UK NAO refuses to back MoD affordable budget claims

The UK National Audit Office (NAO) has rebuffed claims by UK Defence Secretary Philip Hammond that the country's GBP159 billion (USD251 billion) equipment procurement budget is "affordable".

The spending watchdog's assessment of the Ministry of Defence's (MoD's) 10-year Defence Equipment Plan reveals uncertainty over the level of long-term funding for defence. It also questions the accuracy of the MoD's cost-growth projections, stating: "The cost of the procurement projects in the Equipment Procurement Plan has been understated by GBP12.5 billion (15.7%)".

Hammond made the commitment to publish a 'balanced budget report' in May 2012, saying the NAO "will review the equipment plan and confirm that it is affordable."

Pointedly, the NAO's own report has refused to confirm the affordability of Hammond's plans, saying it would "inevitably change over time as economic and operational priorities evolve and as short-term affordability or urgent requirements cause the Department to flex its plans. For this reason, this report does not, and future reports will not, offer a definitive view on the affordability of the Equipment Plan."

NAO assessors said they had set up monitoring processes to assess the ministry's performance but "some time must elapse before performance against these matrices can be properly assessed."