Defence Equipment and Major Projects

Thursday 22nd October 2015 Written Statements

[The Minister for Defence Procurement (Mr Philip Dunne)]

I am pleased to place in the Library of the House the annual publication of the defence equipment plan. Building on the progress outlined in the previous three equipment plans, we again have a stable and realistic programme of work that sets out a strong foundation on which to shape the future construct of the Armed Forces in the forthcoming Strategic Defence and Security Review (SDSR).

We continue to plan for the future with confidence. The summer budget announcement outlined the Government’s commitment to grow the defence budget by 0.5% above inflation. This will enable us to fulfil the commitment to grow the equipment budget by 1% above inflation year on year and to invest more than £160 billion on defence equipment and support over the next 10 years. The equipment plan sets out our plan, pre-SDSR, to spend £166 billion on capabilities the Armed Forces need over the 10 year planning period out to 2024-25.

The equipment plan is being published in parallel with the NAO’s independent assessment into both the equipment plan and also 17 of the MOD’s largest projects known as the major projects report. I welcome the NAO’s view that there are indications that the equipment plan will remain affordable for the rest of the Parliament if financial stability is maintained. Supporting this, the major project report saw a fall in the reported cost of the projects for the second consecutive year. There are still improvements to be made in the ways that defence procures and supports equipment, which the Defence Equipment and Support transformation programme and the establishment of the single source regulations office are seeking to address, but it is reassuring that the NAO acknowledge the continued progress we have been making.

Throughout annual budget cycle 2015 the focus was on ensuring the continued stability of the equipment plan, and ensuring that the levels of capability and financial risk were balanced. The equipment plan demonstrates that we achieved this, giving a stable baseline as we enter the spending review and SDSR.

[HCWS264]