Drift at the MoD: Defence plan delays undermine UK credibility with allies and industry, says new PAC report

- Public Accounts Committee publishes report on Ministry of Defence's 2024-25 accounts:

   - Awaits improvements to troubled Ajax programme in hope rather than expectation

   - Unacceptable £6bn muddle in MoD accounting with ever-increasing nuclear spend 

The government's delay in publishing the Defence Investment Plan (DIP) has undermined the UK government's credibility with its allies, and its ability to provide a stronger deterrent to its adversaries. In a report into the Ministry of Defence's 2024-25 accounts, the Public Accounts Committee (PAC) warns that the long delay to the DIP risks squandering the opportunities provided by advances in technology, hindering the government's attempts to modernise the Armed Forces.

It has been three years since the Ministry of Defence (MoD) published its Equipment Plan for 2023-2033, in which the PAC then found no credible plan to deliver the military capabilities government wanted. Since then, the PAC expressed extreme disappointment last year at the continued lack of a plan setting out how the government would invest the funding increases set out by the high-level ambitions in the Strategic Defence Review.

The delay to the DIP, the PAC's report finds, has been due to the lack of a decision from the MoD as to which capabilities, infrastructure and people it requires to transform the Armed Forces to be warfighting-ready within the available budget. It is also due to its failure to secure the cross-government agreement the DIP needs.

The PAC's report lays out the impacts of the delay to the DIP, which include:

• An inability to provide a stronger deterrent to the UK's adversaries;
• A need now for the UK to recover credibility with its allies;
• An inability to equip the UK's Armed Forces for the modern battlefield;
• Undermined credibility for the MoD with the defence sector;
• Additional cost pressures on the defence budget; and
• An adverse impact on industry, particularly for smaller companies.

Time is money in procurement, and the PAC notes suppliers are now increasing their prices to take account of the international situation's continued deterioration. The MoD must demonstrate the flexible use of the DIP to take account of the changing international context in decision-making on expenditure and capabilities. With the delay also risking having weakened the UK's defence industrial base, the PAC is seeking action from the MoD to mitigate impacts of this delay on suppliers.

The PAC's report further finds that the MoD is placing unrealistic expectations on how soldiers can safely operate the Ajax armoured vehicle. Ajax has unresolved noise and vibration issues, with 33 soldiers reporting symptoms after operating them. Five soldiers were still under medical review when the MoD appeared before the PAC in March 2026, at which time the MoD claimed Ajax is safe when operated and maintained correctly within its design parameters.

The MoD now expects soldiers to do maintenance checks every time they stop the Ajax vehicle. This seems unreasonable, given soldiers may need to use vehicles for long periods in combat, and the PAC is calling on the MoD to explain how the current required operating parameters and restrictions for Ajax are realistic and appropriate.

With an Ajax 2 package of upgrades now in development at an unknown cost, the PAC awaits to see, more in hope than expectation, whether these endeavours will succeed. The MoD must now set out precisely how much it will pay for Ajax, and why it still expects that it can be made fit for purpose.

Turning to the MoD's ever-increasing nuclear expenditure, which made up 18% (£10.9bn) of the defence budget in 2024-25 (expected to rise to up to 25% in coming years), the PAC understands that a proper mechanism will now be set up to address a state of affairs under which public information about nuclear programmes is too sensitive for Parliament to properly scrutinise them. This enhanced Parliamentary scrutiny, long called for by the PAC, must not be delayed by current political uncertainty, and the MoD must now set out how and when it will routinely provide Parliament with more detailed cost and performance information for the nuclear enterprise.

The MoD's accounts further show a completely unacceptable failure to maintain accounting records to support £6bn+ of assets. The accounts do not provide a true and fair representation of the MoD's financial position, due to a misclassification of historic expenditure by the Atomic Weapons Establishment as spending that had resulted in it developing infrastructure. The report recommends MoD set out how it will prevent this happening again.

The PAC has long scrutinised the issue of recruitment and retention in the Armed Forces, and the latest public statistics for the year to October 2025 point to a corner being turned, with the number of people now joining up exceeding those leaving. The MoD does not, however, know whether these improvements are as a result of its own efforts or if it can sustain them, and the PAC's report makes recommendations targeted at helping it do so.

Sir Geoffrey Clifton-Brown MP, Chair of the Public Accounts Committee, said: “Much commentary has been expended recently on the months-long delay to the DIP. However, from this Committee's point of view, the nation has now in fact gone years without a credible plan for UK military capability. Those responsible may argue there are good reasons for the DIP's continuing absence, but our report makes clear that excuses to the effect of ‘taking the time to get the details right' simply do not cut it. Whatever the content of the DIP when it eventually does appear, the damage from its absence has been done – to the nation's credibility, to its safety, to its Armed Forces, and to certainty within its entire defence industrial base.

