5th Report - MoD follow-up Spring 2026

It is completely unacceptable that the Department failed to maintain accounting records to support more than £6 billion of assets included in its 2024–25 Annual Report and Accounts. The Comptroller and Auditor General concluded that the Department’s 2024–25 accounts did … Read more It is completely unacceptable that the Department failed to maintain accounting records to support more than £6 billion of assets included in its 2024–25 Annual Report and Accounts. The Comptroller and Auditor General concluded that the Department’s 2024–25 accounts did not provide a true and fair representation of its financial position. This was because the Department had misclassified historic expenditure by the Atomic Weapons Establishment (AWE), some of which dated back to 2007, as spending that had resulted in it developing infrastructure. The issue arose because the Department did not accurately reflect the costs of AWE’s asset management 3 programmes on its own balance sheet. About 85% of the overstatement was due to early-stage feasibility work being capitalised, and the Department is likely to write off some of those costs. The Department has identified control weaknesses in its processes which it needed to put right. However, the Department’s repeated emphasis on the complexity and scale of its spending only highlights the importance of it having effective controls and processes in place across all its activities, which it tests regularly to ensure they continue to fulfil their purpose. The Department should set out: a. What additional checks and processes it has put in place so that the Accounting Officer was assured that all balances reported in the 2025–26 financial statements presented to the National Audit Office for audit were supported by appropriate accounting records and complied with accounting policies. b. How it will ensure that its checks and assurance processes continue to work as intended in future years. c. In writing to the Committee, how much of the costs it has written off, as soon as it has agreed the amount. Show less

The Department is not currently providing Parliament with sufficient transparency over its ever-increasing nuclear expenditure. In 2024–25, the Department spent 18% (£10.9 billion) of the defence budget on the Defence Nuclear Enterprise (DNE), a figure expected to rise to 20% … Read more The Department is not currently providing Parliament with sufficient transparency over its ever-increasing nuclear expenditure. In 2024–25, the Department spent 18% (£10.9 billion) of the defence budget on the Defence Nuclear Enterprise (DNE), a figure expected to rise to 20% for 2025–26, once its accounts have been finalised. The Department expects this will increase further to up to 25% in coming years. Nine DNE programmes have whole-life costs of more than £10 billion. The Department claims that the cost of Dreadnought, which is due to enter service in the early 2030s, currently remains within its £41 billion budget (including a £10 billion contingency). However, published information about other DNE programmes is too vague to allow Parliament to understand and challenge the range of activities they cover, what their costs are and how these have changed over time. The 2025 Strategic Defence Review identified this gap in scrutiny and recommended that Government should develop mechanisms for enhanced Parliamentary scrutiny to provide confidence that taxpayer money is being spent wisely. We understand that the Government has now agreed that a proper scrutiny mechanism will be set up. We call on the Government not to allow the current political uncertainty to delay this is essential parliamentary scrutiny. 4 recommendation The Ministry of Defence must set out how and when it will routinely provide Parliament with more detailed cost and performance information for the nuclear enterprise, so that Parliament can provide taxpayers with the confidence that the increasing DNE budget is being spent wisely. Show less

The Department’s delay in publishing the Defence Investment Plan risks weakening the UK’s defence industrial base. The Department currently spends 85% of its budget in the UK, a proportion that it hopes to maintain or expand as defence spending increases. … Read more The Department’s delay in publishing the Defence Investment Plan risks weakening the UK’s defence industrial base. The Department currently spends 85% of its budget in the UK, a proportion that it hopes to maintain or expand as defence spending increases. This amount of spending means that the Department can be an important element of the UK’s wider industrial strategy. If done right, the Department could provide a considerable stimulus for growth into the UK economy, including investment in infrastructure and skilled jobs throughout the country. The goal is not just to service the domestic market, but also to benefit from the expanding export market for defence equipment. The UK’s ongoing support for Ukraine underlines the UK defence industry’s potential for swift action and technological innovation, particularly amongst small and medium- sized enterprises. The Defence Investment Plan was intended to provide the UK’s defence industry with certainty and give a clear demand signal, thereby encouraging businesses to invest long-term in their capacity and capabilities. Its ongoing absence undermines these aims, with smaller companies suffering more than their larger counterparts. recommendation The Department should write to the Committee urgently, within two weeks of this report, to explain how it is mitigating the impact on suppliers of the delayed publication of its investment plan. Show less

