Cost of military operations
16. There is no provision in the Main Estimates for
the costs of operations in Iraq and Afghanistan, nor for peacekeeping
in the Balkans. Provision for these will be included in the Supplementary
Estimates process, as in previous years.[21]
In 2006-07, the MoD brought forward the presentation of estimates
on the costs of operations in Iraq and Afghanistan to the Winter
Supplementary Estimates, rather than waiting for the Spring Supplementary
Estimates as in the past. We trust that this will continue.
17. In previous reports we have repeatedly recommended
that the MoD include provision for operations in the Main Estimates,
rather than leaving them to the Supplementary Estimates.[22]
In our report on the Spring Supplementary Estimate 2006-07, we
concluded:
While we accept that it is difficult for the
MoD to provide accurate estimates of the costs of operations at
the beginning of the financial year, we cannot see how this can
be a sufficient reason for making no forecast at all. We recommend
that the MoD reflect the forecast costs of operations in Iraq
and Afghanistan in its Main Estimates for 2007-08. The MoD could
usefully include in its Estimates Memorandum (which we would intend
to publish) an account of its planning assumptions for the costs
of these operations.[23]
The Government response merely restated its position:
Requests for resources for [operations] have
normally been made in the Supplementary Estimates because costs
are difficult to forecast in fast moving operational circumstance:
Supplementary Estimates are the first occasion when the Department
can reach a reasonably firm conclusion on likely costs.[24]
There was no response to our suggestion that the
MoD might usefully include in its Estimates Memorandum for the
Main Estimates an account of its planning assumptions for the
costs of these operations. The Estimates memorandum contains no
such account, and merely restates that Requests for Resources
to cover the costs arising from operations will be made "in
Supplementary Estimates, as they offer the first opportunity to
present robust costs against a backdrop of fast moving operations".[25]
18. We remain of the view—set out in previous
reports—that the MoD should include estimated costs of military
operations in its Main Estimates, rather than waiting for the
Supplementary Estimates. We acknowledge that these estimates would
be subject to change, but point out that the Estimates process
is designed to allow for changes in forecast expenditure over
the year. Military operations are not unique in being subject
to uncertainty and fast-moving circumstances. Under the present
practice, the MoD is incurring costs in the current financial
year on military operations, without parliamentary approval and
without even providing Parliament with an outline indication of
the costs likely to be incurred. This is entirely unacceptable
and we cannot understand why the MoD fails to see this. We recommend
that—at least—the MoD provide in its estimates memorandum
for the Main Estimates an account of its planning assumptions
for the costs of military operations in the financial year ahead.
We expect a considered response to this recommendation in the
Government's response to this report.
19. Because the Main Estimates contain no provision
for operations in Iraq and Afghanistan, they greatly underestimate
the total expected cost of the MoD's conflict prevention activities.
In 2006-07, provision for operations in 2006-07 was £1,002
million for Iraq and £770 million for Afghanistan.[26]
The outturn has not yet been published, and—judged by previous
years—may be somewhat less. While the costs of operations
in Iraq may be expected to decrease in 2007-08, with the drawdown
of UK Forces in that theatre, it is reasonable to assume that
the cost of operations in Afghanistan will be at least of the
same order.
20. Provision for the cost of peacekeeping operations
in the Balkans has—to date—been requested by the FCO
in the Main Estimates, and transferred to MoD at the Spring Supplementary
Estimates. We have repeatedly recommended that provision for operations
in the Balkans be set out in the MoD's Main Estimates instead.[27]
In response to our report on the Winter Supplementary Estimate
2006-07, the Government stated that it would reconsider this recommendation
in the preparation of Main Estimates for 2007-08.[28]
Clearly it decided against. The FCO's Main Estimate contains
provision for £100 million for peacekeeping in Sub-Saharan
Africa and £101 million for global peacekeeping. The MoD's
memorandum confirms that the cost of Balkans operations is contained
in the FCO's global peacekeeping provision, and will be transferred
to the MoD by Supplementary Estimate. It states that the current
estimate is that Balkans operations will cost £22.5 million
in 2007-08.[29] This
is significantly less than the £53 million requested in 2006-07,
in line with the announced withdrawal of most of the UK Forces
in the Balkans.[30]
It is disappointing that the Government has not accepted
our recommendation that provision for operations in the Balkans
be set out in the MoD's Main Estimate, instead of in the FCO's
Estimate. We note that the Government current estimate of the
cost of operations in the Balkans in 2007-08 is £22.5 million.
Conclusion
21. We recommend that the House of Commons approve
the MoD's Main Estimate, and have identified no issues which require
a debate before it does so. But the House should be aware that,
because of the omission of the costs of military operations in
Iraq and Afghanistan, the Main Estimates greatly underestimate
the total expected cost of the MoD's activities in 2007-08.
1 Central Government Supply Estimates 2007-08, Main
Supply Estimates, 30 April 2007, HC 438 Back
2
HC (2006-07) 438, pp 313-335 Back
3
Ibid., pp 337-347 Back
4
See Ev 1 Back
5
See Ev 8 Back
6
HC (2006-07) 438, p 15 and p 316 Back
7
A full description of what costs fall under each of the RfRs is
given in the Main Estimates, HC (2006-07) 438, p 315 Back
8
HC (2006-07) 438, pp 317-319 Back
9
Ev 1 and Ev 2, para 7 and HC (2006-07) 438, p 313, paras 2-3 and
p 317 Back
10
Ev 2, para 7 and HC (2006-07) 438, p 317 Back
11
HC (2006-07) 438, p 315 Back
12
Defence Committee, Tenth Report of Session 2006-07, Cost of
military operations: Spring Supplementary Estimate 2006-07,
HC 379, para 3 Back
13
Defence Committee, Twelfth Special Report of Session 2006-07,
Cost of military operations: Spring Supplementary Estimate
2006-07: Government Response to the Committee's Tenth Report of
Session 2006-07, HC 558, Appendix, response to recommendation
1 Back
14
HC (2006-07) 438, p 319; Ev 3, para 10 Back
15
Ev 9, answer 4 Back
16
Ibid. Back
17
HC (2006-07) 438, p 319, pp 351-352, and p 368 Back
18
Ev 9, answer 4 Back
19
Ev 10, answer 4 Back
20
Ibid. Back
21
Ev 3 and Ev 4, para 4 Back
22
For example, Defence Committee, Fourth Report of Session 2005-06,
Costs of peacekeeping in Iraq and Afghanistan: Spring Supplementary
Estimate 2005-06, HC 980, para 15; Ninth Report of Session
2005-06, Ministry of Defence Main Estimates 2006-07, HC
1366, para 9 Back
23
HC (2006-07) 379, para 4 Back
24
HC (2006-07) 558, Appendix, response to recommendations 2 and
3 Back
25
Ev 3, para 11 Back
26
HC (2006-07) 379, paras 6 and 12 Back
27
For example, HC (2005-06) 980, para 17; HC (2005-06) 1366, para
12 Back
28
Defence Committee, Fourth Special Report of Session 2006-07, Costs
of operations in Iraq and Afghanistan: Winter Supplementary Estimate
2006-07: Government Response to the Committee's Third Report of
Session 2006-07, HC 317, para 4 Back
29
Ev 11, answer 5 Back
30
See HC (2006-07) 379, paras 5 and 16-17 Back
