MoD must tackle £14.8bn black hole in decade-long spending plan now, say MPs

The Ministry of Defence (MoD) must act now to tackle a black hole of up to £14.8bn in its financial plan for the next decade, according to MPs.

Public Accounts Committee chair Meg Hillier slammed the department today for “failing taxpayers”, urging it to “bring some much-needed clarity to its priorities and costs”.

Read more: BAE Systems sells off majority stake in UK military vehicle arm to German firm

Last year, the committee found the MoD’s spending plan for 2018-2028 had an “affordability gap” of £7bn, which could easily widen to £14.8bn if is forced to pay further contingency cost estimates.

Despite committing to tackle the problem, the department has made “little progress,” the PAC said today in its report. It has continued to “delay the difficult decisions needed to make the Equipment Plan affordable,” it said.

The MoD plans to spend £193.3bn over the next 10 years, but it only has a budget of £186.4bn. Spending includes the development of the Dreadnought nuclear submarines, the future successor to the Trident military deterrent.

The department’s “inability to provide certainty” on its spending plans risks reducing confidence among its suppliers, it added. The MoD’s top suppliers include defence contracting giants BAE Systems and Babcock.

Hillier said: “In terms of poor financial planning, the MoD is a repeat offender. The department’s progress with addressing the concerns set out in our last report on the Defence Equipment Plan has been woeful.

“The MoD simply cannot afford everything it says it needs and it is not acceptable for officials to continue deferring decisions that have a bearing on its current affordability gap and longer-term risks.

Read more: Defence outsourcing giant Babcock's chairman to step down after decade in charge

“A department that is unwilling or unable to take the action required to help it live within its means is failing taxpayers, who rightly expect dovernment to deliver the best possible value for their money.

“We urge the MoD to act on our recommendations now, work with the Treasury to ensure its funding and planning models are fit for purpose, and bring some much-needed clarity to its priorities and costs.”