The National Audit Office (NAO) report on the Ministry of Defence’s Equipment Plan for 2023-2033 has brought to light the financial challenges surrounding the development of the Type 32 frigates for the Royal Navy.

The Type 32 frigates will be a crucial component of the future fleet, yet they face significant funding shortfalls.

The NAO report indicates that the Royal Navy’s new entries into the shipbuilding pipeline, including the Type 32 frigates, are forecasted to cost £5.9 billion more than the currently allocated budgets.

“For example the Navy has included the full predicted costs of new entries into the shipbuilding pipeline – including Multi-Role Ocean Surveillance ships Type 32 frigates Multi-Role Support Ships, Type 83 destroyers and Future Air Dominance System – which are forecast to cost £5.9 billion more than the currently allocated budgets.”

The Type 32 Frigate is expected to help grow the Royal Navy’s surface escort fleet from 19 to 24 vessels.

Gareth Davies, the head of the NAO, expressed grave concerns over the unaffordability of the Equipment Plan in the report, which can be found here.

“The MOD acknowledges that its Equipment Plan for 2023–2033 is unaffordable, with forecast costs exceeding its current budget by almost £17 billion. This is a marked deterioration in the financial position since the previous Plan. Deferring choices on spending priorities until after the Spending Review, while understandable given the government’s ambitions expressed in the updated Integrated Review, risks poor value for money if programmes continue which are later cancelled, scaled down or deferred because they are unaffordable. The MOD should consider how future Plans can achieve their core purpose: providing a reliable assessment of the affordability of its equipment programme and demonstrating to Parliament how it will manage its funding to deliver equipment projects.”

Brief summary of projects either not Included or partly included in the Equipment Plan

The National Audit Office report on the Ministry of Defence’s Equipment Plan 2023-2033 reveals several critical capability requirements that are partly or fully excluded from this year’s plan. These exclusions, despite being integral to the UK’s defence strategy, have no funding allocated in the equipment plan.

Programmes Not Included in the Plan:

1. Land Environment Capability Assessment Register (British Army):

  • Unfunded Gaps: Significant gaps in lethality, air defence, C4I systems, logistics, CBRN, and mobility.
  • Internal Balancing: The Army is conducting an internal exercise to modernise forces within existing funding.

2. Warrior Armoured Vehicle and Challenger 2 Main Battle Tank (British Army):

  • Costing Uncertainty: Extensions for Warrior and Challenger 2 are still being costed, potentially leading to unfunded pressures.

3. Land Precision Strike (Strategic Programmes Directorate):

  • Requirement: A need for a ground-launched precision guided weapon with at least 80km range.
  • Funding Status: Programmed for the end of the decade, but no financial commitment yet.

4. SPEAR Cap 3 Electronic Warfare Air-to-Ground Missile (Strategic Programmes Directorate):

  • Programme Status: Initial low-cost capability demonstrator under negotiation; full programme confirmation pending by the RAF.

5. Meteor Air-to-Air Missile (Strategic Programmes Directorate):

  • Mid-Life Upgrade: Funding of up to £2 billion required for mid-life upgrade, currently not included.

6. Test and Evaluation Contracts (Strategic Programmes Directorate):

  • Funding Shortfall: Insufficient funding to replace two contracts ending in 2028; development and procurement funding gap exists.

Partly Funded Programmes Included in the Equipment Plan

1. A400M Transport Aircraft Additional Purchases (Royal Air Force):

  • Funding Status: Some funding held centrally; sufficient but does not align with later years’ spending needs.

2. F35-B Combat Aircraft Third Front-Line Squadron (Royal Air Force):

  • Capital Budget Shortfall: Increases by £0.1 billion between 2023-24 and 2026-27.
  • Operational Funding Gap: Lacks £0.4 billion needed to operate the squadron.

3. New Entries into the Shipbuilding Pipeline (Royal Navy):

  • Projects Included: Multi-Role Ocean Surveillance ships, Type 32 Frigates, Multi-Role Support Ships, Type 83 destroyers, Future Air Dominance System.
  • Financial Shortfall: Costs are £5.9 billion higher than current budgets.

4. In-Service Extension of RFA Argus (Royal Navy):

  • Implementation: Extension of the primary casualty receiving ship is underway.
  • Budget Issue: No additional budget was received for this extension.

5. Mine Hunting Capability (Royal Navy):

  • Plan Inclusion: Second phase included in the Plan.
  • Funding Shortfall: No additional budget for this phase; additional funds sought for Hunt Class vessels until new capability is operational.

6. Future Commando (Royal Navy):

  • Modernisation Funding: £0.7 billion required for Royal Marines modernisation to enable operations from the sea in high-threat environments.
  • Budget Exclusion: This funding has not been included in the Plan.

