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Ministry of Defence blows £7BILLION black hole in ‘unaffordable’ equipment budget

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The Ministry of Defence has blown a £7billion black hole in its equipment budget, experts revealed yesterday.

Top Tories and military chiefs have committed to buying 138 F35 joint-strike fighter jets, five light-frigates and at least two Navy supply ships.

But the National Audit Office painted a damning picture of the Whitehall department’s finances.

In a statement it warned: “The Ministry of Defence’s Equipment Plan remains unaffordable and is not sustainable if the Department wants to deliver longer-term value for money.”

The figure dwarfs the £1billion extra cash handed to the MOD in last week’s Budget.

According to the NAO, the Department’s own forecast costs for the Plan exceed its budget by £7billion in the next 10 years.

It forecasts £193.3billion on equipment and support costs against a £186.4billion budget, including a £6.2billion contingency.

“These costs could vary, and in a worst case scenario, should all the identified risks occur, this gap could grow to £14.8billion,” the NAO warned today.

NAO chief Amyas Morse 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.”

Defence minister Stuart Andrew admitted spending is 3.7% over budget in the next decade and said he was “grateful” for the NAO’s report.

He warned ministers would be “rigorously pursuing productivity and efficiency gains” and “prioritising capabilities to meet the changing threat environment”.

Mr Andrew told MPs: “This forecast will vary as risks and opportunities materialise and project plans mature or are changed through management action.”

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