14 Jan 2015

MOD publishes annual Equipment Plan update

Summary: The MOD has published its third annual update to the Defence Equipment Plan, securing £163bn of funds for defence equipment over the next ten years.

The Equipment Plan is the Department’s forecast budget to cover the costs of procurement and support of military equipment for the next 10 years.

For the period 2014 to 2024, the equipment budget is £163 billion, made up of £69bn procurement budget and £81bn support budgets, with a central contingency reserve of £4.6 billion.

The spending breaks down as £68.9bn for new equipment, including around £40 billion on submarines, £15.4 billion on land equipment such as tanks and armoured vehicles, and around £11.1 billion on helicopter capabilities.

There is also £16bn earmarked for support arrangements for this new equipment. This is an increase on last year’s figure of £14.8bn, reflecting the increased spend on the procurement of new equipment.

In addition, there is an unallocated budget of £9.2 billion that the Department has not yet committed to specific programmes, meaning big opportunities still to come in the coming years.

The report has been scrutinised by the National Audit Office to provide an overview of the feasibility of the spending plans for the next decade.

Amyas Morse, head of the National Audit Office, said: “Our work on the Equipment Plan reveals a number of positive features, not least the relative stability of forecast project costs and control over in-year variations in approved timings and costs of major projects. The Ministry of Defence has, however, chosen a higher risk approach to managing the affordability of the equipment plan by relying on over-optimistic forecasts of costs and future savings, not all of which might be achievable in reality. The Department will need to be watchful and swift to react if costs start to grow.”