The Department is placing unrealistic expectations on how soldiers operate Ajax vehicles safely when it has still not resolved the underlying noise and vibration issues. In November 2025 Exercise TITAN STORM was stopped when 33 soldiers reported symptoms from noise … Read more The Department is placing unrealistic expectations on how soldiers operate Ajax vehicles safely when it has still not resolved the underlying noise and vibration issues. In November 2025 Exercise TITAN STORM was stopped when 33 soldiers reported symptoms from noise and vibration after operating in Ajax armoured vehicles. Five soldiers were still under medical review when the Department appeared before the Committee in March 2026. The Department claimed that Ajax is safe when operated and maintained correctly within its design parameters but did not explain clearly how this exercise had exceeded those limitations. The Department now expects soldiers to do maintenance checks every time they stop the vehicle, but that seems unreasonable, particularly as soldiers may need to use vehicles for long periods in combat. The need for our soldiers to develop and maintain the skills they require to operate on armoured vehicles is clear, but those vehicles must be fit for purpose. The Department is developing an ‘Ajax 2’ package of upgrades, including composite rubber tracks and 5 automatic track tensioners. These are intended to make Ajax a more comfortable ride for its crew and to improve the lived experience of our soldiers. The Department did not tell us the likely costs of these upgrades and we wait to see, more in hope than in expectation, whether these endeavours will succeed. recommendation The Department should: a. Explain why it believes the current required operating parameters and restrictions for Ajax vehicles are realistic and appropriate, given the nature of the tasks those vehicles and their crews are expected to undertake both in training and on the battlefield. b. Provide a detailed memorandum which sets out precisely how much the Department will pay for Ajax. The memorandum should also include details of: • How much the manufacturer will pay for the delays in delivering a vehicle that is fit for purpose; • The cost of modifications, including the ‘Ajax 2’ enha Show less

The Department does not know whether a recent improvement in recruitment and retention is a result of changes it has made, or whether it can sustain these improved trends. After many difficult years for both recruitment and retention, the latest … Read more The Department does not know whether a recent improvement in recruitment and retention is a result of changes it has made, or whether it can sustain these improved trends. After many difficult years for both recruitment and retention, the latest public statistics for the year to October 2025 point to a corner being turned, with the number of people joining the Armed Forces exceeding the number leaving. The average time between someone applying to join and them starting basic training reduced from 496 in 2023 to 290 days in 2024, and from August 2025 to March 2026 50,816 applicants had received a provisional decision within 10 days of applying and 19,428 had received a date for starting training within 30 days. Faster processing of applications has been helped by the introduction of a new electronic system for doctors to provide a candidate’s medical records, and initiatives such as the new direct entry cyber pathway indicate the Department’s willingness to try new approaches to recruitment. Initiatives to help retention include a new housing strategy, wraparound childcare and improved pay. The Department has not, however, analysed the cause and effect of its initiatives, despite being keen to understand 6 which measures are having what effects. This insight would help the Department ensure that it can attract people with the skillsets the Armed Forces need into a military career. recommendation The Department should: a. Develop robust evidence about what factors affect the inflow and outflow of Armed Forces personnel and ensure that it closely monitors these factors. b. Identify which initiatives to improve recruitment and retention are particularly cost-effective and ensure that these are applied more widely. 7 1 Scrutiny of the Ministry of Defence Introduction Show less

On the basis of the Comptroller and Auditor General’s audit of the Ministry of Defence’s (the Department) Annual Report and Accounts 2024–25, we took evidence from the Department to examine why he had qualified those accounts.1

