MoD in £1.2 billion underspend...

[Willard Whyte]

MoD in £1.2 billion underspend as thousands of troops are sacked - Telegraph (http://www.telegraph.co.uk/news/uknews/defence/10825822/MoD-in-1.2-billion-underspend-as-thousands-of-troops-are-sacked.html)

The Commons' Public Accounts Committee warned that George Osborne may be "tempted" to make further cuts because of the underspend, which the Ministry of Defence said it could not explain.

My italics.

Is MoD fit for any purpose whatsoever, let alone their raison d'être? One gets the impression that a chimps tea party is in progress, 24/7.

[Heathrow Harry]

but last year they overspent by £ 1 bn didn't they?

[500N]

And I read that first as $1.2 million,
then realized what it really said :rolleyes:

[just another jocky]

Ooh great.....we're running short of printer paper!

[CoffmanStarter]

The B Word ... That's why there aren't any Size 10 Flying Boots in the Stores then :}

[Bastardeux]

but last year they overspent by £ 1 bn didn't they?

Nope, they underspent by roughly the same amount last year, I'm not sure whether its a tactical move, given the MoD's ability to roll its underspends into following years...

[skippedonce]

I'm not sure whether its a tactical move

... or simply another illustration of the (lack of) ability to forecast and manage a budget!

[Bastardeux]

probably that.

[Jet In Vitro]

Current management applied too much risk across the board. Safe but restricts new projects.

I

[VinRouge]

Get the impression we are back to VSO promotion down to budgetary control and underspend as opposed to sensible decision making.

And its currently absolutely destroying morale on the front line.

[GOLF_BRAVO_ZULU]

Before the usual suspects get carried away with the popular passtime of kick-the-MoD, there's a whole raft of reasons why the Equipment Budget has underspent. Without sight of the individual elements, though, we don't know what they are likely to be. As Bastardeux suggested, it could be tactical but that's a dangerous plan where those treacherous sods in the Treasury are concerned.

For all of you who are worked up about cuts to the Manpower Budget, unless someone's changed the rules, you can trade bodies for kit but not the other way round.

[Heathrow Harry]

struck me quite a bit of it could be the Rivet Joints .....

not yet accepted so not paid for

[dervish]

What gets me is not the amount of the alleged underspend but MoD's claim it can't explain it. It smacks of leadership saying "don't overspend at all cost", even if that cost is complete ignorance of what you're doing.

[hoodie]

Here's an alternative view:

What's Wrong With An Underspend? (http://www.thinkdefence.co.uk/2014/05/whats-wrong-spend/)

[Jet In Vitro]

HH,

The Air Sneaker will have been paid for. The FMS requirement was for an RJ. USAF have delivered as per the contract.

Not being able to fly them, is not USAF's problem.

[glad rag]

HH
Not being able to fly them, is not USAF's problem.

http://www.googlenexusforum.com/forum/attachments/nexus-7-roms-2nd-generation/2948d1379636650-what-s-small-android-update-even-after-clean-flash-cleanrom-1-6-252890.jpg

What the :mad: have the MOD been doing!

[ShotOne]

Based on the limited info available it's a bit early to be taking the usual pot shots. What WOULD be shocking is if it turned out we were reverting to the old -and idiotic practice of "get it spent at all costs". There's lots of valid reasons why a budget might be underspent.

[Willard Whyte]

As I alluded to initially, and has been mentioned subsequently, it's the MoD's inability to 'explain' the underspend which is ludicrous, not the underspend itself.

A million here or there, fair enough(!), but £1.2 Billion?

[Biggus]

How do they know they are £1.2Bn underspent? Presumably because they have some form of accounts in terms of money spent.

Assuming (and it's a big assumption) they had a list of "planned/budgeted expenditure" then surely a comparison of the 2 would show where the under spend has occurred? You can't get much more basic than that.

As WW said, it's not the under spend itself that is embarrassing for MOD, it's the inability to 'explain' how/why/where it occurred that is the cause for concern!

It certainly implies they haven't got a firm grip on things....

[Cows getting bigger]

My wet finger tells me that £1.2bn is about 3%. If I missed the mark by 3% (either way) my company directors would be feeling my parts, hats off, no sherry.

[The B Word]

The B Word ... That's why there aren't any Size 10 Flying Boots in the Stores then

Coff

You're not wrong! One of the reasons for this underspend will be the fact that DIO would not take any further funds in July 13 as they did not have capacity in their work services contract - yes, that's a whole 3 months after the start of the Financial Year with 9 months to go! :ugh:

The Defence Infrastructure Organisation (DIO) is the biggest crock, ever! Along with its Regional Prime Contractors it is costing us at least 40% more than it would cost if we locally sourced infra services direct through the Station's leadership. However, even at 40% over the market rate we still can't spend the money as they don't have the capacity in their contracts.

Then there's DE&S - don't get me started on that cash cow. Both DIO and DE&S between them see our 4-5th biggest defence budget get reduced to the 30th most potent Armed Force in the world.

In my humble opinion, of course!

The B Word

[triboy]

When seeking approval for a project the scrutiny process expects de&s to have 10-15% risk. As most projects have been kicked for contributing to the 38Bn overspend it follows that they will become pessimistic. All those 10% risk budgets have resulted in an in-year underspend. It doesn't necessarily mean the front line has got less stuff than it planned but less than it may have got if it was not so risk averse. In the grand scheme of things whilst the MOD didn't purchase more stuff the treasury probably shaved 1.2Bn off the 1.3Tn deficit.

[Dengue_Dude]

Praps all the flag rankers will get a big bonus . . . works for bankers (appropriate eh?)

[VinRouge]

Next best thing Dengue.

KBE's all round, the missus becomes a lady and doesnt struggle to get a dinner booking at la gavroche any more...