The support of existing equipment is a very significant commitment of Department resources, of similar magnitude to the cost of providing new equipment. Major reforms and improvements in efficiency have been delivered and more are planned.
However, under the current arrangements where single Service agendas predominate, the ESP appears to be locked into 'planning by extrapolation'. There appears to be no formalised process for:
• reviewing drivers of cost within the plan across capabilities to understand how tradeoffs might be made; or
• to identify where support might be rationalised with minimum impact on capability.
These factors suggest that there is a real danger that the ESP will continue to grow in spite of specific initiatives to cut costs. This will mean that output targets will have to be further reduced or expenditures deferred.
This risks building up an ESP "bow wave" of deferred maintenance spend or risk (along the same lines as deferred project expenditure in the EPP), which will need to be addressed at some point in order to maintain / deliver capability.
In both the EPP and ESP time is being traded off to meet cost constraints, with increases in longer term or shorter term capability risk, respectively.