The Comptroller and Auditor General also qualified the Department’s 2024–25 accounts because of a regularity issue.15 This related to provisions to cover probable compensation and legal costs associated with personal injury claims, and probable costs and compensation associated with Afghan … Read more The Comptroller and Auditor General also qualified the Department’s 2024–25 accounts because of a regularity issue.15 This related to provisions to cover probable compensation and legal costs associated with personal injury claims, and probable costs and compensation associated with Afghan resettlement schemes.16 The Department needed to make a prior-year adjustment because these provisions, totalling £2.56 billion, should have been included at 31 March 2024. It did not have the necessary Parliamentary approval for this prior year adjustment.17 The Department 12 Qq 6 and 8; MoD, Annual Report and Accounts 2024–25, HC 1130, 4 November 2025, pp 142-143 13 Q 27 14 Qq 8-10; MoD, Annual Report and Accounts 2024–25, HC 1130, 4 November 2025, p 157 15 Q 14; MoD, Annual Report and Accounts 2024–25, HC 1130, 4 November 2025, p 142 16 In accordance with International Accounting Standard 37: Provisions, Contingent Liabilities and Contingent Assets, a provision is a liability of uncertain timing or amount. In some circumstances such as a lawsuit, it may be disputed either whether certain events have occurred or whether those events result in a present obligation. In such a case, an entity determines whether a present obligation exists at the end of the reporting period by taking account of all available evidence, including, for example, the opinion of experts. On the basis of such evidence, where it is more likely than not that a present obligation exists at the end of the reporting period, the entity recognises a provision. 17 Q 14; MoD, Annual Report and Accounts 2024–25, HC 1130, 4 November 2025, p 158. 10 has written to the Committee setting out the steps it has now taken so that the Comptroller and Auditor General is made aware of all material provisions and liabilities on a timely basis. The letter also describes the arrangements the Department has put in place so that it can identify such liabilities and properly assess their impact for Parliamentary Expenditure Limits, Show less

The Department repeatedly emphasised that it was a large and complex organisation.19 Controls that are working one year may be less effective the following year. Because of this, the Department said that it constantly tests its controls and processes to … Read more The Department repeatedly emphasised that it was a large and complex organisation.19 Controls that are working one year may be less effective the following year. Because of this, the Department said that it constantly tests its controls and processes to ensure that they are working as planned. The Department said that it was very disappointed, therefore, to have incurred the two qualifications, and was focused on ensuring that it does not happen again. It said it had now identified control weaknesses in its processes which it needed to put right.20 Scrutiny of the Defence Nuclear Enterprise Show less

The Defence Nuclear Enterprise (DNE) has a ring-fenced budget comprising the Defence Nuclear Organisation, including the Submarine Delivery Agency and the Atomic Weapons Establishment, and the nuclear-related costs of parts of the Military Strategic Headquarters, particularly the Royal Navy.21 In … Read more The Defence Nuclear Enterprise (DNE) has a ring-fenced budget comprising the Defence Nuclear Organisation, including the Submarine Delivery Agency and the Atomic Weapons Establishment, and the nuclear-related costs of parts of the Military Strategic Headquarters, particularly the Royal Navy.21 In 2024–25, the Department spent £10.9 billion on the DNE, which was 18% of the defence budget. The Department said it was on course to spend about 20% of its budget on the DNE in 2025–26. While the 10-year forecast depends on the DIP, the Department said that the proportion spent on the DNE would continue to increase in coming years to between about 20% and 25% of its overall budget.22 With the Government aiming to raise defence spending to 3.5% of Gross Domestic Product by 2035, this means that the Department is planning for the DNE to account for a larger proportion of an increasing defence budget.23 Show less

The DNE is a large, complicated portfolio, to which new programmes are added and others are growing. The Department said that it was re- establishing its capability to produce nuclear fuel, and that there have been changes in the scope … Read more The DNE is a large, complicated portfolio, to which new programmes are added and others are growing. The Department said that it was re- establishing its capability to produce nuclear fuel, and that there have been changes in the scope of the DNE portfolio, for example as a result of the AUKUS submarine programme, which involves the United States and Australia. Inflation was also a factor.24 18 Letter from the Ministry of Defence, 20 March 2026 19 Qq 9, 13, 19-20 and 23 20 Qq 9, 13-14 and 19-20 21 Q 1 22 Qq 1-2 23 Qq 32-33 24 Q 2 11 Show less

