Defence Equipment Plan

Ministry of Defence written statement – made on 27th February 2020.

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Photo of Ben Wallace Ben Wallace The Secretary of State for Defence

I am pleased to place in the Library of the House the 2019 financial summary of the Defence Equipment Plan, which sets out our plans to deliver the equipment needed by our Armed Forces to defend the country and protect our national interest.

The threat to the UK and our interests is intensifying and diversifying. As we set out in the Modernising Defence Programme, we need to modernise to keep pace with these threats. The forthcoming Integrated Security, Defence & Foreign Policy Review will provide us with the opportunity to re-visit our equipment plans to make sure that we are spending the Defence budget on the right capabilities to keep our country safe in the decades ahead. This will inescapably bring some difficult choices.

We will need to create the financial headroom in our Equipment Plan to harness emerging technologies and develop the battle-winning capabilities of tomorrow. We know that to get this right, we must accelerate our work to mobilise, modernise and transform so that we deliver more effectively and efficiently over the long term. Reviewing our acquisition process will be an important part of this work.

Whilst there is clearly work still to do, the Department has made encouraging progress in improving financial management, including in the Equipment Plan. We have balanced the budget for equipment in the 2019/20 financial year and refined our assessment of the financial shortfall in our plans for the next decade, which has reduced from £7 billion to £2.9 billion, or 1.6% of our equipment budget.

We take seriously the recommendations of the 2018 Public Accounts Committee inquiry into the Equipment Plan and in April 2019 reported the actions we are taking in response. These include revisions to this report to include further analysis of changes to the affordability of the Plan and provide further background information to individual projects.

The Government remains committed to meeting the NATO target of spending at least 2% of GDP on defence and at least 20% of that spending will be on equipment. During 2018/19, the Government committed £1.6 billion additional spending for Defence and a further £2.2 billion was committed in Spending Round 2019. The detailed implications of this most recent settlement on the Equipment Plan are being reviewed and will be reported in due course.

The Department is alert to the financial challenges rooted in previous SDSRs that were over ambitious and underfunded. That is why the Prime Minister granted a £2.2 billion uplift at the last Spending Review and it is why the Integrated Defence, Security and Foreign Policy Review will be vital in ensuring the Department’s plans are put on a stable footing.