Britain’s Ministry of Defense is facing a 16.9 billion pound ($21.4 billion) shortfall in its equipment budget due to inflation and demands from the government’s updated strategy, the public spending watchdog said on Monday.
“The Ministry of Defense (MoD) recognizes that its Equipment Plan 2023-2033 is not affordable, with projected costs exceeding its current budget by £16.9 billion,” the National Service said in its annual report Control (NAO).
In March this year, the estimated cost was £305.5 billion compared to a budget of £288.6 billion, the biggest shortfall since the NAO started publishing the annual report in 2012.
The outlook represented a “significant deterioration” in the economic position from last year’s plan, the report said.
It said inflation was to blame, in part, as rising costs were not fully reflected in last year’s calculations.
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“But more importantly, the cost of implementing major priorities” set by the government “has increased significantly,” he added.
The government outlined its ambitions in the 2023 update of the Comprehensive Review of defense and foreign policy priorities, “the implications of which the Foreign Office is still grappling with”, the NAO said.
Meg Hillier, Labour’s chair of the Commons Public Accounts Committee, said she was “concerned about the risk to the UK” posed by the deficit.
There was a “huge gap between the military equipment the government thinks it needs and the budget available to provide it,” he added.
The Treasury accepted that the report “recognises the significant impact of global headwinds and high inflation on UK defence”.
However, he added that it “does not and cannot accurately reflect the current or future state of the armed forces’ equipment plan.”
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“The report is not based on a full equipment plan and is a snapshot from April 2023,” a spokesman said.
Source: AFP