The PAC report, which scrutinises UK public sector spending, said that despite “year after year” of warnings from itself and the National Audit Office (NAO) the MOD had yet to establish a stable basis “for making an affordable military Equipment Plan, or a realistic approach to delivering efficiency savings.”
Committee chair Meg Hillier said the MOD “knows what it’s getting wrong”, adding that the department had seemingly failed to act on the recommendations of the committee leaving gaps in the UK’s defence.
Hillier said: “The MOD knows what it’s getting wrong. We know what it’s getting wrong. For years we have made concrete proposals to improve delivery of key strategic priorities and here we are again, with the same gaps in our national defence and the same risk to our armed forces personnel, year after year.”
Hillier added that the committee wants the MOD and the Treasury to deliver a plan to turn around the issues by the end of the year.
“We are saying to the MoD and to the Treasury now; come back to us by the end of the year with a concrete plan for how you are going to turn this around, how you are going to do this differently, from now on. The nation and the armed forces that protect us are owed that much.” Hillier said.
The PAC said that the MOD had admitted prioritising a culture of “hitting internal targets above delivering defence capability,” adding that the short-term focus on managing annual financial pressure had only served to increase the overall cost of programmes and reduce capabilities further.
The committee added that failures highlighted in a recent report on the MOD’s nuclear defence programme added to the push for the MOD and Treasury to move to a “system of managing strategic programmes on a multi-year basis”. The committee added that the MOD should prove “why it should be trusted” with the new approach as it is rolled out.
The PAC also noted that Covid-19 had the potential to disrupt the delivery of key capabilities even further.
The report noted that the government had still ‘not taken the strategic decisions required to establish an affordable Equipment Plan’ adding that the department’s failure to ‘get a grip’ on the equipment despite years of warnings was lamentable.
In light of this, the PAC report recommends: “The department must demonstrate financial prudence by developing the next Equipment Plan with affordability and long-term sustainability at its core.
“The department should write to the committee within one month of the publication of the next Equipment Plan to explain what it has done differently in order to reduce the plan’s affordability gap.”
Another recommendation is that the upcoming Integrated Review “must balance ambitions for future military capabilities with an affordable long-term investment programme” to ensure problems with the current equipment plan are not repeated.
Another of the report’s conclusions reads: “The Department’s focus on managing financial pressures on an annual basis creates bigger problems for future years as the budgetary imbalance grows, and slows the development of military capabilities.”
The PAC said that the MOD had missed the past two opportunities, the Modernising Defence Programme and the Spending Review 2019, to develop a more affordable equipment plan.