Fifty-Second Report - Ministry of Defence Equipment Plan 2021–31
Select Committee
Public Accounts Committee
HC 1164
11 May 2022
Recommendations
2 results
3
Accepted
The Plan’s affordability relies on the Department achieving a number of different types of savings,...
Recommendation
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 …
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Government Response Summary
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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20
Accepted
Pressed on the £4 billion for which there are no plans yet, the Department explained...
Recommendation
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 …
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Government Response Summary
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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Conclusions (2) Observations and findings — click to expand
19
Conclusion
Accepted
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 of ‘planned cost reductions’ and £2.8 billion of ‘potential efficiencies …
Government Response Summary
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.
21
Conclusion
Accepted
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 spend is already committed over the next ten years. Air …
Government Response Summary
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.