Ministry of Defence has no 'credible plan' to fund UK's Armed Forces, MPs warn

8 March 2024, 08:39 | Updated: 8 March 2024, 08:59

The Ministry of Defence lacks a 'credible plan' to fund the Armed Forces
The Ministry of Defence lacks a 'credible plan' to fund the Armed Forces. Picture: Alamy

By Emma Soteriou

The Ministry of Defence (MoD) is lacking a "credible plan" to fund the Armed Forces, MPs have warned.

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The gap between the MoD's budget and the cost of the UK's desired military capabilities has increased to £16.9 billion.

It is the largest deficit on record, despite an expected injection of £46.3 billion over the next 10 years.

The real deficit could even reach almost £30 billion, the Public Accounts Committee (PAC) warned, as some parts of the Armed Forces only included affordable capabilities as opposed to 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."

Labour said the report was "more proof" that the Tories had failed to "deal with the deep problems in the MoD".

It comes after Chancellor Jeremy Hunt announced in his Budget on Wednesday that there would be no real increase in defence spending, despite having received a formal request from Defence Secretary Grant Shapps.

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Speaking on LBC's Nick Ferrari at Breakfast, Treasure minister Gareth Davies said: "We have record funding going into our defence sector, we uplifted defence spending by £11 billion in the last spring budget and I think there’s about £50 billion being spent this year.

"The nature of conflict has changed and so it means money is spent in different ways, particularly on new technology."

He added: "The fact is that we are meeting, if not improving on, the 2 per cent target at Nato.

"We have ambition to move to 2.5 per cent…but we can only do so when it’s responsible to do so and we have the money in place available."

Nick Ferrari quizzes Treasury minister Gareth Davies on defence spending

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".

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.

"With the support of its allies, the UK's armed forces continue to fulfil a crucial international role," MPs said.

"However, many of its allies are facing similar challenges to the UK, which might affect their ability and willingness to continue providing extensive support."

It follows warnings from the EU that it will halt ammunition and weapon exports to the UK if war breaks out with Russia.

Watch Again: Nick Ferrari is joined by Treasury minister Gareth Davies | 08/03/24

The report also accused the MoD of dodging "major decisions" about cancelling procurement programmes it cannot afford.

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."

John Healey, Labour's shadow defence secretary, said: "Conservative ministers might talk a good game on defence but this report is more proof of their failure to deal with the deep problems in the MoD.

"Ministers have lost control of the defence budget, failed to fix the 'broken' defence procurement system and wasted billions of pounds of public money.

"With war in the Europe and conflict in the Middle East, ministers risk leaving our armed forces without the equipment they need to fight and fulfil our Nato obligations.

"Labour has a plan to defend Britain better. In government, we will establish a new military strategic headquarters and appoint a national armaments director to make sure our forces are ready to fight and defend Britain."

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