Armed Forces in £20bn cash crisis
BRITAIN’S Armed Forces could be more than £20billion short of cash needed to buy crucial equipment, a shocking report reveals today.
MPs criticised a lack of financial control at the Ministry of Defence, saying it “simply does not have enough money” to buy what it needs.
They also feared for “its ability prepare for serious challenges national defence”.
Defence bosses continue “to be reliant on ever-increasing and optimistic savings targets”, the Public Accounts Committee said.
The renewal costs of the Dreadnought and Astute submarine projects, Britain’s nuclear deterrent, were identified to in as major problems for the MoD. The committee report stated: “A significant affordability gap has again opened up; with forecast costs at least £4.9billion, and potentially as much as £20.8billion, more than the £179.7billion budget.
“The department did not account for £9.6billion of forecast costs.
“This variance arose as a result of the department’s 2017 budget-setting process not being able to match costs to available budgets.
“The department did not complete the budgeting exercise for the plan until May 2017, two months after the start of the 2017-18 financial year, due to significant difficulties in reaching agreement on the best approach to manage the affordability gap that had arisen in the defence programme.”
The UK is also increasingly reliant on “strong international alliances” for a military response, the committee added. The report went on: “There are now a number of emerging threats, such as cyber and artificial intelligence, leading to changes in the nature of the defence landscape.
“However, there is a lack of flexibility in the 10-year plan…with spending dominated by a number of large platforms which take years to build”.
Two new aircraft carriers, termed Queen Elizabeth Class, are estimated to have cost the Ministry of Defence £6.2billion. Committee chairman Meg Hillier said: “It is concerning the MoD could find itself more than £20billion short of the funding required to buy the equipment it says it needs.
“The MoD’s inability to better quantify that affordability gap has consequences not just for its confirmed spending plans, but also its ability to prepare for serious challenges in national defence.
“The Department must be more rigorous and realistic in its approach to costing its equipment plan. It also needs to be more open with Parliament and the public about its finances.”