Q1 Chair: Thank you very much indeed. Can I thank Mark Beverstock in particular, because I gather you put off going on a trip or to a meeting to be present? Thank you very much for making yourself available to us.
Commodore Beverstock: Thank you.
Q2 Chair: The context is one where, in terms of running the actual projects, it looks as if we are on a trajectory of improvement. Let's start by saying that we welcome that. That has come over the last few years, and is a welcome development. I ought to ask, to start, have you balanced the budget?
Ursula Brennan: No, we have said that it is broadly in balance, which means that it is not yet there. The former Secretary of State made an announcement on 18 July, and that was the expression he used, "broadly in balance". He had said on a number of occasions that the scale of the problem that we were tackling would take time to address, and we would not do it all in one go. He said in that announcement that we had made very great progress, but there was still work to be done in the current planning round-planning round 12.
Q3 Chair: You will appreciate that that is a little bit gobbledygook, because at the moment we do not know how much you are predicting to overspend unless you take some decisions.
Ursula Brennan: We have discussed before that how much money we have available, how much things are going to cost, and therefore what the scale of the problem is, is a factor of the choices about where we spend our money, and the analysis that we do about the costs. We are discussing this currently with our new Secretary of State, so I cannot comment on where we have got to in closing the gap, but we have said that we will publish a 10-year statement of the Equipment Programme, and that the NAO will examine that. There will be an opportunity, when we have completed this work, for the NAO to do that.
Q4 Chair: We have had the SDSR, and since then I understand you have done three reviews, or whatever you call them, of your budget.
Ursula Brennan: We had the SDSR and we had the announcement that was made in July. In the announcement that was made in July, we said there was further work to be done in the planning round, which is the work that we are doing now.
Q5 Chair: How many planning rounds have you had?
Ursula Brennan: There is a planning round every year.
Q6 Chair: One?
Ursula Brennan: One planning round every year, yes.
Q7 Chair: When you talk about affordability of the budget, what years are you looking at?
Ursula Brennan: We look across the 10 years.
Q8 Chair: You do not know, because you have no idea what your next CSR settlement will be.
Ursula Brennan: We do not know what the next CSR would be, and that is part of the reason why it is very difficult to say, but we were given some planning assumptions that we could plan on in that July announcement.
Q9 Chair: Anybody in their right mind would recognise that the changing economic circumstances make it highly unlikely that assumptions you were given in July will hold good for the next year and so on. That is one thing that has gone out of the window probably now.
Ursula Brennan: We have to have some kind of base case from which we work, otherwise you could just wash your hands and say there is no point trying to estimate, because who knows what the numbers will be.
Chair: Yes, but your base case is unrealistic: what was promised in July is probably unrealistic now in December.
Q10 Chris Heaton-Harris: You have obviously moved forward and, as the Chairman said, that is very much welcomed by everyone on this Committee. Does "broadly in balance" mean you are on a trajectory to where you want to be in 10 years' time all things being equal?
Ursula Brennan: Yes, absolutely