“Any government minister attempting to explain away this delay to the DIP should instead ask themselves what message the bureaucratic drift of the past months has given to the public, as well as the UK's allies and its adversaries, and simply apologise. Whatever else the government hopes to achieve with the DIP, it has certainly gained the unwelcome honour of being the most anticipated document in my entire political career. As we still await its publication at time of writing, I know I speak for the defence interests of the whole UK when I say - this had better be good.

“Our Committee sadly must also add a chapter to the troubled history of the Ajax programme with this report. Our thoughts are with all those soldiers who reported symptoms from noise and vibration after operating these vehicles, and we were frankly astounded to hear officials explain that proper use of Ajax requires maintenance checks every time it is stopped. This is frankly an insult to intelligence, and much good may this advice do our fighting men and women if called upon to operate Ajax in combat. The MoD must now explain how it will make Ajax fit for purpose, and how much this will cost.

“Finally, given the ratchet effect of ever-increasing while opaque nuclear spending, about which both my and predecessor Committees have long warned, and in the context of a completely unacceptable £6bn accounting muddle around the Atomic Weapons Establishment, a new sensitive scrutiny mechanism is to be welcomed. Political uncertainty must not derail these arrangements, in order that the public may gain greater confidence that their money is being spent wisely.”

PAC report conclusions

The continuing lack of a deliverable long-term Defence Investment Plan is seriously undermining the Department's efforts to modernise the Armed Forces and achieve value for money for the taxpayer. It has been three years since the Department published its Equipment Plan for 2023–2033. Since then, it has announced it will replace the Equipment Plan with a more holistic Defence Investment Plan and has undertaken the first zero-based review of its budgets for 18 years. However, the new Plan remains unpublished because the Department has not yet decided which capabilities, infrastructure and people it requires to transform the Armed Forces to be warfighting-ready within the budget available. Nor has it secured the cross-government agreement that the Plan needs. It has therefore been unable to move quickly and assuredly to provide a stronger deterrent to our adversaries and to equip our Armed Forces for the modern battlefield. But time is money in procurement, and suppliers are increasing their prices to take account of the international situation's continued deterioration. The Department is now dealing with the consequences of wars in both Ukraine and the Middle East, conflicts which demonstrate that the modern battlefield has changed enormously over the last four years.

Recommendation 1.   Once the Department has published the Defence Investment Plan, it should write to the Committee within three months setting out how it will use the Plan flexibly to take account of the changing international context when making ongoing decisions about expenditure and capabilities.

It is completely unacceptable that the Department failed to maintain accounting records to support more than £6 billion of assets included in its 2024-25 Annual Report and Accounts. The Comptroller and Auditor General concluded that the Department's 2024-25 accounts did not provide a true and fair representation of its financial position. This was because the Department had misclassified historic expenditure by the Atomic Weapons Establishment (AWE), some of which dated back to 2007, as spending that had resulted in it developing infrastructure. The issue arose because the Department did not accurately reflect the costs of AWE's asset management programmes on its own balance sheet. About 85% of the overstatement was due to early-stage feasibility work being capitalised, and the Department is likely to write off some of those costs. The Department has identified control weaknesses in its processes which it needed to put right. However, the Department's repeated emphasis on the complexity and scale of its spending only highlights the importance of it having effective controls and processes in place across all its activities, which it tests regularly to ensure they continue to fulfil their purpose.

Recommendation 2. The Department should set out:

1. a) What additional checks and processes it has put in place so that the Accounting Officer was assured that all balances reported in the 2025-26 financial statements presented to the National Audit Office for audit were supported by appropriate accounting records and complied with accounting policies.
2. b) How it will ensure that its checks and assurance processes continue to work as intended in future years.
3. c) In writing to the Committee, how much of the costs it has written off, as soon as it has agreed the amount.

The Department is not currently providing Parliament with sufficient transparency over its ever-increasing nuclear expenditure. In 2024-25, the Department spent 18% (£10.9 billion) of the defence budget on the Defence Nuclear Enterprise (DNE), a figure expected to rise to 20% for 2025-26, once its accounts have been finalised. The Department expects this will increase further to up to 25% in coming years. Nine DNE programmes have whole-life costs of more than £10 billion. The Department claims that the cost of Dreadnought, which is due to enter service in the early 2030s, currently remains within its £41 billion budget (including a £10 billion contingency). However, published information about other DNE programmes is too vague to allow Parliament to understand and challenge the range of activities they cover, what their costs are and how these have changed over time. The 2025 Strategic Defence Review identified this gap in scrutiny and recommended that Government should develop mechanisms for enhanced Parliamentary scrutiny to provide confidence that taxpayer money is being spent wisely. We understand that the Government has now agreed that a proper scrutiny mechanism will be set up. We call on the Government not to allow the current political uncertainty to delay this is essential parliamentary scrutiny.