7. Directed Energy Weapons (Strategic Programmes Directorate):

  • Status: Novel capability with assessment phase funding.
  • Review Pending: MOD to review at the end of the assessment phase; may replace or supplement other capabilities.
Avatar photo
George has a degree in Cyber Security from Glasgow Caledonian University and has a keen interest in naval and cyber security matters and has appeared on national radio and television to discuss current events. He also previously worked for the NHS. George is on Twitter at @geoallison
Subscribe
Notify of
guest

56 Comments
oldest
newest
Inline Feedbacks
View all comments
ChariotRider
ChariotRider
15 days ago

This sums up the ‘conspiracy of optimism’ perfectly. Put stuff in the plan and money will be found with unspecified ‘efficiencies’… I actually heard someone use that when I was still defence procurement – went into the box on the relevant form I believe. We all know that this is in effect kicking the can down the road for the next encumbent to deal with. The result is a bunch of poorly funded projects that are doomed to fail as a result, taking money away from projects that could actually deliver. I would apply a military maxim here, ‘reinforce strength,… Read more »

grizzler
grizzler
15 days ago
Reply to  ChariotRider

I assume we will discuss the expected procrastination on here at length….

John Clark
John Clark
15 days ago
Reply to  ChariotRider

T32 absolutely needs to be a better equipped batch 2 T31. A simple evolution and and keep the production line and staff busy.

Reinvent the wheel with a clean sheet design and it simply won’t happen, there won’t be a T32.

Louis
Louis
15 days ago
Reply to  ChariotRider

T32 will end up being Babcocks stretched T31 with a mission bay anyway. They’re making the pretence of it being a competition, but just like NMH which will go to Leonardo, it isn’t.

A b2 T31, or T32 shouldn’t be ordered until Venturer is at least in sea trials.

Supportive Bloke
Supportive Bloke
15 days ago
Reply to  Louis

Agree

Jonathan
Jonathan
13 days ago
Reply to  Louis

Agree It would be very sensible to actually have the first in class finish its first in class trials before ordering another batch. Personally I don’t even think they need to go for the stretched version of the T31…it’s a bigger hull than most frigates already, just maybe tweak the sensor or weapons fit depending on RN needs…the important part is getting the escort fleet back to a minimum size of 24 hulls as quickly as a reasonable.

Louis
Louis
12 days ago
Reply to  Jonathan

The stretched hull is only stretched in order to make space for the multi mission bay. It’ll be really useful and fit in exactly with what the MOD wanted with T32 anyway.

Expat
Expat
15 days ago
Reply to  ChariotRider

As to Tories have already lost the next election they should just order everything with cancellation clauses higher than the contract value.😀

Ex-Marine
Ex-Marine
15 days ago
Reply to  Expat

Yep. Do a Gordon Brown and make them uncancellable.

Gareth
Gareth
13 days ago
Reply to  Ex-Marine

That worked for the carriers didn’t it? Genuine question. I seem to remember them being uncancellable which is why they ended up both going to build despite (at the time) Cameron’s government trying to find ways to off load them?

ChrisLondon
ChrisLondon
13 days ago
Reply to  Gareth

But there were reasons for that which do not apply here.
Doing what was suggested would leave all the parties involved open to fraud charges. The politicians involved should face treason charges.

Nigel
Nigel
15 days ago
Reply to  ChariotRider

Amen to that 🙏 gaffer tape and good wishes is the way ahead. Thanks Government for nothing.

James Fennell
James Fennell
9 days ago
Reply to  ChariotRider

To be honest, external factors have derailed the budget this time around – inflationary pressures, need to create stockpiles and adapt to Russian threat, backfilling equipment sent to Ukraine. Treasury has refused to allocate any new money except for replenishing stocks so MOD has had to improve readiness on previous budget which has been eroded by global economic conditions. So blame Liz Truss, Putin and Sunak rather than MOD this time.

Expat
Expat
15 days ago

Whats the future air dominance bit under Shipbuilding for?

SailorBoy
SailorBoy
15 days ago
Reply to  Expat

The air defence system for the Navy that is going to be centred on T83. No, I don’t know why it’s a separate item unless there are going to be two classes? We can but hope…

SailorBoy
SailorBoy
15 days ago
Reply to  Expat

The air defence system for the Navy that is going to be centred on T83. No, I don’t know why it’s a separate item unless there are going to be two classes?
I hope so, we could have a T31 based outer missile bus/small boats and inner one per group (Build 4) Air defence 8-10,000 tonne AD cruiser with FC/ASW and future anti-ballistic capability

SailorBoy
SailorBoy
15 days ago
Reply to  SailorBoy

Sorry I typed this out twice, thought prev one hadn’t posted

Robert Blay
Robert Blay
15 days ago
Reply to  SailorBoy

It isn’t a separate class. It’s a system of systems that the T83 will just be part of. Like Tempest will be not just be a manned fighter. Drones, networking capability. Linking assets together to create a bigger picture of the battle space.