The Department said that nine DNE programmes have whole-life costs of more than £10 billion, including three submarine programmes, maintaining the existing warhead and designing its replacement, and building complex infrastructure facilities at three sites.25 The Department stated that the … Read more The Department said that nine DNE programmes have whole-life costs of more than £10 billion, including three submarine programmes, maintaining the existing warhead and designing its replacement, and building complex infrastructure facilities at three sites.25 The Department stated that the cost of Dreadnought, which is due to enter service in the early 2030s as the replacement for the UK’s current nuclear-armed submarines, currently remains within its £41 billion budget (including a £10 billion contingency), and undertook to update Parliament if that changes. However, the Department was unable to provide clear information about other DNE programmes, including the range of activities they cover, what their costs are and how these have changed over time.26 Show less

The 2025 Strategic Defence Review identified this gap in scrutiny of the DNE and recommended that Government should develop mechanisms for enhanced Parliamentary oversight. This would help to sustain public support for the nuclear deterrent, ensure stability in delivering the … Read more The 2025 Strategic Defence Review identified this gap in scrutiny of the DNE and recommended that Government should develop mechanisms for enhanced Parliamentary oversight. This would help to sustain public support for the nuclear deterrent, ensure stability in delivering the portfolio and provide confidence that taxpayer money is being spent wisely.27 We understand that the Government has now agreed that a proper scrutiny mechanism will be set up. 25 Q 2 26 Qq 3-4 and 7 27 MoD, Strategic Defence Review – Making Britain Safer: secure at home, strong abroad, 2 June 2025 12 2 Addressing challenges in the defence sector Supporting the UK’s defence industry Show less

The Department told us that the whole point of the Defence Investment Plan (DIP) was to provide genuinely long-term demand signals so that industry, both large and small companies, can invest in preparation. It said that this was vital to … Read more The Department told us that the whole point of the Defence Investment Plan (DIP) was to provide genuinely long-term demand signals so that industry, both large and small companies, can invest in preparation. It said that this was vital to foster a better investment climate, attract companies into the UK, boost exports, and, above all, partner with them for the long term.28 In particular, the Department is looking to stimulate its relationships with small and medium-sized enterprises (SMEs) in the UK. This includes driving UK innovations through investing earlier and being more of a development partner with innovative UK companies.29 Show less

The Department is a key customer for the defence industry, and it currently spends 85% of its budget in the UK, a proportion that it hopes to maintain or expand as defence spending increases. It said that this amount of … Read more The Department is a key customer for the defence industry, and it currently spends 85% of its budget in the UK, a proportion that it hopes to maintain or expand as defence spending increases. It said that this amount of expenditure means it can be an important element of the UK’s wider industrial strategy by spending as much as it can in the UK economy. If done right, the Department thinks it could provide a huge stimulus for growth into the UK economy, including investment in infrastructure and skilled jobs throughout the country.30 Show less

The Department’s goal is not just to stimulate the domestic market, but also to help UK industry benefit from the expanding international market for defence equipment. The Department has established an export team designed to ensure that it buys equipment … Read more The Department’s goal is not just to stimulate the domestic market, but also to help UK industry benefit from the expanding international market for defence equipment. The Department has established an export team designed to ensure that it buys equipment which is not just suitable for the UK’s Armed Forces, but also for our NATO allies and other markets. It also plans to have a team able to negotiate government-to-government deals to create a framework for UK companies to have access to the biggest possible market.31 28 Qq 31-32 29 Q 39 30 Qq 39-40 31 Q 39 13 Show less

The UK’s ongoing support for Ukraine underlines the UK defence industry’s potential for swift action and technological innovation while working with an ally, particularly amongst SMEs. Recent developments include a low- cost drone interceptor and a ground-launched ballistic missile with … Read more The UK’s ongoing support for Ukraine underlines the UK defence industry’s potential for swift action and technological innovation while working with an ally, particularly amongst SMEs. Recent developments include a low- cost drone interceptor and a ground-launched ballistic missile with a range greater than 500 kilometres. The Department said that so far the UK had spent £13 billion supporting Ukraine, and had recently pledged a further £500 million. Part of this has been invested in Ukraine, and part has helped to bring the technology back to the UK. The Department is actively involved with promoting investment opportunities and partnerships with Ukrainian companies.32 Show less

