It's a prisoner's dilemma, isn't it? Any player in the Whitehall funding game naive honest enough to tell the truth about the cost of their wish-list (or, alternatively, the limits of the capability deliverable within their budget) risks whole programmes being scrapped, or in extremis their whole organisation being sidelined. So everyone is incentivised to lie and backstab be "creative" in their analysis; optimism bias and failure to deliver to time and cost are therefore fundamental characteristics of the system. Note, this applies across Government, not just within MOD. Occasional attempts to play it straight tend to work out disastrously for those brave enough to try.