The Ministry of Defence (MOD) is facing significant scrutiny after a report by the Public Accounts Committee (PAC) revealed a substantial shortfall in funding for the UK’s military capabilities.
According to the report, there is a £16.9 billion deficit between the MOD’s budget and the required funding for desired military capabilities, despite a £46.3 billion increase in the Equipment Plan budget.
This marks the largest gap since the MOD began publishing these plans in 2012 and represents a significant deterioration from the previous year’s financial situation, which was already deemed unrealistic by the committee.
The report criticises the MOD for not including the costs of all capabilities expected by the government in its budget calculations, only accounting for those it can afford. This oversight is exemplified by the Army potentially needing an additional £12 billion to fund the government’s full list of capabilities.
The PAC accuses the MOD of lacking the necessary discipline to balance its budget and make tough decisions on which equipment programmes to prioritise.
Repeated issues with defence procurement, including delays and budget overruns, have been highlighted by the PAC in past reports. This year’s findings continue to point out these failings, emphasising the need for the MOD to take firmer control of its procurement processes.
The committee has also called for improvements in the transparency and effectiveness of future Equipment Plans to enable better parliamentary scrutiny. It expresses concern over the inability to fully scrutinise spending in certain sensitive areas of defence due to security reasons, suggesting a need for a solution to allow effective oversight across all areas of defence spending and delivery.
In response to the Department’s statement in the House on 28 February 2024 regarding Acquisition Reform and the proposed new Integrated Procurement Model (IPM), the PAC has not yet formed an opinion but encourages future committees to consider the impact of these reforms on the MOD Equipment Plan.
Thanks for leaving the country in the hands of our enemies.
The PAC is basically telling the MOD that it has to cut at least £17 bn from the equipment budget or make cuts elsewhere. And it believes that in practice there also a lot of hidden costs uncounted for which will require more cuts. The sheer scale of the required cuts are breath-taking, e.g. cancelling the last three T26 frigates might “save” £3bn, cancelling the Challenger 3 tank programme perhaps £1 bn. Obviously these salami slices aren’t sufficient, whilst having a devastating effect on overall defence capabilities and industry. It will need something really big to go such as the Tempest fighter (saving up to £12 bn over next decade) or the AUKUS submarine (at least £5 bn over next decade).
What the PAC is missing is the fact that since early 2022 the MOD has been expecting and even promised (e.g. by Truss) a major real increase in its budget. Of course that has turned out to be “jam tomorrow”, with this weeks budget not throwing even a token bone to defence. Just the continuing vague promise that spending will increase to 2.5% “when economic circumstances allow”. Of course in practice that will never happen, with Health, Education, Social Security, Housing, civil service pay … always at the head of the queue whenever any additional money can be found.
Indeed, whilst defence got nothing in the budget, the Chancellor somehow managed to find an extra £5.6 bn to give to the NHS to improve its efficiency(!!!), which in practice means tens of thousands more administrators, and another round of hefty pay rises, bonuses and gold plated pensions for senior managers at trusts.
This Conservative government under Sunak seems to have made a conscious decision to let USA, German, Poland, France .. even Australia pay to defend the UK’s national interests. Its acting as though the Cold War had just ended.
I have alway supported the NHS and argued on here that we should be able to accomodate a decent NHS whilst also advocating monies for defence and believed they need not be mutally exclusive- However I will do so no longer.
To provide monies for ‘IT application enhancement’ following the not so distant bebacle regards NHS IT upgrades that failed miserably is financial suicide and speaks volumes of their incompetance and misguided priorities.
I cannot stand Hunt maybe he’s trying to curry favour with the Health Service following his failed tenure as Health Secretary.
The sooner they are out the better-cannot come soon enough for me .
Although unfortunately I cannot see Labour improving anything – far from it …its a sad indictment of the political classes .
I used to work with the NHS. Absolute mess of management and admin. Just a huge bottomless pit of money. But no Government will dare touch it knowing anyone trying to change it would be the death knell of the party.
It’s a mess tbh. The Doctors and Nurses are superb but it needs to be scrubbed and started again.
For sure Sunak has it will be alright on the night attitude 🙄
What should probably be cut is Tempest. That is something that is simply going to eat the entire defence budget, only to be cancelled a decade down the road. The UK is not going to build a new generation fighter when the US spent $1.7 trillion to develop and build the F-35.
