MoD budget pressures ‘risking national security and damaging morale’

Select committee chairs set out fears for the future in letter to prime minister Theresa May

Prime minister Theresa May appearing before the Liaison Committee in March. Credit: Parliament TV

By Jim Dunton

12 Jun 2018

Unrealistic Ministry of Defence savings targets and the need to cope with evolving threats are putting national security at risk and resulting in an “extremely worrying” decrease in morale among the armed services, two influential MPs have warned prime minister Theresa May.

Public Accounts Committee chair Meg Hillier and Defence Select Committee chair Julian Lewis set out their concerns in a no-punches-pulled letter following May’s recent appearance before a session of parliament’s Liaison Committee.

They bring together affordability-gap projections from different streams that add up to more than £30bn over the course of the next three decades, then set them against previous defence committee observations on the “over-optimistic nature of the department's savings targets, which if not met will result in the affordability gap growing further”.


Hillier and Lewis said they “fully accepted” May’s assertion that the MoD needed to deliver efficiency savings, which the prime minister had argued when she appeared before the Liaison Committee in March.

But they stressed fears that the Modernising Defence Programme would “not be able to deliver the additional capabilities required to respond to new threats and undertake necessary organisational reforms” within the existing budget.

A Public Accounts Committee report last month questioned the MoD’s dependence on that programme to deliver savings to contribute towards the 10-year Defence Equipment Plan, which the committee estimated was facing a funding black hole of up to £20.9bn.

Hiller and Lewis’ letter also pointed to a £2.9bn affordability gap in the Defence Nuclear Enterprise and a previously highlighted £8.5bn funding gap in relation to maintaining the defence estate over the next 30 years.

“The Defence Select Committee has on several occasions highlighted the unrealistic and over-optimistic nature of the department's savings targets, which if not met will result in the affordability gap growing further,” they wrote.

“It has also expressed considerable concern at the uncertainty around the full costs of one of our most important defence investments – the F35 jet. The Joint Committee on the National Security Strategy has also pointed to the ‘structural hole’ in the defence budget.

“Such concerns are not simply about balancing the books, as important as that is.

“Rather, the very real effects of inadequate funding can be seen in the extremely worrying decline in morale amongst our armed forces, shown very starkly in the latest results of the Armed Forces Continuous Attitude Survey, which was published last week.

“We urge you to consider our concerns as you examine future spending plans and the work of the Modernising Defence Programme.”

In January, defence secretary Gavin Williamson announced that the defence strand of the National Security Capability Review was being separated, and that the Modernising Defence Programme would take its place.

Last month’s PAC report said that while the MoD had “put its faith” in the programme as a way of balancing the books for the Defence Equipment Plan, members were “highly sceptical” their hopes would be repaid.

The Defence Select Committee is set to report on its inquiry into “priorities and expectations” for the Modernising Defence Programme next month.

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