A.2.  Structure of MoD Top Level Budget Holders

In order to deliver defence outputs effectively, the MoD is organised around eight cost centres, each of which is responsible for the delivery of specific outputs. These outputs are either elements of military capability or services which support the delivery of military capability, as indicated in schematically in Figure A-1155.

Figure A-1: Current TLB structure within the MoD

The overall MoD budget is therefore allocated to eight Top Level Budget ("TLB") holders, each of whom is responsible for delivering an element of the Department's overall output. TLB holders are the individuals who head the organisations which deliver the said output: CDM, in the case of DE&S, and Chiefs of Staff in the case of the Uniformed Services. These individuals establish Service Level Agreements with the Permanent Under Secretary ("PUS") of the Department and the Chief of the Defence Staff ("CDS") which set out the roles that their organisations are to perform and the associated budget. In this way, overall Departmental expenditure limits are disaggregated into limits on the capital and operational expenditure of its component parts. Departmental CDEL and DRDEL control totals are therefore cascaded down to TLB holders, who are responsible and accountable within the Department for the expenditure within their own organisations.

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155  A number of agencies and trading funds also operate within the MoD. These are not considered here.