UK armed forces face £17bn black hole in equipment budget

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The equipment plan for Britain's armed forces is 'unaffordable' and faces its largest budget black hole for more than a decade, according to a damning report by parliament's spending watchdog.

Article originally published by The Financial Times. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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04 Dec 2023

The National Audit Office said the Ministry of Defence estimated a shortfall in its budget for new weapons and equipment over the next 10 years of £16.9bn — the largest deficit in the department’s annual 10-year forecasts since they were first published in 2012. In a worst-case scenario, it could reach £29.8bn.

At the end of March this year, estimated costs were £305.5bn compared with a budget of £288.6bn.

The watchdog said one of the main causes of the shortfall was increased costs in nuclear and naval programmes, which combined had risen by £54.6bn.

The report added that the UK’s soaring inflation had contributed to the equipment plan’s increased costs, with the MoD not receiving additional funding to cover it, forcing the different services to “manage the effects within their own budgets”. The department estimated in August that inflation