MOD's plans to modernise military going to be slowed by rising costs, watchdog report says

A new report says the Ministry of Defence's plans to modernise Britain's military will be slowed down by rising costs.

The National Audit Office (NAO) report says inflation and the global energy crisis are likely to add billions of pounds to the final bill, meaning flagship projects like the Royal Navy's Future Commando Force could face funding gaps.

The Future Commando Force was unveiled in last year's Integrated Review – it would see 4,000 troops deployed around the globe, taking on roles traditionally carried out by Special Forces.

However, the NAO report says significant parts of the £200m plan are still unfunded, creating 'additional risks' that it can be delivered.

The MOD plans to spend £242bn on equipment over the next 10 years.

At the same time, it is aiming for £13.5bn in efficiency savings.

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The NAO, the UK's independent public spending watchdog, says it is optimistic, particularly amid the Ukraine war and current energy crisis.

Type 32 frigates have already been withdrawn by the Navy on the grounds of unaffordability. The report says the eventual cost is likely to be much higher.

According to the spending watchdog, the MOD has improved its budgeting but the current equipment plan gives defence very little flexibility to absorb cost increases.

It projects that by 2032, rising inflation alone could increase the MOD's spending bill by more than £3bn.

Responding to the report on the Ministry of Defence's Equipment Plan, Shadow Defence Secretary John Healey said: "The Conservatives' broken procurement system continues to risk the delivery of the equipment our Armed Forces need to fight and fulfil our NATO obligations.

"With threats increasing and sky-high inflation, the NAO has rightly recognised that this plan has already been overtaken by events.

"The MOD can't even afford to deliver all the capabilities set out in the Government's own Integrated Review."

He added: "Ministers must publish the updated Integrated Review and set out a contingency plan to cover funding shortfalls which are likely to arise."

An MOD spokesperson said: "We have a fully-funded and affordable Equipment Plan outlining £242bn of defence spending over the next 10 years, which builds in resilience against emerging financial pressures.

"The plan highlights progress on key programmes, including world-leading combat ships built in British shipyards and cutting-edge future fighter jets, to equip our Armed Forces for the coming decades."

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