Damning report exposing £17billion UK defence deficit paves way for radical overhaul

A damning report from a powerful Commons committee into defence finances paves the way to a major defence review and radical overhaul of how the MoD and forces run their business – whoever wins this year’s general election.

Friday’s report from the Public Accounts Committee reveals a £16.9 billion deficit in equipment plans at the Ministry of Defence. According to some sources, this could mean the ten year programme for acquisition, currently set at £288.6 billion could face a £69 billion shortfall on present projects and orders.

A huge amount is devoted to acquisition of the nuclear deterrent, the missiles, launch facilities and submarines. The report fears that budgets for conventional equipment will be raided to make up the deficit on the nuclear programmes.

“It’s very depressing,” Dame Meg Hillier the veteran Labour Chair of the PAC said on Thursday night. “Two years ago when we reported, the Defence Secretary said that the MoD would get things in order. They haven’t and the deficit is worse.”

“Only two of 46  MoD equipment projects that are included in the Government Major Projects Portfolio are rated as being highly likely to time, budget, and quality,” states the report. “Successful delivery appears to be unachievable for five GMPP projects, including communications technology, nuclear submarine reactors, and missiles.”

Weaknesses are exposed in supply chains for Ukraine, the acquisition of artillery shells especially, the need to rely on allies for major capabilities like the aircraft carriers and the persistent deficit in recruiting. More are still leaving all the major armed services than are joining.

“Recruiting is difficult across the board, including the civil service,” Meg Hillier explained to the Standard. “A lot needs to be done to attract twenty year olds and to attract veterans back into the services – the RAF has had some success in this.”

There is dismay that Jeremy Hunt, the Chancellor, gave only the briefest mention to defence in his budget speech – with little recognition of the demands on British military efforts with the worsening situation in Ukraine and outright conflict with the Houthis in the protection of shipping in the Red Sea.

John Healey, the Shadow Defence Secretary, has said: “Ministers have lost control of the defence budget and failed to fix the broken defence procurement system, and wasted billions of pounds of public money.”

Labour is now expected to launch immediately a full security, strategy and review and fundamentally overhaul procurement.