There are still concerns over whether the MoD's Equipment Plan is affordable. The Ministry underspent by a huge Ap1.2 billion on the Equipment Plan in 2012-13. Yet it has no idea whether this is because of genuine savings or whether costs are simply being stored up for later years because of delays on projects. This underspending makes it tempting for the Treasury to take them as savings at the expense of the defence equipment capabilities our armed services need. The MoD also does not properly understand the costs of maintenance and technical support, despite the fact that such support costs, Ap87 billion over ten years, and accounts for over half of the spend on the Equipment Plan budget. It also does not know whether its contingency of Ap4.7 billion is a sufficient buffer against risks to the Plan. The affordability of the Equipment Plan is heavily reliant on achieving significant savings in some of its major programmes. For example, the MoD has assumed savings of over Ap2 billion in two large programmes, the Complex Weapons and Submarine Enterprise Performance Programmes, but achieving these will be a challenge. Any changes to these two programmes could jeopardise the expected savings and so put affordability at risk. Project teams do not yet have enough staff with the right skills to employ proper cost and risk management techniques. Treasury and Cabinet Office should look across Government at skills shortages and go for solutions that do not require bureaucratic reorganisations to recruit skilled people at market rates.The Department told us it needs greater flexibility in order to recruit better people than is possible under the current constraints of civil service pay scales, particularly at a senior level. It told us that it frequently loses its best people to industry who can pay them more to do similar jobs. ... the rest of the department and the civil service.22 Formal Minutes Wednesday 7 May 2014 Members present: Mr Richard.
|Title||:||HC 1060 - The Ministry of Defence Rquipment Plan 2013-23 and Major Projects Report 2013|
|Author||:||Great Britain: Parliament: House of Commons: Committee of Public Accounts, Margaret Hodge|
|Publisher||:||The Stationery Office - 2014-05-13|