The National Audit Office has issued qualified opinions on the Ministry of Defence’s 2024–25 accounts, citing missing records for major capital projects and a material shortfall of £2.56 billion in provisions for legal and other liabilities.
The NAO found that the MoD was unable to provide accounting evidence for a large portion of projects undertaken by the Atomic Weapons Establishment (AWE), a non-departmental public body responsible for aspects of the UK’s nuclear deterrent.
As of 31 March 2025, AWE projects represented £6.13 billion of the MoD’s assets under construction, including £1.5 billion in “legacy projects” that have remained unchanged for several years.
Auditors said the MoD could not demonstrate that the continued recognition of these project costs was appropriate, and that other balances within the £6.13 billion appeared not to meet accounting standards. As a result, Comptroller and Auditor General Gareth Davies limited the scope of his audit opinion on the department’s 2024–25 financial statements.
The watchdog also identified a £2.56 billion shortfall in provisions recognised in the MoD’s 2023–24 accounts, linked to personal injury claims and resettlement costs under the Afghan Relocations and Assistance Policy (ARAP) and the Afghanistan Response Route (ARR). These omissions required the restatement of last year’s accounts and led to a qualified regularity opinion due to unauthorised expenditure.
The NAO said the MoD had not briefed auditors about the 2022 data breach that triggered the ARR scheme until a super-injunction was lifted in July 2025, preventing scrutiny during the 2023–24 audit. The MoD has since begun work with AWE to review its £6.13 billion project ledger, which the NAO will examine as part of its 2025–26 audit.
The National Audit Office made clear that its findings point to serious weaknesses in the MoD’s financial management and record-keeping for long-term capital and legal obligations.
Is anyone surprised? It’s like HMG has spent the last 30 years degrading parts of the MoD as a competent entity.
Or, the AWE is so secret, the MoD has no idea where all the money allocated to the DNE goes?
Or, rampant corruption and money is going missing like the Donald Rumsfeld 1 trillion pre 9/11 saga.
Which is it?
Is the reported 2 billion overspend we heard about a few weeks ago linked to the 2.56 billion highlighted re ARAP and ARR?
If this government cuts 2 billion of military assets to make up the
Shortfall I hope they fall, quickly.
Or am I misreading all this?
M8 it’s just like Network Rail modernisation costs but way more lethal ! Ancient out of date construction / infrastructure / tech which can only be visually assessed to estimate project costs and then when you get into actual implementation it’s a Pandoras Box of unknown issues. Big difference is lack of plans and there is no one around who knows the back story so once it’s been opened there is no way back and that’s £££££.
The other big difference is that a lot of the AWE / DNE infrastructure requires H&S levels that other than Nuclear decommissioning are off the scale. A lot of it was built Post war when H&S was wearing a flat cap and boiler suit as PPE.
It’s all clapped out, maintenance / updates deferred for decades or ignored by our Political masters and now it’s not only got to be able to replace our kit but handle increased volumes for our Australian Friends.
Hi mate.
Thank you. I don’t mind spend if it’s for a reasonable purpose and our DN infrastructure clearly needs modernising.
So what about that ARR ARAP nonsense?
Memo To: MOD
FROM: HM Treasury
Darlings
Don’t you worry your pretty little heads about the missing £2.54B. We’ll just not replace the 3 x T26 you’ve sold to Norway, and call it quits. That will still leave you with 5 new shiny boats to play with, plus those silly little T31 with their pop guns and 6 AA missiles.
With all our love
RR
PS: T83? In your dreams.
£25,000 for a lightbulb……………£90,000 for a toilet seat…………