Recommendation 3. The Ministry of Defence must set out how and when it will routinely provide Parliament with more detailed cost and performance information for the nuclear enterprise, so that Parliament can provide taxpayers with the confidence that the increasing DNE budget is being spent wisely.

The Department's delay in publishing the Defence Investment Plan risks weakening the UK's defence industrial base. The Department currently spends 85% of its budget in the UK, a proportion that it hopes to maintain or expand as defence spending increases. This amount of spending means that the Department can be an important element of the UK's wider industrial strategy. If done right, the Department could provide a considerable stimulus for growth into the UK economy, including investment in infrastructure and skilled jobs throughout the country. The goal is not just to service the domestic market, but also to benefit from the expanding export market for defence equipment. The UK's ongoing support for Ukraine underlines the UK defence industry's potential for swift action and technological innovation, particularly amongst small and medium-sized enterprises. The Defence Investment Plan was intended to provide the UK's defence industry with certainty and give a clear demand signal, thereby encouraging businesses to invest long-term in their capacity and capabilities. Its ongoing absence undermines these aims, with smaller companies suffering more than their larger counterparts.

Recommendation 4. The Department should write to the Committee urgently, within two weeks of this report, to explain how it is mitigating the impact on suppliers of the delayed publication of its investment plan.

The Department is placing unrealistic expectations on how soldiers operate Ajax vehicles safely when it has still not resolved the underlying noise and vibration issues. In November 2025 Exercise TITAN STORM was stopped when 33 soldiers reported symptoms from noise and vibration after operating in Ajax armoured vehicles. Five soldiers were still under medical review when the Department appeared before the Committee in March 2026. The Department claimed that Ajax is safe when operated and maintained correctly within its design parameters but did not explain clearly how this exercise had exceeded those limitations. The Department now expects soldiers to do maintenance checks every time they stop the vehicle, but that seems unreasonable, particularly as soldiers may need to use vehicles for long periods in combat. The need for our soldiers to develop and maintain the skills they require to operate on armoured vehicles is clear, but those vehicles must be fit for purpose. The Department is developing an ‘Ajax 2' package of upgrades, including composite rubber tracks and automatic track tensioners. These are intended to make Ajax a more comfortable ride for its crew and to improve the lived experience of our soldiers. The Department did not tell us the likely costs of these upgrades and we wait to see, more in hope than in expectation, whether these endeavours will succeed.

Recommendation 5. The Department should:

1. a) Explain why it believes the current required operating parameters and restrictions for Ajax vehicles are realistic and appropriate, given the nature of the tasks those vehicles and their crews are expected to undertake both in training and on the battlefield.
2. b) Provide a detailed memorandum which sets out precisely how much the Department will pay for Ajax. The memorandum should also include details of:

• How much the manufacturer will pay for the delays in delivering a vehicle that is fit for purpose;
• The cost of modifications, including the ‘Ajax 2' enhancements, needed to bring the vehicles up to that standard, including how much of the additional cost the manufacturer will bear; and
• Why the Department still expects that Ajax can be made fit for purpose.

The Department does not know whether a recent improvement in recruitment and retention is a result of changes it has made, or whether it can sustain these improved trends. After many difficult years for both recruitment and retention, the latest public statistics for the year to October 2025 point to a corner being turned, with the number of people joining the Armed Forces exceeding the number leaving. The average time between someone applying to join and them starting basic training reduced from 496 in 2023 to 290 days in 2024, and from August 2025 to March 2026 50,816 applicants had received a provisional decision within 10 days of applying and 19,428 had received a date for starting training within 30 days. Faster processing of applications has been helped by the introduction of a new electronic system for doctors to provide a candidate's medical records, and initiatives such as the new direct entry cyber pathway indicate the Department's willingness to try new approaches to recruitment. Initiatives to help retention include a new housing strategy, wraparound childcare and improved pay. The Department has not, however, analysed the cause and effect of its initiatives, despite being keen to understand which measures are having what effects. This insight would help the Department ensure that it can attract people with the skillsets the Armed Forces need into a military career.

Recommendation 6. The Department should:

1. a) Develop robust evidence about what factors affect the inflow and outflow of Armed Forces personnel and ensure that it closely monitors these factors.
2. b) Identify which initiatives to improve recruitment and retention are particularly cost-effective and ensure that these are applied more widely.