That’ll be a huge cave in and waste. 🇬🇧 needs its flagship developments otherwise others will do it for us and we’ll end up buying from them. Plus damage the relationship with Japan and Italy.
Not to develop and build; US gov accountability office says the F35 will cost the US $1.7tn over the life of the project, which includes LIFEX (is that a thing for planes?), weapons integration, maintenance and disposal.
We’re supposed to spend about £12bn developing Tempest pre-production.
F35 is a 5th Gen aircraft, the Tempest is a 6th Gen Aircraft. Understand where your coming from. But what is the current option after the F35? We need to be planning for the future and regardless of what that is (tank, Ship or Aircraft) it will be costly and there is no getting away from that, unless we buy someone else’s kit and that will not go down well with the public when we have a very capable industry here. What doesn’t help is the MOD’s procurement process.
RB,
Agree w/ your analysis (do not have the knowledge/expertise to comment on NHS). Am pondering the hypothesis that, in both the UK and the US, the political class believes that it is sufficiently insulated from the consequences of underfunding defence/defense, that signs of impending conflict can be safely ignored. Business as usual can be conducted until hostilities commence, and then the volunteer, professional forces will absorb the losses, until citizen armies are raised by government fiat. In the States it is sometimes referred to as the mission of the “leading and bleeding” classes. The only way to rectify that is to ensure the political class has skin in the contest.
Where’s Mr Shapps in all of this conversation to give some “accountability”, pardon the pun, back to the PAC? Bloody big money, must be easy to see on their spreadsheets.
We have to remember. That the increase in defence spending across some EU nations is still below what we have been spending for decades.
Although you right about many EU / NATO countries not spending enough on defence,
the difference between the UK & all other European countries apart from France is we have more than one potential enemy due to having responsibilities outside of Europe. To fulfil these responsibilities we need a large navy & the ability to transport personnel & equipment quickly etc, unfortunately particularly the Tories have significantly cut these capabilities with cuts to the navy & transport aircraft.
Maybe, just maybe it is all meant to collapse? Everything is. The sacred cow of NHS must be fed. The MIC must have its slices of raw profit. Meanwhile, taxed at wartime rates people get poorer. Many more millionaires created due to corruption, corporate greed grows. Worse? A bunch of politicians so out of touch with the populations feelings it is incredible. Doris Johnson, thank you, you are a true patriot.
The NHS is simply too expensive and the people who use it the most aren’t sharing most of the burden.
NHS fees need to go up. The “free for all” health care promise is unsustainable.
The nhs is still just about the cheapest system in the west. The issue is our population refuse to take care of themselves.
Whilst I agree that many don’t follow sound advice I really don’t think thats the real root cause of the issues- thats a far too simplistic and deflective stance.
My opinion is that the lack of early diagnosis of many problems subsequently cause further issues requiring multiple treaments.
The track record of treatment once diagnosed is commendable however our capability & capacity to identify issues early enough necesitate far more costly treatment later.
But what causes the lack of early diagnosis is overwhelming demand…a service that is managing so much I’ll health cannot manage preventative care…at present our GP services see around 45% same day need…and 55% long term conditions management…but it should be 20% same day and 80% planned long term management…but you cannot not see the same day…so the problem becomes a doom spiral that is created by over-demand..all the services I work with would love to do more preventive healthcare…but what do we do…let the people who need care now just die why we go off and engage with the kids and young people to ensure they are not sick adults…because upstream care is great..but it starts in childhood….
there is no early diagnosis in the world that prevents diabetes or the other long term conditions..the only thing that changes that is lifestyle choices…by the time we can tell you you are pre diabetic you have already done yourself in and yes we can tell you to eat better…but you would have spent that last 50 years fucking your body over over so really so want do you expect early diagnosis to do….
yes it can help with cancer but it’s not cancer that’s killing the NHS…it’s long term conditions and that is lifestyle lifestyle lifestyle..
The problem isn’t the ambition of providing free for all healthcare, the problem is, and I hate to sound all conspiracy theorist here, the vast number of non-jobs and hangers on.
I work in the NHS (Wales) and the sheer number of “managers” who couldn’t manage their way out of a wet paper bag is mind-boggling. You could genuinely sack 50% of the managers and the frontline staff wouldn’t even notice. They do nothing to improve the frontline treatment of patients.
