The MoD’s 10-year equipment plan “remains unaffordable and is not sustainable” despite the department improving its understanding of affordability risks, the National Audit Office has claimed.
The department, which received £1bn in last week’s Budget, estimated that its 10-year plan could exceed its budget by £7bn over that time period - £193.3bn from a budget of £186.4bn.
But the NAO said that in a “worst case scenario” this gap could grow to £14.8bn.
The watchdog said: “The department has improved its understanding of affordability risks, but the NAO still lacks confidence in the robustness of some of its underlying assumptions, particularly around efficiencies.”
Published on Monday, the report said that shortfalls in the plan could not be made up by redirecting funds from elsewhere in the department, due to financial constraints.
The NAO recommended that the department decides which programmes to defer, de-scope or delete as soon as possible.
Amyas Morse, head of the NAO, said: “The equipment plan 2018-28 shows that the Ministry of Defence has a clearer understanding of the affordability issues that it faces, but it equally shows how urgently it needs to get on and tackle them.”
