Core Equipment Programme

Oral Answers to Questions — Defence – in the House of Commons at 2:30 pm on 25th February 2013.

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Photo of Phil Wilson Phil Wilson Opposition Assistant Whip (Commons) 2:30 pm, 25th February 2013

What plans he has for the future of the core equipment programme.

Photo of Philip Hammond Philip Hammond The Secretary of State for Defence

Having established the core equipment programme in planning round 12, as I announced on 14 May 2012, we are now concentrating on delivering that core programme. We will, however, continue to keep under review candidate projects for inclusion in the core programme in the future, bearing in mind that we have £8 billion of uncommitted headroom in the programme. However, before we include any further projects, we will need to be satisfied, first, of the capability need and, secondly, that we have sufficient room within the budget to see projects through to completion and sustain them in operation. Thirdly, decisions will be required to meet proposed in-service dates.

Photo of Phil Wilson Phil Wilson Opposition Assistant Whip (Commons)

The National Audit Office has identified a £12.5 billion black hole in the Department’s equipment plan. Will the Secretary of State say how he will fill that black hole?

Photo of Philip Hammond Philip Hammond The Secretary of State for Defence

We have done this one before. As I explained to Mr Murphy, the £12.5 billion quoted by the NAO is a CAAS figure, based on its assessment of early summer 2012. In October, CAAS reported that it had downgraded its assessment of the contingency requirement to £4.4 billion, which is rather less than we have allocated in the budget.

Photo of Peter Luff Peter Luff Conservative, Mid Worcestershire

This is my opportunity not to ask a question on the defence equipment programme that I believed I would have to ask for a fourth time at Defence questions, but instead to congratulate my right hon. Friend on the programme’s publication. What has been the reaction from industry and elsewhere to the welcome detailed information in the equipment plan, and to its clean bill of health from the NAO?

Photo of Philip Hammond Philip Hammond The Secretary of State for Defence

I am grateful to my hon. Friend, who is an aficionado of NAO reports. Anybody who reads NAO reports regularly will recognise that, in context, the report was supportive and favourable. However, it does not make us complacent—we still have a great deal of work to do. I can tell him that the response from industry has been favourable. I chaired a meeting of the defence suppliers forum the week before last, which commented favourably on the report and the guidance it gives in directing its investment in future capability.

Photo of Alison Seabeck Alison Seabeck Shadow Minister (Defence)

In a written answer on 11 February to my hon. Friend Mr Cunningham, the Under-Secretary of State for Defence, Mr Dunne, who has responsibility for defence equipment, said:

“This Government will not blindly pursue projects, ignoring new information about defence equipment acquisitions.”—[Hansard, 11 February 2013; Vol. 558, c. 442W.]

That is obviously vital in core programmes, but the Defence Committee report on defence acquisition suggested that that was exactly what the Government have done. It concluded that decisions were

“rushed and based upon incomplete and inaccurate policy development…and…without the MoD understanding how the change could be implemented.”

Was the Committee wrong to question the Government’s competence?

Photo of Philip Hammond Philip Hammond The Secretary of State for Defence

The reference that the hon. Lady cites is specifically to decisions made in 2010. We have received the Committee’s report, we are studying it very carefully and we will publish our response in due course.