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NAO Report - UK MoD Equipment Plan 2021 to 2031

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NAO Report - UK MoD Equipment Plan 2021 to 2031

Old 29th Mar 2022, 19:25
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NAO Report - UK MoD Equipment Plan 2021 to 2031

I suspect as attention was focused elsewhere, the release of the NAO's Report on The Equipment Plan 2021 to 2031 on 21 February seems to have gone unremarked here. My take on it is, that if it was an OFSTED report the summary of findings would state 'there are be some clear areas of improvement but the Department will remain in special measures'. I found myself muttering 'No sh*t Sherlock' at certain points.

Full Report


A few gems to whet your appetites:

From the Summary
Cost estimates
10 Some project teams have identified a range of costs not currently included in the Plan, which could result in financial risk if the Department does not reassess its priorities. The Department could address this risk by accepting scope reductions or later delivery of the capability in the related projects. Including these costs would increase the cost of the Plan by £4.2 billion, and both new and existing projects are affected, although none of them have secured full business case approval.1 The Department has the opportunity to re-visit budgets at that stage. The amount included for one of these projects – the Future Combat Air System – could be considerably less than the funding required over the next 10 years. Its affordability will depend on assumptions about the capability, timetable and contribution from
international partners

Negative cost adjustments
12 The Plan’s budget and projected costs assume that Top Level Budgets (TLBs) will reduce equipment costs by £7 billion over the next 10 years. They do not yet have plans to achieve £3.9 billion of these ‘Planned Cost Reductions’, but the Department’s worst-case affordability scenario assumes that only £935 million of savings will not be achieved. Navy and Air Commands need to identify many more savings than the other TLBs; Air Command has little flexibility as it is already committed to 62% of its spending over the next 10 years. The TLBs also still need to implement £2.8 billion of efficiency savings (defined as cost reductions which do not affect outputs), which are not well developed, on top of the savings already deducted from projects. Outside the Equipment Plan, the Department requires TLBs to make at least £3.7 billion of savings over and above their headcount reduction targets.

From the Full Report
(Key findings)
7 The Department has invested in new capabilities and cut or deferred some
existing programmes, and assesses that the Plan is now affordable.. ...
It also intends to defer some investments to save money in the short term. In some cases, this will lead to higher costs because of the need to re-contract at higher prices (at the time of the Integrated Review, it expected delaying a project to buy new Chinook helicopters by three years would cost an additional £295 million).

(Part Two Affordibility of the Equipment Plan)
Financial risks to delivering projects

2.7 ...
The affordability of the Department’s plans will depend on the extent it is able to share development costs with international partners. Similarly, early business cases for the New Medium Helicopter and Future Commando Force programmes show that these programmes
are currently underfunded. If the Department fails to take action in future to match budgets with planned capability, it risks repeating the same mistakes made in previous Defence Reviews, namely that plans are “over-ambitious and under-funded, leaving forces overstretched and under-equipped”.(Quote is fromSecretary of State’s Foreword, Defence in a Competitive Age, CP 411, March 2021,)

(Part Three Improving the Plan)
The limited success of the Department’s reform programmes
It is 10 years since Lord Levene’s wide-ranging independent review of the Department concluded that its management and organisation needed fundamental reform, including recommending a change to its operating model to establish the principle of delegation to TLBs. The 2011 Defence Reform Programme (DRP), which followed the review, contained at least 15 projects relevant to the Plan, including implementing a new framework to improve financial and capability management to prevent funding shortfalls, and a business improvement and behaviours programme to counter a culture of over-optimism.

3.20 However, change has been difficult to achieve. By 2015 the Department recognised the DRP was not going as well as expected, and the Strategic Defence and Security Review that year promised a boost to reform activity over the following five years. But both our value for money audits and Parliamentary scrutiny before and since the 2015 review have shown that the Department’s efforts at reform have had limited success. The chair of the Committee of Public Accounts (the Committee) noted in her 2021 annual report that it was repeatedly highlighting “issues about cost overruns and project management by the Department. Time and time again we see that decisions are delayed, causing more problems later”
SLXOwft is offline  
Old 30th Mar 2022, 15:52
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It's quite clear the UK Armed forces are asked to do more than the country is willing to pay - until that is understood and acted on this will just go on and on
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Old 31st Mar 2022, 19:13
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Maybe it is time to actually cut our cloth accordingly? There are ways to provide top class capability without spaffing billions - just depends if you're able to think differently.
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Old 1st Apr 2022, 07:29
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The hard questions are

1. are we willing to give up high end capability and make do with less expensive kit?

2. are we willing to say there are some places we will not go (eg E of Suez)?

3. are we willing to give up the deterrent??

Any one of these would make a major impact on our ability to achieve a workable armed forces capability - the problem is that by hanging on to all three we are failing at all of them.

OR we can say yes we want to do it all - now here is the bill and here is what will be cut elsewhere/tax rises to pay for it
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