Sort your spending habits out, UK Ministry of Defence told over £20bn black hole

Public Accounts Committee recommends department chains its wallet shut

Britain's Ministry of Defence's spending plans for the next decade "lack cost control" and contain a £20bn black hole, according to the House of Commons' influential Public Accounts Committee (PAC).

The committee's latest report into the MoD's finances follows years of public concern as a largely static or shrinking defence budget is filled to bursting with ever bigger spending plans and a need to replace ageing military equipment.

"The Department is reluctant to present openly an assessment of the affordability gap and has failed to report transparently to Parliament and the public about the financial risks it faces," sniffed the report's summary.

The MoD said the part of its equipment spending plan which gave it the biggest heebie-jeebies were the Dreadnought and Astute nuclear submarine programmes (both have nuclear reactors to power them; one carries nuclear missiles, the other sinks Her Majesty's maritime enemies). Costs for the two submarine classes, as the report noted, "have increased... by £941m since the 2016 plan". The total budgeted spend on the Dreadnought boats is £31bn over their planned 30-year lifetime.

The department also caught a significant amount of flak, in the report, for not accounting for the proposed Type 31e frigates for the Royal Navy anywhere in its spending plans, in spite of actual work on the ships and their design having been carried out over the past few years.

Fears that defence over-spending could lead to severe problems has been an ongoing concern for a few years, amid the completion of the two Queen Elizabeth-class aircraft carriers and the drip-feed purchase of F-35B fighter jets to fly off them. The report highlighted this, stating: "Beyond the Equipment Plan there is a wider transparency gap, highlighted particularly by the lack of cost information available on F-35 Lightning fighter aircraft."

The MoD gives out as little information as possible about the F-35B programme other than puff-piece press releases boasting how wonderful it is, to the point where informed observers looking for hard information tend to go looking straight to the USA, whose government does simple and transparency-enhancing things like publishing auditors' reports along with enough information to derive costings that directly affect the UK.

This all comes during a mini-defence review, the Modernising Defence Programme, which is supposed to at least try and balance the budget.

While the PAC report gave the MoD a kicking for being "reliant on ever increasing and optimistic savings targets", it did grudgingly note the department says it has saved £7.9bn so far from a declared cost reduction target of £16bn. In spite of that, the committee remains "sceptical that it can achieve the remaining £8.1bn by 2027".

Just to hammer home the point on Britain's purchase of the most expensive fighter aircraft of all time, it explicitly added: "This should include reporting of progress against cost reductions for F-35B aircraft, including sustainment costs." ®

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