Ministry Of Defence Annual Report And Accounts 2008 09

This publication sets out the annual report and accounts of the Ministry of Defence for the year 2008-09, including a summary of performance against the Public Service Agreement (PSA) objectives and targets. The second volume of the report contains the consolidated departmental resource accounts for 2008-08 and annexes9

Response to HC 52 (ISBN 9780215544063)

Government response to HC 214, session 2008-09 (ISBN 9780215529374). The MoD annual report & accounts 2007-08 published as HC 850-I,II, session 2007-08 (ISBN 9780102955095)

This report examines the administration, expenditure, activities and achievements of the MoD during the 2008-09 financial year, as detailed in the Ministry of Defence annual report and accounts 2008-09 (ISBN 9780102962239). It continues a series of inquiries and, indeed, the Committee sees it as cause for concern that the NAO found the need to qualify the MoD's resource accounts for the third consecutive year. Whilst it is acknowledged that capability in theatre must be the Department's first concern, failing to maintain accurate and full information on personnel and to keep track of assets has the potential to threaten the long-term capability of the Department, including operational capability.

For the sixth successive year, the Ministry of Defence Accounts were qualified. The Qualifications covered non-compliance with international reporting standards on the treatment of some contracts; lack of audit evidence on the valuation of inventory (worth some £3 billion) and of capital spares (worth some £7 billion); and on the regularity of the Accounts because of the failure to obtain approval for the remuneration package of the Chief of Defence Materiel. The MoD was also five months late in submitting its audited accounts to Parliament. The National Audit Office had found errors in its sample examination of accruals and so the MoD decided to resolve these problems before submitting the accounts. The MoD said they did not have the necessary expertise to manage the financial complexity that featured in the implementation of the Strategic Defence and Security Review so sought assistance. The MoD should ensure its people have the right skills to deal with all financial problems so that they do not need to bring in expensive external accountants. There is also concern about the MoD's reluctance to estimate the full costs of its operations in Afghanistan, Iraq and Libya. The NAO did not consider that the MoD has adequate information, especially with respect to recording the cost of its activities and outputs, to run its business effectively. The MoD should set out its commitment to improving its management information. It is also vital that defence spending remains at more than 2 per cent of GDP in line with the UK's NATO commitment.

This Report examines the administration, expenditure, activities and achievements of the MoD during the 2007-08 financial year, as described by the Ministry of Defence (MoD) in its most recent annual report and accounts (HC 850-I,II, session 2007-08, ISBN 9780102955095). The implementation and operation of the Joint Personnel Administration programme (JPA) has so far revealed very considerable failings. The lack of sufficient financial controls led the Comptroller and Auditor General to qualify the MoD's Resource Accounts for 2007-08. The scope of these failings is significant and impacts upon several areas critical to service personnel satisfaction with life in the Armed Forces. The Committee is disappointed that the MoD has failed to gauge accurately its likely performance against targets in the years preceding this year's Annual Report and Accounts, particularly with regard to its readiness targets. It is also concerned about the over-optimism that allowed the MoD to believe that it had some chance to meet targets that, in the end, it entirely failed to meet. Its forecasting of performance has been poor and must improve. The Committee also express reservations about the transparency of the MoD's targets in the 2004 Spending Round reporting period, and about the clarity with which the MoD reported against them. The terminology used in reporting was ambiguous and could equally cover near-success and close to abject failure, and the level of subjectivity in assessing performance against some targets was very considerable indeed. There is particular concern about performance against readiness targets, which has shown no improvement this year, with little chance of significant improvement for years to come.

This report analyses the Annual Report and Accounts 2006-07 of the Ministry of Defence (MoD) (published as HC 697, session 2006-07, ISBN 9780102946369). The MoD's assessment of its expected achievements against its six Public Service Agreement (PSA) targets, which run until the end of March 2008, has deteriorated since the previous year's Annual Report and Accounts. At the end of 2007, the MoD did not expect to meet the target relating to generating forces and expects "only partly" to meet targets relating to recruitment and retention, and defence equipment procurement. The failure to meet the target for generating forces is a consequence of the continuing high levels of deployment of the Armed Forces. The Committee is concerned that the Armed Forces have been operating at or above the level of concurrent operations they are resourced and structured to deliver for seven of the last eight years, and for every year since 2002. Achieving manning balance in all three Service continues to be a challenge. Shortages remain within many specialist trades in all three Armed Services, but especially in the Army Medical Service. The report notes the failure to meet harmony guidelines in the Army and the Royal Air Force - another indicator of the pressure on the Armed Forces from the continuing high level of operations - and another target missed by all three services is for ethnic minority recruitment. The MoD continues to experience substantial forecast cost increases on equipment programmes, and the report notes delays in delivering equipment programmes to the planned in-service dates. The MoD faces difficult choices in the face of expected cuts in the defence programme and the management of a streamlining exercise to reduce civilian posts in the headquarters.

This publication sets out the annual report and accounts of the Ministry of Defence for the year 2008-09, including a summary of performance against the Public Service Agreement (PSA) objectives and targets. The second volume of the report contains the consolidated departmental resource accounts for 2008-08 and annexes9