Defence savings needed to plug £7bn black hole

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The Ministry of Defence is estimated to spend over £193bn on equipment projects, including developing four new Trident nuclear submarines

The Ministry of Defence must find savings to plug a £7bn hole in the armed forces equipment budget, the National Audit Office has warned.

The spending regulator said the MoD's current forecast for spending over the next 10 years remained "unaffordable".

Estimates say projects, including four new Trident nuclear submarines, will cost the UK more than £193bn by 2028.

The MoD said it has received a £1.8bn boost, and it is making £9.5bn of efficiency savings.

In its report, the National Audit Office (NAO) said "urgent action was needed" to plug the black hole in funding.

It said: "The MoD currently estimates the plan - which includes the development of four new submarines to carry the UK's Trident nuclear deterrent - will cost £193.3bn against a budget of £186.4bn, a shortfall of £7bn."

Commons Public Accounts Committee chairwoman Meg Hillier said the MoD "needs to be clear about what equipment they will or will not be funding."


Jonathan Beale, defence correspondent

The NAO has been warning the MoD that its equipment programme is "unaffordable". But for the first time, the Ministry of Defence itself now acknowledges that there's a gap in its budget of at least £7bn.

The NAO says that could easily double over the next 10 years unless urgent action is taken. It says that means deciding as soon as possible which equipment programmes should be delayed or even scrapped. The chairwoman of the Commons Public Accounts Committee, Meg Hillier, also warns that the extra £1bn for defence announced in last week's Budget won't be enough to plug the gap.

The Labour MP says the MoD - which has still to complete a long awaited defence review - is in real danger of wasting taxpayers' money through short-term decisions.

Auditor general Sir Amyas Morse said the defence department's 10-year equipment plan "shows that the MoD has a clearer understanding of the affordability that it faces", but added that action was required "urgently".

An MoD spokesman said the department strived "to ensure our military have the very best ships, aircraft and vehicles through our £186bn plan".

He added the Treasury has guaranteed an extra £1bn to boost the UK's defences in Chancellor Philip Hammond's most recent budget.

This is alongside an £800m increase given to the government department in the summer.

In June the Commons Defence Committee said the UK needed to increase the defence budget by £20bn to maintain influence with Washington and Nato allies.

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