A conceptual quantitative analysis of the Equipment Plan Programme ("EPP") was undertaken by the Review team to determine the consequences on capability and timing of maintaining 'affordability'.
The EPP presents a 30-year view of the planned spend on equipment procurement. As noted in Chapter 6, the total spend in the EPP has been growing, and in general, the levels of planned annual expenditure exceed the amount available to spend. As shown in Chapter 7, the costs and duration of projects have historically evolved over time, with a general pattern of significant increases. It is therefore reasonable to expect that (for whatever reason) the "outturn" future spend on projects will not be exactly as planned in the current EPP. Without cancellation of significant expenditure, this situation implies ongoing delay will be required, with the average time to completion of projects continuing to extend.
This Appendix incorporates three approaches to exploring the pressures in the EPP:
• a conceptual analytical approach used to assess the scale of the affordability problem and the implications on 'productive' spend;
• a conceptual numerical approach with more refined assumptions will be used to look at the interaction between cost overruns and delays in the EPP; and
• an analysis of how the current shape of the EPP could evolve.