It’s a bit of a cliche now but every trust has a suite of diversity and inclusion “managers”… why? I do believe the NHS should strive to be inclusive and diverse but this stuff is universal, there should be one policy setup centrally, not hundreds of individual policies for each trust. What they do the rest of the time is anyone’s guess. I’ve asked and still haven’t had a straight answer.
There is more than enough money to provide the actual healthcare required. It just needs to be run lean like a private business.
Agree, I worked in adult psychiatry for 20 years, the waste was appalling. It is not there for the “users”, it is there for the people who work in it. And you are right, the need for compulsory health insurance has never been greater.
To be honest, I’m struggling to understand why, the NHS is being mentioned in the same conversation as the Armed Forces budget cuts?
I think a lot of people like to blame the NHS…for many things.
I don’t think its necessarily a case of people blaming the NHS directly for the decline of the armed forces, more the recognition that this particular public service is absorbing more and more of the national purse leaving nothing for the other equally important departments. I know that you know that more than most and I don’t know enough about how the money is spent in the NHS to offer any solution. I am genuinely interested in what those who know more think can be done to halt and even reverse this interminable trend.
To be honest Andy, it’s not so much an NHS project as a societal one as well as a moral dilemma that the politicians and public don’t wish to face and the beast we face is health care inflation and demand.
If we look at healthcare inflation…it’s not the same as normal inflation..it’s usually a bit behind normal societal inflation and it’s also generally around 2% or so higher..so a graph of healthcare inflation will have the same shape as a normal inflation graph but be a bit later ( as it reacts to wider societal inflation) it also runs around 2% higher than normal inflation rates.
Then you get treatment costs..and the profound growth in the cost and complexity of treatment pathways. I will give you two basic examples or pathways changes in the last 20 years.
1) MI ( heart attack) and this is all a bit finger in the wind…around costs as I know ball parks but cannot be bothered to look up exactly and I have tried to match them all to if you did this today=
40+years years ago: serous MI = dead very low cost…bed until dead in a few days few £2000 at best..around 30% pre 1980 mortality rate.
20 years ago: serous MI= thrombosis in ED resus room ( £2000)..2 weeks in CCU ( £6000)..most survive but cost around £8000 pounds each. Mortality rates at 5%.
15 years ago serous MI= thrombosis/primary angioplasty ( basically a 24hour immediate, within one hour cardiac surgery ( £5000-£6000) + 2 weeks CCU ( £6000) so total costs are round £12,000 but survival rates huge..mortality is at 1.6%…
So in 40-50years years we have moved from 30% mortality to 1.6% mortality….but it costs say 6 times more and a huge number of staff.added to that when 30% just died within a month we had far less long term care and support costs..now everyone survives for years with a long term conditions the NHS has every more costs.
stroke is even more profound in the change of pathway”
20 years ago dense stroke= but to bed made comfy and left to die. If you survived you had massive impairment. Cost to the NHS..a few weeks in a ward before heading off to social care..say £4000 to the NHS
now we have 24/7 hyper acute stroke services..with immediate CT scan, thrombosis or neuro surgery depending on Stoke type…rates of death and significant impairment have dropped by around 40%…cost to the health service of each stroke with modern treatment and therapy is around £45,000.
We see this sort of change in pathways and profound increase in costs across the board.
when you then add in the social bit. Specifically long term conditions…now a person with multiple long term conditions costs around 10 times more than a fit healthy person…in 2015 54% of people over 65 had multiple long term conditions by 2035 this will be 67% of over 65s…also the number of people over 65 has raised exponentially…since 2005 we have increase the size of the population over 65 by 21% and those over 85 by 35%…
this creates a moral quandary for society..the combination of medical advancement and the increased cost of those treatments as well as an elderly population boom that is astonishing ( 35% increase in over 85s in a decade)…linked to our inability to take care of ourselves ( multiple long term conditions in the over 65s also going up significantly)…means that the over 65 population are literally overwhelming western health systems….
We do have to think carefully about this..because it’s a profoundly difficult question…
1) an amoral society or purist utilitarian society based on the greatest good for the greatest number..would likely come to the conclusion that if your over 65 and have multiple conditions you no longer get life saving health care…but we are not that..
