The Ministry of Defence’s Equipment Plan is funded from the Department’s overall budget, and makes up more than 40% of its planned spend. Since 2012, the Department has published an annual Statement on the affordability of its 10-year Equipment Plan (the Plan). At the request of the Secretary of State, we report on the robustness of the assumptions underlying the Statement and provide commentary to Parliament on the Plan.
Our report on last year’s Plan (2016 to 2026) concluded that the risks to the affordability of the Ministry of Defence’s Equipment Plan were greater than at any point since reporting began in 2012. We set out that the risk of cost growth was evident in the Plan, both in existing projects and also because a greater proportion of large projects are at an early stage of development. The Department also faced a significant potential threat to affordability as a result of exchange rate movements against the pound.
In our report on the Equipment Plan 2017 to 2027 we will look at costings within the Plan, the funding for the Plan, and we will also set out our observations on the affordability of the Plan.