National Audit Office Press Releases
The Equipment Plan 2019 to 2029
The National Audit Office (NAO) yesterday reported that the Ministry of Defence’s Equipment Plan (the Plan) is still unaffordable, with the MoD estimating that costs will be £2.9 billion higher than its budget over 2019-2029.
The Plan sets out the MoD’s equipment and support budget over the next 10 years. It includes spending on equipment already in use and equipment in development. It accounts for 42% of the MoD’s total spending, meaning stability of the wider defence budget depends on effective management of the Plan.
The Plan forecasts spending £183.6 billion on equipment and support costs over the next ten years, against a £180.7 billion budget. These costs could vary, and in a worst case scenario, should all the risks identified by the MoD materialise, this gap could grow to £13 billion.
This is the third successive year that we have concluded the Plan is unaffordable. Although the MoD’s reported funding shortfall is less than last year, it is not possible to directly compare the affordability gap over time as the Department has presented it on a different basis to before. In particular, it has made more optimistic judgments than last year, which removed £7.8 billion costs from the Plan. In spite of this, it is clear that the MoD faces more significant shortfalls over the next five years – it estimates the shortfall is £6 billion up to 2023-24 – and it now has less flexibility to respond to short-term financial pressures.
The MoD is managing these financial pressures by establishing tighter control of in-year expenditure and has undertaken a detailed analysis of investment options. However, it has again delayed the difficult decisions to make the Equipment Plan affordable and determine its priorities on future major capabilities. Its continued short-term focus on living within its annual budget is increasingly leading to reduced capabilities. For example, unless action is taken, MoD will lose existing capabilities, such as the medical facilities provided by the ship RFA Argus, during the period covered by the Plan. Decisions to defer project expenditure are also reducing value for money. For example, affordability-driven decisions to delay the introduction of Protector (remotely piloted aircraft) will increase costs by £187 million, plus a further £50 million to retain existing equipment for longer.
“The MoD has not made the necessary strategic decisions to address the 10-year affordability gap and there is evidence that its continued short-term focus on living within annual budgets is increasingly affecting the Armed Forces’ ability to maintain and enhance the UK’s military capability. The MoD needs to determine its strategic priorities so that it can develop an affordable long-term programme of investment.”
Gareth Davies, head of the NAO
Notes for Editors
- The Equipment Plan covers large and complex procurement projects including nuclear-deterrent submarines (Dreadnought-class), global combat ships, new armoured vehicles (Ajax) and Lightning II aircraft. It also includes a budget to support new and in-service equipment, such as maintaining Typhoon aircraft, and introducing modern information and communications technology.
- The Equipment Plan was introduced in 2012. At the request of the then Secretary of State, the NAO provides Parliament with a commentary on the Plan when it is published each year, and assesses the robustness of its underlying assumptions. A link to the 2019-2029 Equipment Plan published by the MoD can be found here.
- Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
- The National Audit Office (NAO) helps Parliament hold government to account for the way it spends public money. It is independent of government and the civil service. The Comptroller and Auditor General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads the NAO. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether government is delivering value for money on behalf of the public, concluding on whether resources have been used efficiently, effectively and with economy. The NAO identifies ways that government can make better use of public money to improve people's lives. It measures this impact annually. In 2018 the NAO's work led to a positive financial impact through reduced costs, improved service delivery, or other benefits to citizens, of £539 million.
NAO Press Office
+44 (0)20 7798 7400 or email firstname.lastname@example.org
Latest News from
National Audit Office Press Releases
The adult social care market in England26/03/2021 11:15:00
Short-term funding and the lack of a long-term vision has hampered planning, innovation and investment in adult social care.
Investigation into government funding to charities during the COVID-19 pandemic24/03/2021 12:05:00
This report from the National Audit Office (NAO) finds that as at 19 February 2021, the Department for Digital, Culture, Media and Sport (the Department) had disbursed £454 million of £494 million it made available to support charities during the COVID-19 pandemic. It did so through seven schemes and a network of nearly 200 partners, and intends to award and disburse funding until 31 March 2021.
Public Service Pensions19/03/2021 12:15:00
Today’s report from the National Audit Office (NAO) finds that government’s reforms to public service pensions have helped contain the rise in future costs to the taxpayer. However, the government could do more to consider how pensions can help recruit and retain staff.
Support for children’s education during the early stages of the Covid-19 pandemic18/03/2021 11:15:00
The Department for Education (the Department) took action to support schools and pupils in response to COVID-19, including ensuring that schools remained open for vulnerable children and funding online resources for those learning at home.
Timeliness of local auditor reporting on local government in England, 202016/03/2021 11:25:00
The National Audit Office (NAO) today reports that less than half of local councils, local police and local fire bodies’ 2019-20 audits were completed by the revised deadline of 30 November 2020, despite this having been pushed back to take account of the impact of the COVID-19 pandemic.
Investigation into the Culture Recovery Fund15/03/2021 11:15:00
In July 2020, the Department for Digital, Culture, Media & Sport announced its £1.57 billion Culture Recovery Fund to help the UK’s cultural, arts and heritage institutions survive the pandemic.
Local government finance in the pandemic10/03/2021 11:25:00
Today’s report from the National Audit Office (NAO) finds that while effective action from government has assisted local authorities in surviving financially during the COVID-19 pandemic, many authorities face significant funding gaps and the financial outlook for the sector is concerning.
Reducing carbon emissions from cars01/03/2021 11:15:00
The government has set an ambitious target for almost all cars to emit zero carbon by 2050.
Environmental tax measures15/02/2021 11:15:00
The recent (12 February 2021) report from the National Audit Office (NAO) has found that HM Treasury and HM Revenue & Customs (the exchequer departments) have a limited understanding of how far the tax system supports government’s environmental objectives.