Public Expenditure

Defence written question – answered on 12th November 2010.

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Photo of David Mowat David Mowat Conservative, Warrington South

To ask the Secretary of State for Defence

(1) what his Department's capital expenditure per head was in (a) London and (b) the North West in each of the last five years;

(2) how much and what proportion of his Department's capital expenditure was allocated to (a) London and (b) the North West in each of the last five financial years.

Photo of Liam Fox Liam Fox The Secretary of State for Defence

We do not have sufficiently complete data to make a calculation based on the Ministry of Defence's entire capital departmental expenditure limit, our usual measure of capital expenditure. The MOD's equipment expenditure does, however, account for much of the MOD's capital departmental expenditure limit.

We have, therefore, made per capita estimates of the MOD's equipment expenditure by Government office region for the five financial years up to and including 2007-08 as follows:

£ per capita equipment expenditure
Financial year London( 1) north-west( 2)
2003-04 50 275
2004-05 38 246
2005-06 36 234
2006-07 32 272
2007-08 36 247
(1) The figures quoted are in near cash at current prices and include non-recoverable VAT but exclude indirect expenditure such as on subcontracted work.

(2) The per capita calculation is based on MOD contract expenditure on equipment. This includes expenditure on research and development, manufacture and maintenance, including fighting equipment and communications. Information on the location of the primary work activity on each contract has been used to estimate this expenditure by Government office region.

We have made estimates of our capital expenditure by Government office region for the five financial years up to and including 2007-08 as follows:

£ million expenditure Proportion of near cash capital expenditure( 2) (percentage)
Financial year (a)London (b) North-west (a) London (b) North-west
2003-04 370 1,871 6.3 31.7
2004-05 278 1,678 4.3 25.7
2005-06 271 1,599 4.0 23.4
2006-07 241 1,861 3.3 25.9
2007-08 274 1,697 3.5 21.4
(1) Near cash at current prices including non-recoverable VAT. The figures exclude indirect expenditure such as on subcontracted work.

(2) We define capital expenditure as the MOD's capital departmental expenditure limit which includes investment in equipment and infrastructure that has a life over more than one financial year (e.g. ships, buildings and aircraft).

We stopped making estimates of regional direct expenditure after 2007-08 as they do not directly support our policy-making or military operations and are time consuming to compile. We do, however, continue to assess the employment effects of MOD decisions on individual defence projects and defence establishments.

The MOD does not allocate funding on a regional basis. The industrial and economic implications of investment decisions are one factor among many in our decision-making processes, which are driven predominantly by the need to meet military requirements in a cost-effective manner, regardless of where items are procured or MOD personnel located.

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