Defence Supplementary Estimate 2021-22 — House of Commons, 2022-03-09
Topic: Mixed Topics
Peter Grant (Scottish National Party, Centre-left): The hon. Member makes an important point, and she reminds us that if accommodation is lying empty, it should not matter which Department or public body has its name on the title deeds; houses are there for people to live in, so whether they are evacuees and refugees from Afghanistan or anyone else, it should be possible to give them the kind of accommodation they want I will go through some of the findings of the NAO report, "The Equipment Plan 2021 to 2031". I think it is dishonest to state as a matter of fact that the equipment plan is affordable, because in order for it to be affordable, as the NAO report states in paragraph 2.7, £3 billion of financial risk was not included. For example, a future combat air system had an estimated cost in its business case up to 2031 of between £10 billion and £17 billion. The equipment plan allocates £8.65 billion, so that one project alone is, at best, underfunded by £1.35 billion, and at worst it has possibly been allocated barely half the money it will cost Paragraph 2.17 refers to £7 billion of what the MOD terms "Planned Cost Reductions"—I think this is what the right hon. Member for Warley was referring to. At the time, according to that report, the top-level budget holders had plans to deliver less than half of the £3.1 billion. Some £2.6 billion of it needed to be achieved by 2025, within the first four years, and the first of those first four years is up in three weeks’ time. As the right hon. Member mentioned, the MOD has a dismal track record, assuming it will make massive savings all over the place and delivering very little of it. It cannot afford to get it wrong this time, but I think we all know that the chances of it getting it right and delivering that £7 billion, if its past record is anything to go by, are very slight. It is yet another hole in the affordability of the equipment plan Paragraph 20 of the NAO report picked up on an issue that the MOD does not like us to talk about but that I think is very important. It states that the top-level budget holders were "deliberately spending more slowly on projects to keep within their budgets" In other words, they were given a budget to have something delivered and ready to use in 10 years’ time, but they spend the budget in 10 years and then the equipment is not ready until after 12, 13 or 14 years. There can be unforeseeable delays in the procurement of defence equipment, but if the MOD has assessed that the military will need that equipment in 2031, and then someone in the MOD deliberately delays procuring it for any amount of time, simply to make it look as if they are sticking to the budget, I do not see how that can possibly be acceptable Elsewhere, the NAO estimated that about £12 billion of savings built into the equipment plan were not savings at all, but were based on spending the money after the period of the equipment plan. They were based on delaying getting this vital equipment to our service personnel. An independent assessment carried out by the MOD’s cost assurance and analysis service, looking at projects that make up about 58% of the current year’s plan—although clearly there will be bigger expenditure on some of them later—reckoned that those projects alone were likely to cost £7.6 billion more than was assumed in the make-up of the defence equipment plan. It goes on and on. The NAO’s conclusion in paragraph 23 is that "There is a real risk that, despite the additional funding it has received, the Department’s ambition outstrips the resources available to it." In layperson’s language, despite the MOD saying it has an affordable equipment plan, there is a very real risk that it does not Finally, the affordability of the equipment plan depends on getting an inflation plus 0.5% budget increase every year up to 2031. The Treasury has said it is comfortable with that, but given what has happened recently to public finances, the cost of living and inflation, I question whether it is still realistic to assume that is guaranteed. It is possible that it will be delivered; if it is not, that is yet another hole in the affordability of that plan. I make no apology for saying that where the equipment plan says that it is affordable and does not put all those caveats against it, it is a dishonest document for anyone to have published. It makes statements that are patently not justified, even by the information that was made available to Members of Parliament and, indeed, members of the public We can argue about whatever amount of money is allocated to the Ministry of Defence in this year’s budget or next year’s, or in any year coming, but we are failing our service personnel. The Government, this Parliament and the MOD are failing our service personnel, first because they are not being open and honest with them about the financial challenges they continue to face, but most importantly because surely, when somebody signs up and is willing to put their life on the line—let us not forget that two young men from Glenrothes lost their life fighting an illegal war in Iraq, and would probably be here today if they had had the best possible equipment available—the very least they are entitled to is living accommodation that is fit for human habitation, and to be given the best possible equipment available to defend themselves from enemy attack. I do not have confidence that this Government, or any future Government in this place, will genuinely honour those commitments That is why, whatever budget is set for the MOD through the due process, there needs to be a complete root-and-branch review of financial management—far too often, financial mismanagement—within the Ministry of Defence. It is costing billions and billions of pounds that the MOD simply cannot afford to waste, and there will be times when it risks costing the lives of our service personnel.