This month, some of the detail on PR12 (Planning Round 2012) was announced by the MOD. It has taken some time to get here. Every year, the MOD says that the current planning round has been the most difficult ever – this is certainly true for PR12. Issues such as which variant of the F35 to select have disrupted the process as has defence transformation. Whilst the numbers quoted in PR12 are tough for both the MOD and its suppliers, the positive news is it has ushered in ‘certainty’ in the EP and the MOD has been able to think strategically about equipment for the first time in recent memory – engendering a degree of confidence on the part of the MOD and hopefully its supply base.
The MOD will spend almost £160 billion on new equipment and data systems, and their support, over the next 10 years. This spending hinges on the planning assumption (agreed with the Treasury in July 2011) of a 1% per annum real increase in the equipment and support budget from 2015. New equipment, data systems, and their support will amount to approximately £152 billion over the next ten years. This £152 billion will include a contingency of £4 billion. Furthermore, £8 billion will be made available as unallocated headroom, which will fund the additional capabilities the MOD requires to deliver Future Force 2020. Finally, no project will be allowed to go into the EP (Equipment Programme) without a ten year budget line to cover both its acquisition and support costs.
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Technorati Tags: Defence Budget, EP, MoD, PR12