2) A truly moral society would look at what the care actuality costs and pay it ( Germany is closer to this and pays around 20% more than we do)
our problem is we refuse to go for option one and refuse to pay for option two… to pay the NHS for the care it’s providing…and if we all walked into Tesco and spent 10 years only giving them 80% of the market value of what the food in our basket cost…Tesco would have collapsed…but we keep doing it to the NHS and expecting it to do more and more…
So a drift towards increasingly sedentary lifestyles coupled with the sheer cost of modern frontline treatments plus an increasingly aging population = financial overburden. Whats your take on the often repeated criticism of bureaucratic overload and excessive middle management in the NHS?
pretty much although I would say one of the key elements around the loss of public health and cost to the NHS is ultra processed food…it’s probably the biggest driver of long term conditions and poor health in our society by a long way and the effects of it probably suck a majority of the NHS budget as is affects every system in the body ( cardiac, respiratory, all organs) if you just look at obesity and diabetes as two of the complications of ultra processed food your looking at 20 billion a year in costs.
That whole middle manage thing is pure red herring to be honest…it really comes from people not understanding what the NHS is and how complex it all is. In reality the NHS spend on management is far less of a percentage than the majority of very large complex private sector organisations and most of the Bureaucracy is related to specific tasks that do need to be done…people forget that it’s not just the nurse and doctor looking after you but a who host of things and the Bureaucracy is generally doing that.
so out of the 1.4million staff who work for the NHS 36,000 are classed as managers or 1 manager for every 40-50 other staff types..and the number of managers between 2012 and 2022 was essentially static…in the same timeframe registered nursing staff numbers moved from 300,000 to 350,000 and drs from 100,000 to 120,000…infact if you look at the private sector across the UK the average numbers of managers in the workforce is 9.5% or around 1 manager for 10 staff..the NHS has on 2% of its workforce classed as managerial..so you can see the whole management cost issue really is an illusion that people with a private healthcare agenda use…
As for productivity the NHS is one of the few areas of the UK economy that actually show significant productivity increases a study from York universities found that NHS productivity between 2005 and 2017 increased by 16.5% against wider UK economy increase in productivity of only 6.5%. As an example of productivity the NHS of 1985 that saw far fewer and less I’ll patients, provide a far less complex service has 300,000 inpatient beds…the modern NHS has 160,000 even through it sees far more patients and they are far sicker… Germany has around 480,000 hospital beds…because it does not do and has not understand the productivity work that the NHS has ( but if I was a patient the German system is more humane and nicer..just more costly and less efficient)
one of the issues the NHS has suffered with since that 2010 conservative government is a massive increase in political interference…the Department of health and ministers have become massively controlling in a completely conflicting and confused way..as an example I did a an investigation of why a specific part of my system had a failure during covid and I found the cause to be the department of health..they sent within a 2 month period over 100 different sets of guidance many of which completely contradicted themselves..as the politicians interfered and kept changing priorities…another example is that I had 1million pounds of funding to support discharges..this was split into 20 projects each with around 50k..I had to report weekly on each 50k project to the department of health…that is crazy as every single county in the county would have to do the same…so instead of supporting the projects I was reporting to a ministerial policy advisor in Whitehall…as Whitehall was trying to control every £50,000 project in a system of 1.4 million workers and 570million patient contacts a year..
also just to go back to inflation…and healthcare inflation, every nation agrees that if your aiming for 2% inflation rates your healthcare inflation will aways be around 4% that’s a know quantity across the western world due to all the things around, aging, health, new advancements etc..up until 2010 that was always the way the NHS was funded and it’s average funding was always raised by 4% alway has been..from 2010 till 2022 the average raise per year was only 1.5%…which has effectively meant the NHS was starved of cash over the 12 years before the pandemic..and had essentially cannibalised itself to stay afloat ( did not maintain buildings, bid not train staff in the right numbers, did not undertake capital investment needed, did not do preventive healthcare interventions) so when the pandemic hit it was essentially already buggered….the truth the political classes don’t really talk about is that’s is why we had to lock down so hard…the evidence was that to not lock down would have collapsed the NHS and the loss of life from that event would have been staggering ( child gets septic..dies, heart attack dies, stroke, dies, appendicitis dies, car accident dies etc etc)…so you need to run you health services with spare capacity…you should never ever be using more than 90% of your capacity..where as the NHS was working at around 110% of its capacity by 2022 ( remember the NHS bed base is the lowest in the western world due to efficiency..with only 160k beds vs Germanys 480k beds).
the final staggering point is that if our society stays on its present trajectory around poor health, bad living and aging, just to provide the same service as now ( not improving just standing still and taking into consideration the very good productivity increase the NHS has always delivered) the NHS will need the workforce to be 2.3 million by 2035..with another 75,000 drs ( 50% more drs and nurses basically).
