Merlin helicopter

The UK Ministry of Defence (MoD) has released the third annual update to the defence equipment plan, which sets out its spending plans for the next decade.

The ten-year plan includes spending nearly £163m on new equipment and support services for the armed forces.

Approximately £40bn is likely to be spent on the acquisition of submarines, while £15.4bn and £11.1bn have been allocated for land equipment such as tanks and armoured vehicles, and helicopter capabilities, respectively.

UK Defence Equipment, Support and Technology Minister Philip Dunne said: "For the third successive year it is realistic and affordable and provides excellent value for money to the taxpayer across the coming decade, as evidenced by our success in securing savings in equipment support, which we have been able to factor in to the ten-year plan."

The update coincides with the release of a National Audit Office (NAO) report that includes results from assessments of the affordability of the MoD’s equipment plan.

The plan has been merged into one document with the MoD’s major projects report, which claims that the cost of the ministry’s 11 biggest equipment programmes dropped by £397m last year.

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Acknowledging the progress the MoD is continuing to make, including the relative stability of forecast project costs, the report states that this represents the MoD’s best cost performance since 2005 and the best time performance since at least 2001.

"For the third successive year it is realistic and affordable."

It also highlights areas where the ministry must continue to improve and refine its processes.

NAO head Amyas Morse said: "Our work on the equipment plan reveals a number of positive features, not least the relative stability of forecast project costs and control over in-year variations in approved timings and costs of major projects.

"The MoD has, however, chosen a higher risk approach to managing the affordability of the equipment plan by relying on over-optimistic forecasts of costs and future savings, not all of which might be achievable in reality.

"The department will need to be watchful and swift to react if costs start to grow."

The MoD has already retained a central contingency provision of £4.6bn over ten years and £8bn of additional funds to meet any unexpected costs.

Image: A UK Royal Navy Merlin helicopter in flight. Photo: courtesy of leading airman (photographer) Dave Jenkins, Crown copyright.