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07 Jul 08. Out-of-date forecasts and estimates for costs of military operations in Iraq and Afghanistan “unsatisfactory”

“No proper relation seems to exist between operational decisions, political announcements, and financial scrutiny. This simply cannot be satisfactory. It is essential that the House has available to it accurate and up-to-date forecasts before it is asked to vote on the defence Estimates”: this is one of the main conclusions of a Report from the House of Commons Defence Committee published today (Eleventh Report, Session 2007-08, Ministry of Defence Main Estimates 2008-09, HC885).

This Report is published before the House of Commons is asked today to approve the Government’s expenditure plans for the current financial year (the Main Estimates).

The Committee examines these plans in the light of its series of Estimates and Supplementary Estimates Reports published so far during this Parliament. The Committee points out that the Ministry of Defence’s request for resources of £34.5 billion in the Main Estimates does not include the expected costs of military operations in Iraq and Afghanistan and significantly underestimates the total expected cost of the MoD’s activities in 2008-09. The MoD has, however, provided a forecast to the Committee of this cost, some £2 billion. The forecast outturn from the last financial year, 2007-08, was £2.38 billion.

The Committee calls on the MoD to give more detail in its forecasts in future; it does, however, commend the MoD for providing for Balkan operations in its own Main Estimate for the first time.

However, the Committee is concerned about the robustness of the figures provided by the MoD in its forecasts and is dissatisfied with how out-of-date the Supplementary Estimates figures were during the last financial year: the figures placed before the House for approval at the Winter and Spring Supplementary Estimates 2007-08 were based upon forecasts that were four and almost three months out-of-date respectively.

The Rt Hon James Arbuthnot MP, Chairman of the Defence Committee, says: “We are calling on the House to approve the Main Estimates for the MoD. We have no objection to the cost of our military operations overseas. Our troops need to be supported in the difficult challenges they face.

“However, it cannot be right that the House is called upon during each financial year to approve sums which the MoD knows are significantly out-of-date and do not represent its latest assessments of the costs of operations abroad. The House requires more accurate assessments of costs when it approves figures at the time of the Estimates or Supplementary Estimates. Often, the sums the House is called on to approve bear no direct relation to operational realities at the time. This is simply not satisfactory.”

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