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...Request free trial
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. 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.”
Notes to editors The House of Commons will hold a debate on Wednesday 25th June at approx. 3pm on the Ministry of Defence's (MoD) spending plans, led by the PAC Chair and members of the Committee. Find out more on the Committee's website.
PAC report conclusions and recommendations The UK has been at the forefront of the international response in providing support for Ukraine since the Russian invasion. The Ministry of Defence (the Department) has led the government's support for Ukraine, providing military equipment and training for the Armed Forces of Ukraine (AFU) in coordination with other countries. Taskforce Kindred, a team working for the Chief of the Defence Staff, manages the response to requests from the AFU and works with Defence Equipment & Support to source the required equipment. Through Taskforce Hirst, UK and Ukrainian industry are working together to design, build and support innovative and adaptable equipment. The UK, Germany and Ukraine now lead the Ukraine defence contact group, which works with more than 40 allies to coordinate responses to Ukrainian requests for equipment and oversee delivery. This is supported by around a dozen capability coalitions, led by different nations, which work to supply Ukraine's immediate needs and develop future capabilities for it. The UK and Norway lead on maritime capabilities and other coalitions lead on drones, artillery, cyber and IT. The UK is also working with allies to satisfy the operational requirements of any future peacekeeping operations in Ukraine. Recommendation 1. The Department should ensure that its future work with Ukraine remains responsive and efficient so that it continues to provide Ukraine with the support it needs. Lessons learned from supporting Ukraine have made the Department examine its own decision-making and procurement processes, finding some of them in need of improvement. The Department has learned several lessons from its support for Ukraine. These include: the need for a mixture of high-end capabilities, such as Storm Shadow long-range cruise missiles, and affordable high-mass equipment, such as drones; the importance of augmenting crewed capabilities, such as helicopters, with uncrewed autonomous collaborative platforms; the advantages of having fewer systems for easier logistics management; and having the industrial ability and capacity to sustain equipment if supply chains are disrupted. The Department has responded to these lessons by splitting its procurement of military equipment into three segments: big strategic programmes to provide long-term platforms, such as submarines, ships and aeroplanes; programmes for developing capabilities used on the platforms; and the rapid development and deployment of inexpensive, innovative capabilities. The Department also recognises it must reassess what financial and operational risk it is willing to tolerate, because a higher risk appetite allows it to deliver equipment quicker. In addition, the Department has learned that the pace of innovation means equipment can become outdated quickly, so it must adapt to ending programmes sooner and disposing of equipment which no longer meets requirements. Recommendation 2. The Department should update the Committee by the end of June 2026 on what further improvements to how it operates it has identified from its support for Ukraine, and how it will implement them. The Department's defence reform programme sets out ambitious plans for improving defence procurement, but it is unclear how long it will take for these benefits to become fully embedded. In April 2025 the Department reorganised itself into four areas – the Department of State, a Military Strategic Headquarters, a National Armaments Director (NAD) Group and Defence Nuclear. The Department anticipates that the NAD will have significantly more control over the end-to-end acquisition process than the old structure provided. The Department is building on reforms begun under the previous government to speed up procurement: it aspires to reduce by two-thirds the time to award a contract to a two-year maximum, and to complete most programmes in under five years. The Department anticipates it can achieve this by involving industry in the process much earlier and reducing the overspecification of requirements. Instead of the Department developing a firm requirement then going to industry, it will state what the military capability problem is, and the NAD Group will seek solutions from industry. The Department expects this approach will increase defence exports, as industry will be able to design products that also work for the expanding international market. However, 2025-26 is a transitional year, and the new approach will take several years to reduce average times, primarily owing to legacy programmes which had started before April 2025. Recommendation 3. The Department should provide the Committee with an evidence-based update by the end of June 2026 which demonstrates how defence procurement has improved in the first year that the National Armaments Director Group has operated, including key performance indicators. The Strategic Defence Review (the SDR) has set out the government's high-level policy and capability ambitions, but the Department will need to complete further work to prioritise what it must do to achieve them. The government launched the SDR in July 2024 and published it on 2 June 2025, five weeks after our evidence session with the Department. The Department said that the SDR would try to balance ambition and resource, chart the direction needed to respond to the current geopolitical situation and ensure that the UK has the armed forces it needs, both now and for the future. The Department stressed that its existing equipment programme was already ambitious – including renewing the nuclear warhead, spending £40 billion on new equipment for the Army, and investing in a sixth-generation fighter – and that the SDR would build upon and develop this. As confirmed in the Spending Review on 11 June, the government has announced that it will increase defence spending to 2.5% of gross domestic product from April 2027, but the Department is only midway through the process of deciding how to invest the additional funding. Now that the SDR has been published the Department will have to work through the detailed capability choices, and it does not expect to have completed this process until the latter part of 2025 – two years since this Committee was last able to scrutinise the Department's spending plans. Recommendation 4. The Department should provide the Committee with:
We are extremely disappointed that the Permanent Secretary did not have concrete suggestions for how the Department will provide Parliament with annual reporting on its plans. The Department last published a full Equipment Plan in November 2022. Since July 2023, it has written to both this and the previous Public Accounts Committee several times with excuses for why it has not produced any subsequent Equipment Plan reports, and it has questioned whether that format was best suited to explaining its future investment and support plans. The recent SDR says that the Department will develop a new 'Defence Investment Plan' to supersede the Equipment Plan, but provides no details. We held this inquiry in the sincere hope that by its end we would have heard clear proposals from the Department as to how this Committee, and by extension Parliament, will be able to scrutinise annually the crucial issue of its forward spending plans. The Department acknowledged that it works better with scrutiny from this Committee and the Defence Committee and told us that Ministers were clear that they wanted the Department to be more transparent than previously. However, the Department did not propose how it might present its plans to Parliament and could not give us a date for when it might be able to do so. These answers were entirely unsatisfactory. Recommendation 5. During Parliament's September 2025 sitting the Department must provide the Committee with a fully worked out proposal for how it will update Parliament each year about its equipment procurement and support plans. The Department should include in its proposal how it will:
The ever-increasing cost of the Defence Nuclear Enterprise (the DNE) is likely to add pressure on the Department's overall budgets.In 2024-25 the nuclear budget was £10.9 billion, around 18% of the whole defence budget (unchanged as a percentage from 2023-24 figures). The Department has sought to ensure that it manages the DNE budget effectively and efficiently, and is exploring opportunities to include more British small and medium-sized enterprises in its supply chain. However, costs are rising through a combination of the Department trying to speed up the work schedule and adding new programmes to it, and inflation. In consequence, forecast costs for the DNE for the ten years beginning 2023-24 have increased by around £10 billion from £117.8 billion (to approximately £128billion). Yet in 2023, the DNE's ten-year costs were already £7.9 billion more than budget. The government has created a ringfence which prevents the Department from using elsewhere money allocated to the DNE, but which allows money to flow the other way. The Department has not yet worked through the implications of the SDR on the balance of investment between the DNE and conventional capabilities. However, increasing nuclear costs may restrict the money available for conventional equipment and other important requirements, such as improving poor accommodation which is crucial in addressing the military's recruitment and retention problems. Recommendation 6. The Department's annual update to Parliament on the DNE should provide details of its planned costs, including:
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