71. Last year, I expressed my profound concerns around the Ministry of Defence's capacity to achieve its required cost savings. I also noted the challenge that the MoD faces in ensuring that the Defence Equipment Plan's affordability gap does not widen any further.89 My comments followed the Committee's May 2018 report which found that the Equipment Plan was rapidly proving itself to be unaffordable and that the MoD was overly optimistic about the efficiency savings it could make. We found that the department's list of commitments and challenges was growing, while its level of funding was not.90 The findings of the previous year's report on the Equipment Plan were much the same.91
72. The situation has not improved. This year, we found that the MoD has made little progress in addressing its affordability shortfall and the department now estimates that the gap could widen to £14.8 billion. Even this, to us, appeared overly optimistic.92 I believe that the situation with the MoD's finances are reaching crisis point.
73. The department is continuing to delay making difficult decisions and has not gone far enough in identifying which programmes should be delayed, stopped or scaled back. The MoD also finds itself committed to expensive, high-stakes programmes-such as Carrier Strike-where total costs are not yet known and are likely to escalate over the coming years.
74. My concerns are compounded by the wastefulness I have, at times, witnessed from the MoD. Our session on Submarine Defueling and Dismantling showed how the department has spent extortionate amounts on the storage of redundant submarines, with personnel employed to man and maintain the decommissioned fleet. Movement on this programme has been glacial and appears all too symptomatic of the MoD's struggle to get to grips with and make difficult decisions.
75. I look forward to our next Equipment Plan session with the MoD and expect to see significant progress with the plans of how the department intends to address its shortfall.
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89 Committee of Public Accounts, Third Annual Report of the Committee of Public Accounts, Second Special Report of Session 2017-19, HC 1399, 5 July, p 10 and p 11
90 Committee of Public Accounts, Defence Equipment Plan 2017-2027, Thirty-Ninth Report of Session 2017-19, HC 880, 11 May 2018, Summary
91 Committee of Public Accounts, Defence Equipment Plan, Fifty-sixth Report of Session 2016-17, HC 957, 25 April 2017, Summary
92 Committee of Public Accounts, Defence Equipment Plan 2018-2028, Seventy-Seventh Report of Session 2017-19, HC 1519, 1 February 2019