- The UK’s National Audit Office has examined Ministry of Defence spending into key nuclear defence costs and the Afghan resettlement scheme
- NAO analysis found the MoD did not provide supporting evidence for audit purposes that legacy programme values were accurate
- MoD did not brief NAO on Afghan data breach until after lifting of the UK government’s super injunction earlier this year
The UK’s National Audit Office (NAO) has said accounting by the UK Ministry of Defence (MoD) relating to over £8.5bn ($11.9bn) in programmatic and legal liability funding has directly led to a revision of opinions regarding the MoD’s 2024-25 financial statements.
In a 4 November release, the NAO stated that a “lack of accounting records” for some ongoing capital projects and a “materially significant” shortfall in provisions for liabilities in the previous year’s accounts led the Comptroller and Auditor General’s (C&AG) decision.
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The NAO said, as of 31 March 2025, projects carried out by the Atomic Weapons Establishment (AWE), a non-departmental body that helps deliver the UK’s nuclear deterrent, constituted £6.13bn of the value of the department’s assets under construction. Of this total, £1.5bn was identified as relating to legacy projects.
However, the value of AWE’s legacy projects had “remained unchanged for several years”, and the MoD was unable to provide supporting evidence for audit purposes or any assurance that the continued recognition of this value was appropriate, the NAO stated.
The NAO also identified several other balances within the £6.13bn that “did not appear to meet the criteria for continued recognition in line with accounting standards”.
As a result, the C&AG has limited the scope of the audit opinion on the MoD’s financial statements for 2024-25.
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By GlobalDataThe NAO also identified a shortfall of £2.56bn in the provisions for legal and other liabilities the MoD had recognised in its 2023-24 financial statements, relating to compensation and costs to settle legal claims associated with personal injury claims, including noise-induced hearing loss.
The second matter concerned compensation and resettlement costs relating to the Afghan Relocations and Assistance Policy (ARAP) and the Afghanistan Response Route (ARR).
The NAO said that the MoD “had been expensing costs relating to the ARAP and ARR as they were incurred” and had not considered whether a provision was required for their future obligations.
Further, the MoD “did not brief the NAO” on the existence of a significant data breach and subsequent establishment of the ARR until after a super-injunction was lifted in July 2025.
“Taken together, these two matters constitute a material omission from the MoD’s 2023-24 accounts, necessitating their restatement. The MoD did not have appropriate authorisation from Parliament for this expenditure, which has resulted in a qualified regularity opinion,” the NAO stated.
