A Balanced Budget - The Ministry of Defence has published details of how it will equip the Army, Royal Navy and Royal Air Force over the next 10 years and how this will be funded.     For the first time the Government has set out a fully funded Defence Equipment Plan totalling almost £160 billion.     The publication of the equipment plan follows the Defence Secretary’s announcement last year that the Defence Budget has been balanced for the first time in more than a decade and that the MoD is taking a new approach to financial planning.   Within the equipment and equipment support budget for the first time a contingency of £4.8 billion exists to manage cost variation and protect existing projects.     In addition, within the £160 billion, £8 billion is currently unallocated and will be allocated as new equipment priorities emerge.   The equipment plan includes the following major investments in military capabilities and their support over the next ten years:

·         £35.8 billion on submarines and the nuclear deterrent, including a total of seven (7)  ASTUTE Class Attack Submarines, and developing a replacement for VANGUARD Class Ballistic Missile Submarines.

•       £17.4 billion on ships, including the QUEEN ELIZABETH Class Aircraft Carriers, six (6) new Type 45 Destroyers and the development of the Type 26 Global Combat Ship.

•       £18.5 billion on combat air power, including LIGHTNING II and TYPHOON fast jets and unmanned aerial vehicles.

•       £13.9 billion on aircraft for air-to-air refuelling, passengers and heavy lift, such as VOYAGER and Airbus A400M.

•       £12.3 billion on armoured fighting vehicles, including WARRIOR, SCOUT and other land equipment.

•       £12.1 billion on helicopters, including CHINOOK, APACHE, PUMA and WILDCAT.

•       £11.4 billion on weapons, including, for example, missiles, torpedoes and precision guided bombs.

 In the 2010 Strategic Defence and Security Review, special forces were spared cutbacks which overall saw the defence budget fall by around 7.7% cent to around £33.5billion a year between 2010-11 and 2014-2015.    The about listing of the “Equipment Plan” tells us nothing new in terms of new equipment but the Prime Minister has suggested that totals would be increased “year on year” from 2015, following the next Whitehall spending review, but the Defence Secretary, later said the increase would apply only to equipment.

The Chairman of the Commons Public Accounts Committee (Margaret Hodge MP), recalled that major MoD projects had previously cost 40 per cent more than originally anticipated stating "The Ministry's track record in forecasting accurately the cost of its largest projects hardly inspires confidence,"  and went on to say "Given this past performance, I am dismayed that the Ministry is still taking an over-optimistic view to putting a price on risk and uncertainty.   "The ministry's own internal review warned that this plan understates costs by as much as £12.5bn. If this proves to be the case, it will eat up the entire £8bn unallocated budget that is viewed by the Chief of the Defence Staff as necessary to deliver the full intent behind the future shape of the armed forces."

The Shadow Defence Secretary (Jim Murphy MP) said the report confirmed his fears. "Philip Hammond has failed his own test of balancing the MOD books," he said. "This supposed 'mission accomplished' fact is more like a 'wishful thinking' claim.    "The government has not provided a full list of equipment that is accounted for. The financial baseline against which projections are made is unknown. This report covers less than half of defence expenditure. The government's claims don't add up."

This observer cannot help but ask what is the difference between a balanced budget (a much used phrase) and any other form of budget ? ....... unless it is fully funded and in many ways we are no further forward that we were before.