UK made GBP1 billion in emergency procurement funding cuts over past year

UK defence chiefs ordered a GBP1 billion (USD1.4 billion) round of emergency spending cuts to stay within its budget in the financial year up to the end of March, according to the annual report into the country’s military procurement plans by the National Audit Office (NAO).

The spending watchdog reported in a 12 January press release that its best estimate of the UK Ministry of Defence’s (MoD’s) procurement budget shortfall out to 2030 had risen to GBP7.3 billion, up by GBP2.9 billion from the previous year. Its worst-case estimate of underfunding was GBP17.4 billion.

A defence spending uplift of GBP16.5 billion announced by UK Prime Minister Boris Johnson in November 2020 is not due to kick in until the 2021–22 financial year, says the NAO, with the MoD still allocating the new money to specific programmes. Before the uplift, the NAO said the ministry’s Equipment Plan was projected to cost GBP198 billion out to 2030 to fund the purchase of new hardware and to cover logistic and maintenance support.

For the first time in eight years the MoD did not publish an annual Equipment Plan document and instead provided only an Excel spreadsheet of budget tables, citing the proximity of the UK government’s Integrated Security, Defence and Foreign Policy Review, which is expected to be published in February. In a letter dated 12 January to the chair of the UK parliament’s Public Accounts Committee, member of parliament Meg Hillier, Permanent Secretary Stephen Lovegrove, the MoD’s chief civilian official, said, “By the end of the financial year [on 31 March], we expect to have developed a new and affordable set of spending plans enabled by the Spending Review settlement.