Defence scrutiny obstructed: PAC extremely disappointed at lack of public spending plan

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The public still lacks a reliable assessment of whether government’s defence spending plans are affordable. In a new report, the Public Accounts Committee (PAC) voices its extreme disappointment that the Ministry of Defence (MoD) continues to fail to facilitate parliamentary scrutiny of how it intends to manage its funding for military equipment - historically carried out through an annual Equipment Plan, which unacceptably MoD has now refused to publish since November ’22. Its report also lays out the lessons learned from the MoD’s support for Ukraine, of which it can be rightfully proud.

The government’s Strategic Defence Review (SDR) set out high-level ambitions, including an increase in defence spending to 2.5% of GDP from April ’27. But MoD is only midway through the process of deciding how to invest this funding, and has said that the SDR would build upon its already ambitious equipment programme. MoD doesn’t expect to have completed working through the details following the SDR until late ’25 – two years since the PAC was last able to scrutinise MoD’s spending plans. Its last report on MoD’s Equipment Plan found no credible government plan to deliver on desired military capabilities.

The PAC’s latest inquiry was held in the sincere hope that government would propose how Parliament and the public would again be able to scrutinise the crucial issue of MoD’s forward spending plans. No concrete plans, or a date for when one might be presented, were forthcoming.

The PAC finds this entirely unsatisfactory – MoD must come forward quickly with proposal on how it will update Parliament on its equipment procurement and support plans. As part of the SDR, the government committed to producing a Defence Investment Plan to replace the Equipment Plan in future, due for completion in Autumn 2025. It is yet to be made clear how the new Plan will be reported to Parliament and the underpinning data provided for scrutiny to the National Audit Office, thus allowing detailed and proper scrutiny by committees including the PAC.

The report also lays out several lessons MoD has learned from its support for Ukraine, including the need for mixture of capabilities from high-end missiles to affordable drones; the advantages of having fewer systems for easier logistics management; having the industrial capacity to sustain equipment if supply chains are disrupted; and ending programmes with outdated equipment sooner to keep up with the pace of innovation. MoD’s future work with Ukraine should remain responsive and efficient, so that it continues to provide Ukraine with the support it needs.

The ever-increasing cost of the nuclear deterrent is also highlighted in the report, with the PAC finding that rising nuclear costs may restrict the money available for conventional equipment and improving poor accommodation – crucial in addressing problems in recruitment and retention. Forecast nuclear costs for the ten years beginning 23-24 have increased by around £10bn to £128bn, yet in 2023 ten-year costs were already £7.9bn more than budget. The report notes that the government has created a ringfence which prevents MoD from using elsewhere money allocated to nuclear, but which does allow money to flow the other way. The implications of the SDR on the balance of investment between nuclear and conventional capabilities have also not yet been worked through by government.

Chair comment

Sir Geoffrey Clifton-Brown MP, Chair of the Committee, said: “The MoD’s Equipment Plan is the window that Parliament and the country has to hold government to account on the deliverability of its military ambitions. Despite an inquiry held in good faith with government in the hope that together we might facilitate parliamentary scrutiny, that window remains tightly shut. We are left with vague assurances of further details to be made clear in the autumn. Scrutiny does not take place on the government’s timetable, but as the proper functioning of our democracy, and a critical analysis of our nation’s defence plans has been denied for two years now.

“In the context of continuing geopolitical uncertainty, this continued delay in providing figures for public scrutiny is a truly unacceptable state of affairs. This Committee has made a number of recommendations to government to offer it another chance to cooperate. There is also a material risk of the costs of the nuclear deterrent beginning to act as a ratchet mechanism. As well as a fully worked-up picture of equipment overall, we require specific cost details in the specific area of nuclear, to be assured on the risk of funding not being sucked away from other vital areas earmarked for growth in the SDR.

“If government does not come forward with the requisite details very soon, Parliament will be unable to critically assess the underpinnings of the SDR, and it will remain to be seen how the public can thereby ascertain whether what is planned, including the pledge of 2.5% of GDP on defence spending, is deliverable. This all must be set in context of the SDR, announced since our report, which sets out a highly ambitious target for upgrading our defence equipment.

“The MoD can, however, be rightfully proud of the role it has played in supporting Ukraine in resisting Russia’s brutal invasion. The adaptability and responsiveness of government in constantly innovating both in the assistance provided and in its own processes has been truly commendable, and this Committee thanks all involved for their continuing efforts.”

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