MoD Equipment Plan Questioned By PAC

May 15, 2014

The Public Accounts Committee (PAC) has released a report that queries how the Ministry of Defence (MoD) handled its Equipment Plan 2013-23.

The plan, which sets outs out how the equipment needed by armed forces in the coming years will be delivered and supported, has a budget of £164bn.

PAC’s Major Projects Report reports that of this total budget, £63bn was allocated to equipment procurement, £87bn to equipment support, £4.7bn to contingency - leaving £8.4bn unallocated.

According to the Committee, MoD underspent by £1.2bn in 2012-13 but cannot explain why this is the case.

“The MoD has made some progress this year in controlling costs on its major projects and managing the way it procures equipment,” claimed Margaret Hodge, PAC Chair.

“However, we still have concerns over whether the MoD’s Equipment Plan is affordable.

“There are some big uncertainties. The Ministry underspent by a huge £1.2bn on the Equipment Plan in 2012-13, yet it has no idea whether this is because of genuine savings or whether costs are simply being stored up for later years because of delays on projects,” Hodge added.

Lack Of Understanding Leads To Problems

The PAC Chair also suggested that the MoD does not truly understand the costs of maintenance and technical support, despite this accounting for over half of spend on the Plan.

“The MoD urgently needs to address the shortage of skills across its critical functions. It told us that it needed to be able to pay more to attract and retain people with specialist skills,” claimed Hodge.

“At the moment, it is spending £400m a year on technical support from consultants,” she added.

The PAC report recommends that the Ministry should establish processes to improve its data at project level.

It can do this by covering project progress and spending against forecast to understand the principal causes of any under or overspend, the Committee said.




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