The Department said that it was still awarding contracts, guided by the SDR, despite the delayed publication of the DIP. However, it acknowledged that the delay was having an adverse impact on industry. The Department acknowledged that serial delays were … Read more The Department said that it was still awarding contracts, guided by the SDR, despite the delayed publication of the DIP. However, it acknowledged that the delay was having an adverse impact on industry. The Department acknowledged that serial delays were undermining its credibility with the defence sector. In particular, SMEs were suffering more than larger companies.33 Ajax armoured vehicles Show less

Our predecessor Committee first reported on the failings of the Ajax programme in June 2022. It was told that the Army’s trials team had first raised concerns about vibrations in late 2019, and the Department rightly described it as “unforgivable” … Read more Our predecessor Committee first reported on the failings of the Ajax programme in June 2022. It was told that the Army’s trials team had first raised concerns about vibrations in late 2019, and the Department rightly described it as “unforgivable” that soldiers had been injured because of shortcomings with its safety processes.34 It is astounding, therefore, that in November 2025 Exercise TITAN STORM was stopped when 33 soldiers reported symptoms from noise and vibration after operating in Ajax armoured vehicles. Five of those soldiers were still under medical review when the Department appeared before the Committee in March 2026.35 Show less

The Department said that for our soldiers to develop and maintain the skills they require to operate on armoured vehicles, it needs to get them back on those vehicles as quickly as possible. However, it asserted that the safety of … Read more The Department said that for our soldiers to develop and maintain the skills they require to operate on armoured vehicles, it needs to get them back on those vehicles as quickly as possible. However, it asserted that the safety of our soldiers is of the utmost importance.36 Show less

The Department told us that it had no safety concerns about Ajax provided it was operated and maintained correctly within its design parameters. It then asserted that the incident during the exercise occurred because the vehicles had not been operated … Read more The Department told us that it had no safety concerns about Ajax provided it was operated and maintained correctly within its design parameters. It then asserted that the incident during the exercise occurred because the vehicles had not been operated or maintained within those parameters.37 32 Qq 41-42 33 Qq 31-32 34 Committee of Public Accounts, Armoured Vehicles: the Ajax programme, HC 259, Seventh Report of Session 2022–23, 3 June 2022 35 Q 44 36 Qq 44 and 49 37 Qq 45 and 47 14 Yet the Department admitted that this had deliberately been quite a difficult test, during which soldiers had been operating for a long period. In these circumstances, when travelling across country, the Department said that the tension of tracks alters and that this was a possible cause of the vibrations. The Department confirmed that using Ajax in this way was not wilful ignorance, but a normal part of operating in armoured vehicles.38 The Department’s immediate solution has been to instruct soldiers to do maintenance checks every time they stop the vehicle. It did not explain the practicality of this for soldiers operating Ajax for long periods in combat.39 Show less

The Department told us it is developing an ‘Ajax 2’ package of upgrades, including composite rubber tracks and automatic track tensioners, as a technical solution which would reduce the need for soldiers undertaking the maintenance checks. These modifications are intended … Read more The Department told us it is developing an ‘Ajax 2’ package of upgrades, including composite rubber tracks and automatic track tensioners, as a technical solution which would reduce the need for soldiers undertaking the maintenance checks. These modifications are intended to make Ajax a more comfortable ride for its crew and to “improve the lived experience of our soldiers in the back of that platform”.40 The Department intends to begin trials at the end of 2026 to examine whether this approach would be value for money and make a sustained difference to Ajax’s performance. The Department did not say, however, how much these modifications will cost, nor how much of extra cost will be borne by the manufacturer.41 We are disappointed that the Department are still unable to quantify how much these modifications will cost and how much extra cost will be borne by the manufacturer. Recruitment and retention of military personnel Show less