SailorBoy
SailorBoy
14 days ago
Reply to  Robert Blay

But it was included in their Shipbuilding Pipeline alongside the T83, which implies there will be a separate class of ships.

Jonathan
Jonathan
13 days ago
Reply to  SailorBoy

I would imagine that line will be the required work on other vessels to make the system of systems concept work.

SailorBoy
SailorBoy
13 days ago
Reply to  Jonathan

Good point, they might want to fit aspects of FADS into T31, 26 in order to maintain them as useful carriers of AA missiles as well as offloaded sensors

Jonathan
Jonathan
12 days ago
Reply to  SailorBoy

Indeed from the sounds of it the expectation would be that it becomes a very advanced integrated air defence system far above what you find now in the fleet. So this would include an element of work on every escort and probably the carriers and amphibious vessels….

Expat
Expat
15 days ago

T32 has been a dead for awhile.

Jonathan
Jonathan
13 days ago
Reply to  Expat

Let’s be honest it never really existed..I still thing Boris misspoke and was actually taking about T31…then as Boris always has bluff through the mistake with a reconstruction of the trueth.

Henry Lamb
Henry Lamb
15 days ago

Depressingly predictable

maurice10
maurice10
15 days ago
Reply to  Henry Lamb

So true but I bet there will be no letup in the ever-increasing overseas commitments? In truth, most of our allies are in a similar financial fog when it comes to defence spending.

David Lloyd
David Lloyd
15 days ago

We could save a lot of money if we just bought more battle-proven kit off the shelf. Halving the MoD headcount from 67,000 to 33,500 would also save a lot of money. Why does the Army need 650 Colonels and Brigadiers? What do they do all day? Other than having long lunches and nipping off early on Fridays?

Rowan
Rowan
15 days ago
Reply to  David Lloyd

Yep, because decapitating the command structure to save money has worked for so many countries throughout history. Definitely a military issue not a political one. /s

maurice10
maurice10
15 days ago
Reply to  David Lloyd

Come on David let’s be honest here, you mean long lunches and working five days a week from home.

David Lloyd
David Lloyd
15 days ago
Reply to  maurice10

Yes I would love to get paid £90,000pa for walking the dog

Roy
Roy
14 days ago
Reply to  David Lloyd

A lot of money could be saved in many ways. All the “pretend” programs in Government that cost a lot but deliver nothing in practical terms for the UK could go – much of the foreign aid could go, much of the “stop climate change” spending could go. But you would have to take on the entire establishment if you did that. Labour will do none of that. Indeed, the pretend program spending would simply go up. But neither will the Tories take on any sacred cows. They seem spent with absolutely no new ideas . … so the end… Read more »

Wasp snorter
Wasp snorter
15 days ago

Increase ‘Navy’s surface escort fleet from 19 to 24 vessels’, err no, from 17 (at best) to 24, I’ll eat my hat on the day we ever have 24 escorts in play and I mean a serious hat at that, such as an Isambard Brunel style top hat.

maurice10
maurice10
15 days ago
Reply to  Wasp snorter

Wasp snorter would make a great name for a missile. 😀

SailorBoy
SailorBoy
15 days ago
Reply to  maurice10

What do you think it would do? I’m envisaging short range boat defence, like Martlet but wire guided? with submunitions for multiple targets. Maybe limited AA mode?

maurice10
maurice10
15 days ago
Reply to  SailorBoy

Primarily snort I guess?

SailorBoy
SailorBoy
15 days ago
Reply to  maurice10

What’s that?
Other than the NASA Rocket sled

maurice10
maurice10
15 days ago
Reply to  SailorBoy

Let’s put it this way, if an enemy appeared with a Wasp Snorter I’d be off!

SailorBoy
SailorBoy
15 days ago
Reply to  maurice10

Sounds suspiciously like a water pistol or drug though

Wasp snorter
Wasp snorter
14 days ago
Reply to  SailorBoy

No drugs or water pistols, It’s what I called my sole trader Company in order people would remember it, I enjoyed invoicing with that name and speaking to RBS or HMRC, “what, did you say err Wasp Snorter?”. Although now I need to design a missile for it, maybe akin to a NLAW.

