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The Defence Equipment Plan 2017

01/31/2018

I am pleased to lay before Parliament this year’s financial summary of the Defence Equipment Plan. This is the sixth consecutive annual publication of the equipment plan summary, and demonstrates MOD’s investment and the need to continue progress in driving improvements, reform and efficiency, with a plan to spend £180bn on equipment and support over the decade out to 2026-27 which will provide our Armed Forces with the capability they need. 

The Government remains committed to the Defence Budget increasing by 0.5% above inflation each year and the Department is focussing on where best to invest across the entire Defence programme in order to remain on top of an ever changing and increasing threat environment. 

However, it was evident following the 2016 annual planning cycle that both uncertainty and risk had increased in the Equipment Plan. Consequently, the Equipment Plan emerging from [Annual Budget Cycle 2017, or ABC17] contains a high level of financial risk and an imbalance between cost and budget. 

In addition to the underlying imbalance, the key risks at the end of ABC17 were the immaturity of the costs for the Type 31e frigate and the nuclear programme, and the demanding efficiency targets the Department is aiming to deliver from the equipment programme through the transformation of DE&S, more demanding approaches to contracting and the Single Source Contract Regulations. 

In addition, there are potential cost pressures related to the change in the value of sterling. It is though worthy of note that the difference between the aggregate project team cost estimates and the independent estimates carried out by the Cost Assurance and Analysis Service has fallen again, indicating an improvement in project team estimating. 

These risks have informed the Department’s work on the National Security Capability Review, and associated work in the 2018 Annual Budget Cycle. The Department recently launched the Modernising Defence Programme. We aim to use this work to deliver better military capability and value for money in a sustainable and affordable way, and to ensure that defence capabilities complement other national security capabilities in the most effective way. 

We have also continued our efforts to improve the organisation and internal processes that deliver the equipment plan. April 2016 saw the formation of the Director General Nuclear to oversee the Defence nuclear enterprise and further benefits are anticipated from the standing up of the Submarine Delivery Agency in April 2017. We remain closely involved in the cross-government work on industrial strategy to ensure that the Department benefits from this initiative. 

(signed) 

Guto Bebb, MP 
Minister for Defence Procurement 

 

 

Read The Full Report

Date: 
01/31/2018
Sources of Information: 

UK Ministry of Defence

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