After many difficult years with both recruitment and retention, the latest public statistics for the year to October 2025 point to a corner being turned, with the number of people joining the Armed Forces exceeding the number leaving. All three … Read more After many difficult years with both recruitment and retention, the latest public statistics for the year to October 2025 point to a corner being turned, with the number of people joining the Armed Forces exceeding the number leaving. All three services have recorded a reduction in the number of trained personnel leaving compared to the previous year, with an 8% reduction in the Royal Navy, 11% in the Army and 20% in the Royal Air Force. Over the same period, the intake of new recruits has increased in all three services, by 7% for the Army, 15% for the Royal Navy and 38% for the Royal Air Force.42 38 Qq 47-48 39 Q 48 40 Q 47 41 Qq 47-49 42 Qq 64 and 67 15 Show less

Data indicates that the time taken to recruit new personnel has fallen. Overall, the average time between someone applying to join and them starting basic training reduced from 496 days in 2023 to 290 days in 2024, and the Department … Read more Data indicates that the time taken to recruit new personnel has fallen. Overall, the average time between someone applying to join and them starting basic training reduced from 496 days in 2023 to 290 days in 2024, and the Department said that this needs to come down further.43 In 2024, to tackle long application waiting times the Secretary of State for Defence announced a new ambition to make a conditional offer within 10 days and confirmation of a training start date within 30 days. This initiative was implemented in August 2025 and, by March 2026, 50,816 applicants had received a provisional decision within 10 days of applying and 19,428 had received a date for starting training within 30 days.44 Faster processing of applications has been helped by the introduction of a new electronic system for doctors to provide a candidate’s medical records. The Department is also reviewing potential barriers to recruitment, including conditions such as asthma, eczema and autism. Initiatives such as the new direct entry cyber pathway also indicate the Department’s willingness to try new approaches to recruitment.45 Show less

Initiatives that have helped improve retention include a new housing strategy, wraparound childcare and improved pay, and the Department particularly flagged the importance of housing.46 Day-to-day maintenance and servicing of the estate has begun to improve, albeit from a very … Read more Initiatives that have helped improve retention include a new housing strategy, wraparound childcare and improved pay, and the Department particularly flagged the importance of housing.46 Day-to-day maintenance and servicing of the estate has begun to improve, albeit from a very poor starting point, with satisfaction with repairs increasing from 23% in January 2023 to 66% by the end of 2025. That services families are beginning to feel the benefits of this is suggested by responses to questionnaires, which are now showing approval rates of 51%, its highest level since 2021.47 The Department said that it had done a huge amount of consultation in the Armed Forces to ensure that the basic design of a modern family home is right. It is also looking to expand the rights to family accommodation to a wider range of family structures, including same-sex partnerships and marriages.48 Show less

The Department acknowledged, however, that there remains much to do to create better, more consistent homes and family experiences for our Armed Forces, and that it will take a decade to create a qualitatively better situation. Following the buy-back of … Read more The Department acknowledged, however, that there remains much to do to create better, more consistent homes and family experiences for our Armed Forces, and that it will take a decade to create a qualitatively better situation. Following the buy-back of 36,000 houses from Annington Homes, the estate is just under 50,000 houses. Of these nine out of 10 need some form of remedial work, and three in 10 need substantial 43 Q 62 44 Q 59; Letter from the Ministry of Defence, 13 April 2026 45 Qq 62-64 46 Q 64 47 Qq 50 and 53; Letter from the Ministry of Defence, 13 April 2026 48 Qq 54 and 56 16 work or demolition.49 We saw examples of poor housing when we visited RAF Marham earlier this year, although we were told that this is now being addressed. Show less

The Department said that ideally it would want to know which of the measures it has taken to improve recruitment and retention are having which of the effects. It has not, however, analysed this. Instead, the Department said it should … Read more The Department said that ideally it would want to know which of the measures it has taken to improve recruitment and retention are having which of the effects. It has not, however, analysed this. Instead, the Department said it should be doing all these things, because a modern employer should be imaginative and creative about engaging with the modern workforce. It thought that this engagement is necessary to ensure that it can attract people with the skillsets the Armed Forces need, such as cyber, engineering and digital, into a military career.50 49 Qq 50 and 56 50 Q 68 17 Show less