MoD: MPs warn government lacks "credible plan" to fund Royal Navy, Army and RAF while dodging major decisions

The gap between the MoD’s budget and the cost of the UK’s desired military capabilities has ballooned to £16.9bn, its largest deficit ever, despite an injection of £46.3bn over the next 10 years. But the influential Public Accounts Committee (PAC) has warned that the real deficit could be closer to £29 billion as some parts of the armed forces only included capabilities that were affordable rather than all those the Government had requested.

Dame Meg Hillier, chairwoman of the cross-party PAC, said: “In an increasingly volatile world, the Ministry of Defence’s lack of a credible plan to deliver fully funded military capability as desired by Government leaves us in an alarming place.” In a report on the MoD’s Equipment Plan published on Friday, the PAC warned that gaps in military capabilities had left the UK more reliant on its allies to protect its own interests, while the credibility of Britain’s armed forces had been “undermined”.

The MPs pointed to “widely reported” recruitment issues, with more people leaving the armed forces than being recruited, and the mothballing of Royal Navy vessels due to crew shortages. Portsmouth-based Type 23 frigate, HMS Westminster, is set to be decommissioned due to a lack of sailors. Rumours circulated in the national press that the aircraft carrier HMS Prince of Wales could be sold to offset the funding shortfall.

In January, ministers had to deny reports that assault ships HMS Albion and HMS Bulwark would be mothballed ahead of their planned retirement dates in the mid-2030s due to a lack of available crew. The MPs said: “With the support of its allies, the UK’s armed forces continue to fulfil a crucial international role. However, many of its allies are facing similar challenges to the UK, which might affect their ability and willingness to continue providing extensive support.”

The PAC urged the Government to develop plans to mitigate the impact on the UK of the risk that allied support might be curtailed or withdrawn. MPs also renewed their criticism of the MoD’s procurement processes, saying that slow delivery of new systems had caused gaps in military capability. Only two of the MoD’s 46 equipment programmes are currently rated as highly likely to be delivered to time, budget and quality, while successful delivery seems unachievable for five projects including nuclear submarine reactors, new communications technology and missiles.

The report accused the MoD of dodging “major decisions” about cancelling procurement programmes it cannot afford, relying too much on an assumption that defence spending will rise to 2.5 per cent, in line with the Government’s long-term ambition. It also highlighted that the decision to prioritise the Defence Nuclear Enterprise, which manages the UK’s nuclear deterrent, had increased the deficit and risked further squeezing budgets for conventional forces.

Dame Meg said: “This problem is not new. Year-on-year our committee has seen budget overruns and delays in defence procurement. A lack of discipline in the MoD’s budgeting and approach has led to an inconsistent plan that just isn’t a reliable overview of the equipment programme’s affordability. We’re disappointed that not only are the same problems we’re used to seeing on display here, but they also appear to be getting worse. Despite a budget increase, this year’s plan shows a clear deterioration in affordability. The MoD must get to a better grip, or it won’t be able to deliver the military capabilities our country needs.”

Chancellor Jeremy Hunt announced in his budget yesterday that the government would only increase defence spending to the desired 2.5 per cent of GDP "as soon as economic conditions allow.” He added that the UK is leading the way in financially supporting Ukraine amid the ongoing war with Russia.