When a lot of people talk about changing our healthcare system and how inefficient the public sector is..just think why they are saying that and what people may get out of a changes system….remember US healthcare companies extracted 500billions pounds of profit from US tax payers and citizens every year and the county spent 4.5 trillion dollars on healthcare or 17.3% of its GDP with a private system or around £10,000 per person, Germany spent 475billion euros or just under 13% of its GP on a social security/mixed system..or £6,200 per person Uk spent 180billion pounds or 11%-12% or GDP last year ( but most of the time spent no more that 9%) …the Uk spend a staggering £3080 pounds per person..or half what the Germans do and a third of what the US do…basically with the NHS we do the same as walk into Tesco fill our shopping basket and only pay half..then piss an whing when the service is not very good and the shop has to close or cannot afford to fill its shelves, pay staff.
Just a final point that most people fail to understand…the NHS is not some staging large public sector organisation..it’s a system made of of over 100,000 different organisations and businesses…each GP practice is a private business, each pharmacy or set of pharmacies are private business…each hospital trust is an independent organisation that is owned by the taxpayer..each community nurse service is a business either owned by the taxpayers, a not for profit organisation or a for profit organisation….they are all bound together by contrast to provide services to the pubic and paid by those contracts…the ICBs oversee the system, plan what services it needs to contract and then commissions and contracts the services from the Market place….so the public sector monolithic organisation that the public thinks exists does not exists and never has…the NHS is a way of doing things and set of guidelines..based around contracts. But even the private sector organisations within the NHS are bound by the morality of public service…profit is needed but its small and service comes first…if it does not they loss the contract.
Thanks for the comprehensive reply 👍
Because NHS it is a giant part of the budget.
It is time the politician took defence seriously. They like to sit at the top table but frankly and I hate to admit it, we are rapidly becoming a paper tiger and in an increasingly dangerous world, that is a very vulnerable place to be..
Yes we spend 2% but it is an accounting exercise and nothing like that goes to our front line conventional forces. At least 15 billion goes to maintain the Nuclear deterrent. Building the Dreadnaught boats is a massive drain on the budget.
It is time that the nuclear deterrent was separately funded again, as it was before Cameron/0sbourne were disastrously in charge.
It comes down to this: politicians believe that there are higher priority areas to spend money. They likely believe this because that is what their constituents believe.
Given that money is finite, what are you willing to cut? Foreign aid? Climate change spending? The NHS? Alternatively, are you willing to raise taxes? Most Labour and Conservative politicians are almost certainly going to answer “no” on cuts in any of those areas. And both parties are likely to be extremely hesitant to raise taxes. So given that, the defence budget is not going up. It’s as simple as that.
I am well aware of the political landscape and the countries economic situation and also the realities of the public purse.
My point is simple,defence of the country is any governments No 1 priority, we are living in an increasingly unstable word and I very much doubt that either Putin or his buddies will wait for us to grown the economy
In theory yes … but the CDS just stated (and presumably the Government agrees) that Russia would “easily and quickly defeated” if it attacked NATO. Hence, they believe there is no need to increase defence spending.
Let’s hope Russia got the same memo.
And the US, since they will be responsible for 95% of the ‘defeating’.
Europe needs to stand on its own two feet as it is clear as long as the republicans are in the equation. US cannot be depended on.
There are some very worrying signs of poor cognition in Downing Street. They are more than just Defence Blind. They are defence disinterested. If there was a decision which was a 100% required which meant they had to spend additional money on defence and not on a department that they liked more they still wouldn’t do it.
Defence simply just isn’t their thing. They don’t talk about it. They don’t think about it and when reality ever intervenes to interupt their practised ignorance they ignore it. They would rather virtue signal another pointless sacrifice of money to the “Holy NHS”.
They’re very political but political in a dumbass way.