Defense Ministry accused of overspending as ‘black hole’ budget hits £ 17bn


The Parliament’s expenditure watchdog accused the UK Ministry of Defense of over-ambitious spending that exceeds its resources, as it revealed that the “black hole” in the armed forces’ equipment budget now stands at £ 17.4 billion.

A National Audit Office report released on Tuesday berated the Defense Ministry for presenting an unaffordable equipment plan for the fourth year in a row and warned that the ministry’s calculations did not even include the full cost of flagship projects such as the future Tempest combat aircraft program, the successor to the Astute submarine and a new military space command.

The criticism comes just two months after Downing Street announced a surprise £ 16.5 billion increase in Defense Ministry budgets over the next four years to revitalize the armed forces and fund new investments in cyber capabilities , space and naval. However, the watchdog warned that even with these new spending, tough decisions about savings would have to be made.

“To date, the fundamental problem with the Department of Defense has been that the cost of achieving its ambition far exceeds its available budget,” said Gareth Davies, head of the NAO. “Faced with an unaffordable equipment program, he took a short-term approach to financial management that prevents military commands from developing the equipment they need and drives up costs in the longer term. “

According to the report, the Ministry of Defense estimates a shortfall of £ 7.3 billion in its equipment budget of £ 190 billion for 2020-2030, although in the worst-case scenario the shortfall is win could reach £ 17.4 billion. Last year, the most pessimistic estimate was £ 13 billion, but the NAO has warned the figures are not directly comparable due to changes in the way deficits are calculated.

The Defense Ministry stressed that the plan was prepared before the funding increase obtained in November and said the Defense Secretary was “committed to matching ambition with resources for future equipment plans. “.

However, Meg Hillier, chairman of the public accounts committee, said that while the £ 16.5bn spending settlement might give the Department of Defense “much needed breathing space” it might not be. sufficient to develop the capabilities that the armed forces need.

“The Defense Ministry has yet to make stubborn decisions about what it can afford,” she said. “The equipment plan must be more than just a wish list, be based on nebulae” efficiency savings “so that the sums add up. “

While all military services have funding shortfalls, that of the Royal Navy is the largest at £ 4.3bn, or 12% of its overall costs. The navy is at the heart of Boris Johnson’s plans to strengthen the armed forces after the Prime Minister pledged last year that further investment in shipbuilding “would restore Britain’s position as the premier naval power in the world. ‘Europe’.

Malcolm Chalmers, deputy director general of the Royal United Services Institute, said the infusion offered “an opportunity to rebalance the Defense Department’s equipment budget, with all the benefits this can bring in terms of rapid and cost-effective supply “.

“But it also makes it clear that the extra money for defense equipment will be largely spent on funding existing, although previously underfunded commitments, and not entirely new programs,” he added.


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