Wasp snorter
Wasp snorter
14 days ago
Reply to  SailorBoy

Good suggestion

Wasp snorter
Wasp snorter
14 days ago
Reply to  maurice10

Wasp Snorters, the next generation of Land Attack Missile, or WSLAM. Get your order in now.

SailorBoy
SailorBoy
14 days ago
Reply to  Wasp snorter

Hi there, this is the Defence Procurement Office of His Majesty’s Government. We’ve heard about your new missile and that it has “Advanced Networking”, “Next-gen guidance” and “Controllable submunitions”. We’d like an order of 3000 to put on all of our warships, please. How much will that cost?

Wasp snorter
Wasp snorter
14 days ago
Reply to  SailorBoy

I’ve already spoken to the MOD some time ago and they insisted on a £30 million due diligence process with 35 consultants and to pay £25million per missile spread over 12years. I told them they only cost £5k each and I can produce them all in a year, but Tarquin Mangrove, who headed up the MOD contracts team, said ‘dear boy, that’s not how we do things here’

Micki
Micki
15 days ago

Always the same. Shortage of funds and cuts, nothing new.
Russia and China are Happy to see Britain is no longer a rival.
The future of one of the two Carriers is not safe with these traitors, (both parties)
Thanks politicians.

Last edited 15 days ago by Micki
Chris
Chris
15 days ago
Reply to  Micki

Military funding doesn’t buy votes these days. That’s what it comes down to.

Jon
Jon
13 days ago
Reply to  Chris

What does our current PM know about elections? The last two elected leaders of the Conservative Party were in favour of spending more on defence. The current Chancellor and the Def Sec have both come out in favour of 3%. Only the unelected Prime Minister is against it. Votes have nothing to do with it.

Frank
Frank
11 days ago
Reply to  Chris

Exactly.

Andrew D
Andrew D
15 days ago

These Articles tonight on ukdj some what on the depressing side .But Facts are facts .Bet George feels like a drink tonight 🍺 🇬🇧

Paul
Paul
15 days ago

Things will drop out of the portfolio all of the time. It may not be that far out when it comes to actually spending cash.

Cripes
Cripes
15 days ago

We can’t really complain about the equipment budget, the amount available over the 10-year period has jumped 25% from last year (£240 bn to £306 bn). But still the projected spend over 10 years exceeds the budget by nearly £17bn. To put that figure in perspective, it’s the equivalent of 200 Typhoons, or 42 T31s or 340 Challenger 3s. So heap big money. Of the forces’ 6 Top Level Budget Holders, 4 have come in around budget, having cut their cloth to fit. (Army, RAF, Strategic Command, Strategic Programmes Directorate (aka special weapons). 2 are miles out, yet again. The… Read more »

PeterS
PeterS
14 days ago
Reply to  Cripes

You have got it absolutely right. The RN have included what they would really like to have, a political bid. The other services have included only committed programmes.
This year the MOD has not completed a full 10 year plan, so the NAO is reporting on the separate plans of each service. This is hardly the most useful way to deliver clarity, made worse, as in previous years, by aggregating acquisition and support costs.
The DNE increase looks enormous but I assume includes costs arising from the Aukus agreement and an accelerated profile for Dreadnought spending.

Jon
Jon
13 days ago
Reply to  Cripes

You are right, there’s a huge leap, although not as big as you say. Indicative budget has increased from £242bn to £289bn, that’s a £46bn increase. However, you forgot to check the breakdown. Neither procurement nor support budgets rise by much, not even in line with inflation. £43.5bn of that £46bn goes to Head Office funding. What is that? Restocking the wine cellar, we don’t know, or just we won’t say. All these “we can’t afford this that and the other” articles can’t be nailed down as we don’t know where the increased projected spend is going. Instead of focusing… Read more »

Ex-Marine
Ex-Marine
15 days ago

As usual, the British governments in reality is fur coat no knickers.

Richard
Richard
14 days ago

About time the MOD were forced to cut the horrendous amount of wastage. This wastage included civil servants in Whitehall as well as totally iliminating absolute waste by these civil servants who decide mid-contract equipment for all three services is not suitable, then change the design making everything far more costly. WASTE with incompetence. Listen to the people on the ground, they wil tell you what is required, rather than listening to some office bod who has never been to sea, never fired so much as a water pistol, never flown in a supersonic jet aircraft in combat.

Geordie
Geordie
13 days ago

And no mention of medium lift helicopter will that be post 2038 as well

Jon
Jon
13 days ago
Reply to  Geordie

The blurb suggested that the Army used different principles to decide what was included, only showing that which they have budget for. If the medium helicopter comes under their heading, it might still be planned, just not funded.