Ministry Of Defence Supplementary Estimate 2011 12

The MoD sought, in the Estimate, a net increase in Capital and Resource Expenditure (Departmental Expenditure Limits-DELs) of £2,804 million which generated an additional cash requirement of £644 million. It also sought a reduction in Annually Managed Expenditure of some £1,063 million. The Committee welcomes the MoD's efforts to improve the management of assets and stock. They recognise that such exercises and the implementation of the Strategic Defence Security Review are likely to result in significant write-offs, but we would expect the MoD to have a greater understanding of the financial implications of these write-offs and, therefore, greater certainty of the non-cash costs by the time the Main Estimates and the Supplementary Estimates for 2012-13 are prepared. They recommend that, if the way expenditure is classified is changed in future, the MoD should provide a comparison of expenditure on a like-for-like basis between years within its memorandum on the Supplementary Estimates and should also provide full details of the items and amounts affected and the reasons for the changes. In general, while the Committee has no argument with the content of the MoD's Supplementary Estimate, it is unreasonable to expect Committees and Parliament to scrutinise the Supplementary Estimates in less than three weeks. More time is needed to consider the Supplementary Estimate, the associated memorandum and the MoD's responses to questions on the Estimate.

The Ministry of Defence (MoD) must put into the public domain the full cost of military operations in Afghanistan. This report notes that although there are obvious standing expenses, the Afghan deployment brings with it additional costs in terms of training opportunities cancelled or deferred and equipment wear and tear that will eventually have to be met. The Committee is also disappointed by the Department's inability to provide the detailed information requested about expected write-offs such as Nimrod and the Type 22 Frigate. The MoD was not clear but the Committee deduce that some of the 2010-11 provision for depreciation and write-offs will be carried forward to 2011-12 or even later years. There is also concern that the voluntary redundancy programme has been over-subscribed and that applications (or even resignations) have been received from individuals who might have achieved high command and asks the MoD to show how it will ensure that the voluntary redundancy process does not impact on the future leadership capability and effectiveness of the Armed Services

The MoD is requesting net resources of some £39.8 billion and capital expenditure of some £10 billion for 2012-13. Within the total requested the MoD has asked from some £3.6 billion to cover the costs of operations, some 18 percent less than 1011-12. Resource expenditure is also planned to fall in line with the Spending Review 2010. The Committee recommends, along with other requests and general recommendations, that the Main Estimate for the MoD is approved by Parliament and have indentified no issues which require a debate before it does so

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.

In this report the Defence Committee says the information published so far by the Scottish Government on the defence and security implications of Scottish independence falls far short of requirements. The Committee also cannot currently judge the likely running costs of the proposed Scottish defence force, given the limited information it has so far received. The Committee is, however, unconvinced that the proposed budget of £2.5bn can support both the proposed Scottish defence force and the purchase of new equipment including fast jets and submarines. The report seeks answers to the following questions: how would a sovereign Scottish Government ensure the defence and security of an independent Scotland? For what purposes would Scottish armed forces be used? How would Scottish armed forces be structured and trained, and where would they be based? How much would it cost to equip, support and train an independent Scotland's armed forces and how much of this could be procured and delivered domestically? And how many jobs in the defence sector would be placed at risk? The Committee also raises detailed questions about the proposed Scottish defence force: the numbers and types of aircraft and naval vessels which would be needed and how they would be procured and maintained; the numbers of combat troops the Scottish Government envisages (including its plan to re-instate historic Scottish regiments); and the availability of training facilities to maintain the appropriate professional standards. In the event of independence, the defence industry in Scotland would face a difficult future.

A series of Ofsted inspections on Army Apprenticeships conducted in 2013 rated the overall effectiveness as good. This was an improvement over the last inspection in 2009, rated as satisfactory (now called 'requires improvement'). Some 28 per cent of Army recruits were less than 18 years of age. Further information is needed on why the Army is so dependent on recruiting personnel under the age of 18 years compared to the other two Services, and whether steps are being taken to reduce this dependency. Of those recruited in 2012, 3.5 per cent of the Army were rated at entry level 2 for literacy (that of a 7 to 8 year old) and 39 per cent had a literacy level of an eleven year old. If as the MoD states, it has to recruit personnel at whatever level of attainment is available, then it should boost remedial action when recruitment entry standards are particularly low. In light of changes brought about by Future Force 2020, it may be that recruiting personnel with higher levels of attainment would better meet the future needs of the Armed Forces. Whilst the Committee recognises that some recruits may not be eager to take further academic exams, the MoD should encourage more recruits to undertake English and Maths GCSEs which would stand them in good stead for future employment. The MoD has carried out some useful pilot projects with paramedic training and should identify more potential projects to ensure that vital skills paid for by the MoD are not lost to the country

On cover and title page: House, committees of the whole House, general committees and select committees. On title page: Returns to orders of the House of Commons dated 14 May 2013 (the Chairman of Ways and Means)

The Committee's report focuses on the planned withdrawal of combat troops at the end of 2014 and the transfer of responsibility for security to the Afghan National Security Forces. It also examines the progress towards a secure and stable Afghanistan within the wider region, including Pakistan, and the plans by the UK, NATO and other allies for a smooth transition of responsibility for security to the Afghan Government and the ANSF. Securing the future of Afghanistan requires the concerted efforts of all the Afghan people; regional neighbours, in particular Pakistan; the USA; NATO and other coalition partners. In the process of establishing a peaceful and functioning Afghanistan, the Committee calls for evidence of: (i) At least the start of an Afghan-led peace settlement with the insurgency; (ii) Open and free elections; (iii) An appropriately trained and equipped ANSF with continuing financial support; (iii) A strong judicial system which protects the human rights of all Afghans; (iv) Economic development aid to continue in support of the well being and safety of all sections of society; (v) Effective measures to tackle corruption, drug production and the drug trade. The MoD needs to work with international partners and the ANSF to identify ways of meeting significant gaps in necessary capabilities such as helicopters and close air support and medical care from 2015. The Defence Committee concludes that at the end of UK operations the best the UK will be able to do is to withdraw in good order and engage with external partners to improve Afghanistan's future prospects.