Head Office's challenge function through professional training, skills certificates, a standardised service delivery model, and centralised guidance for analysts.
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16 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
The Department claimed it has fulfilled previous Committee recommendations, albeit that it accepted that some...
The Department claimed it has fulfilled previous Committee recommendations, albeit that it accepted that some improvements were on-going.42 The National Audit Office has found that the Department has made improvements to its analysis and reporting, for example improving the presentation … Read more
Government Response
The government agrees with the implied recommendation, setting a target implementation date of March 2023, and details plans to strengthen financial capabilities through professional training, certificates, standardised service delivery, and developing centralised guidance and resources for analysts.
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18 Recommendation Accepted
Fiftieth Report - Defence Equipmen…
We have repeatedly urged the Department to take the difficult investment decisions needed to develop...
We have repeatedly urged the Department to take the difficult investment decisions needed to develop a balanced investment programme, highlighting missed opportunities to address fundamental weaknesses in its management of the Equipment Plan.48 The Department acknowledged that the lack of … Read more
Government Response
The government agrees with the recommendation and will write to the Committee alongside the Equipment Plan 2021, outlining key principles for future investment and steps to ensure affordability and value for money. It highlights ongoing efforts and recent publications to achieve a balanced approach.
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19 Recommendation Accepted
Fiftieth Report - Defence Equipmen…
The Department could not provide us with a detailed explanation of how it planned to...
The Department could not provide us with a detailed explanation of how it planned to use the additional £16.5 billion of funding as ministers have yet to finalise decisions.51 Given that the 2020–2030 Equipment Plan is unaffordable, it accepted that … Read more
Government Response
The government agrees and commits to writing to the Committee before summer recess with a summary of investment and savings decisions, working with the NAO for review, and publishing the annual Equipment Plan in Autumn 2021.
HM Treasury
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20 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
The Department confirmed that the Integrated Review—which had not been published at the time we...
The Department confirmed that the Integrated Review—which had not been published at the time we took evidence—would contain substantially different capability choices from the current Equipment Plan.55 The government intends that the additional funding will be invested in capability enhancements … Read more
Government Response
The government agrees and commits to writing to the Committee before summer recess with a summary of investment and savings decisions following the Integrated Review, working with the NAO for review, and publishing the annual Equipment Plan in Autumn 2021.
HM Treasury
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22 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
We are concerned that the Department has no flexibility in its 2020–2030 Equipment Plan budget,...
We are concerned that the Department has no flexibility in its 2020–2030 Equipment Plan budget, which limits its ability to respond quickly to new or emerging threats.63 The National Audit Office report showed that the Department has only made provision … Read more
Government Response
The government states it has published the Defence Command Paper with new investment and is taking a balanced approach with appropriate risk and contingency, demonstrating mechanisms for a coherent program and modernization. It is also strengthening its approach to managing the defence portfolio for agility and will provide further details with the Equipment Plan 2021.
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23 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
The Department also needs ‘headroom’ in its budget to keep up with the pace of...
The Department also needs ‘headroom’ in its budget to keep up with the pace of change on new technologies.66 It is therefore assessing how much contingency is appropriate for both the nuclear programme and more conventional equipment projects in the … Read more
Government Response
The committee noted the need for budget headroom for new technologies and clearer investment plans. The government responded by referencing the Defence Command Paper and additional £16.5 billion investment since the report, stating it has since taken a balanced approach with appropriate risk and contingency, investing in new capabilities like space.
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24 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
We remain extremely concerned that the Department continues to manage a long- term spending programme...
We remain extremely concerned that the Department continues to manage a long- term spending programme on a year-by-year, cash-limited budget.69 Faced with funding shortfalls, the Department took a range of measures to balance its 2020–21 budget, including introducing commitment levels … Read more
Government Response
The committee expressed concern about managing a long-term spending programme on a year-by-year, cash-limited budget. The government responded by citing the Defence Command Paper and the additional £16.5 billion investment from the 2020 Spending Review, stating these enable a balanced approach with appropriate risk and contingency to fund modernisation and new capabilities.
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25 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
The National Audit Office has also reported that the Department’s continued focus on living within...
The National Audit Office has also reported that the Department’s continued focus on living within its in-year budget is affecting its ability to develop the military capabilities that are needed.72 The commands undertook yet another re-prioritisation exercise to balance the … Read more
Government Response
The government states it has published the Defence Command Paper and is investing an additional £16.5 billion into new capabilities, taking a balanced approach with appropriate risk and contingency, and disinvesting in others, which demonstrates mechanisms to deliver a coherent program.
HM Treasury
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26 Conclusion Accepted
Fiftieth Report - Defence Equipmen…
Faced with an unaffordable programme, we questioned the Department’s ability to achieve value for money...
Faced with an unaffordable programme, we questioned the Department’s ability to achieve value for money from its equipment expenditure. We have seen many examples of the Department not buying the quantity of kit or the number of capabilities that it … Read more
Government Response
The government states it has published the Defence Command Paper outlining new policy aims and capability decisions, underpinned by additional funding. It explains it is taking a balanced approach to investment and modernisation, including divesting from some capabilities like the Warrior Capability Sustainability Programme.
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27 Recommendation Accepted
Fiftieth Report - Defence Equipmen…
While pointing out that this was also a problem encountered by other countries, the Department...
While pointing out that this was also a problem encountered by other countries, the Department acknowledged that it did not have a good understanding of the unique factors that drive inflation on defence projects, and that there was work to … Read more
Government Response
The government agrees with the recommendation to better understand and manage defence cost inflation, committing to write to the Committee with the annual Equipment Plan in Autumn 2021 and highlighting ongoing work by economics and statistics teams and acquisition transformation efforts.
HM Treasury
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Government Response AI assessment · 27 of 9 classified
Accepted 22
Acknowledged 4
Not Addressed 1
Total 9 recs + 18 conclusions
Correspondence 3 letters
29 Jun 2021 Correspondence from David Williams, Permanent Secretary, Ministry of Defence, re follow up to 4th February PAC oral evidence session: Defence Equipment Plan 2020-2030, dated 22 June 2021
Parliament page
1 Mar 2021 Correspondence from Sir Stephen Lovegrove, Permanent Secretary, Ministry of Defence, re Follow up questions to PAC hearing on 4 February, dated 26 February 2021
Parliament page
18 Jan 2021 Correspondence from Sir Stephen Lovegrove, Permanent Secretary, Ministry of Defence, re EQUIPMENT PLAN 2020-2030: UPDATE ON AFFORDABILITY, dated 12 January 2021
Parliament page