The MOD's ten-year Equipment Plan sets out its forecast expenditure plans to deliver and support the equipment the Armed Forces require to meet the objectives set out in the National Security Strategy over the ten years from 1 April 2012 to 31 March 2022 and covers a budget of £159 billion. Since the beginning of 2011 the Department has substantially revised the way it compiles and manages the Equipment Plan. It has taken difficult decisions to address what was estimated to be a £74 billion gap between the Department's forecast funding and cost of the defence programme as a whole and to try to bring the Equipment Plan itself into balance. These include cutting unaffordable expenditure and revising the way it compiles and manages the Equipment Plan to include greater contingency to better manage cost variability. The Equipment Plan is based on forecasts of costs and funding. The NAO has therefore constructed an affordability assessment model that breaks the Department's assertions down into assumptions covering costs and funding against which the realism of the Department's approach can be tested. This is the first year the NAO has undertaken this engagement and it was aware from the beginning of issues, which would limit the confidence that could be taken from the Department's Statement to Parliament on the cost and affordability of the Equipment Plan. In future years, as the Department's approach to producing the Equipment Plan matures, the NAO intends to extend the scope of its work

The Department's work to address the affordability gap around the equipment budget and costs appears to have had a positive effect. However, there remain risks to affordability, most significantly around the half of the budget relating to equipment support costs which were not subjected these to the same level of detailed scrutiny as the procurement costs. The Department also does not understand the implications of its £1.2 billion underspend on the Equipment Plan in 2012-13. With the exception of the Queen Elizabeth Class aircraft carriers, there have been no significant cost increases and only minimal in-year delays. In the last year, there was a net increase in costs of £708 million in respect of the 11 projects in the review. The main contribution to this was a £754 million increase in the cost of carriers. Three of the projects the report examined experienced delays during the year, together amounting to 17 months. A third of projects this year reported delays compared to over half of the projects in last year's report. However, the NAO is unable to report on timings for two of the 11 projects - Lightning II and Specialist Vehicles -because the Department has not yet given final approval. This report also includes an examination of the MOD's Complex Weapons Programme, which aims to achieve net financial benefits of £1.2 billion over ten years. Noting that these benefits have already been 'banked', if there are delays or cancellations some of these benefits may be lost

The Ministry of Defence has now reported on the affordability of its ten-year forward plan to purchase and support military equipment (the Equipment Plan) totalling some £159 billion, as well as its progress on delivering its largest projects in 2012. The Department has made a good start but there are concerns about over-optimistic assumptions, the completeness and robustness of support cost estimates, and risks to capability. The affordability of the Plan is based on an agreement between the Department and HM Treasury that it will receive a one per cent annual increase in its equipment budget over the period from 2015-16 to 2020-21. If this is now not achieved in the current fiscal circumstances then the current plan may well be unaffordable. The addition of a contingency provision of £4.8 billion is a positive step, however this may not be sufficient to absorb cost growth. In addition, the Department lacks a robust understanding of the support costs, and the associated risks, including the size of the budget that may be required to recover equipment from Afghanistan. The Department also faces a particular challenge in delivering projects to agreed timescales. Ultimately, the Department bears the risk of these delays in terms of military capability and we need greater transparency on these risks and how they are mitigated. This includes the Department being clear on the impact on capability if the £8 billion that is currently unallocated in the budget cannot be used for purchasing new equipment because it is needed to absorb cost growth

The Government has failed to deliver meaningful competition in the procurement of its £1.2 billion rural broadband programme, leaving BT effectively in a monopoly position. Despite warnings the Department for Culture, Media and Sport has allowed poor cost transparency and the lack of detailed broadband rollout plans to create conditions whereby alternative suppliers may be crowded out. Whilst BT claims it is making further concessions, this is not impacting on rural communities. Local authorities are still contractually prevented from sharing information to see if they are securing best terms for the public money they spend. Communities can still not access the detailed data they need to understand whether they will be covered by BT's scheme in their area. The lack of transparency on costs and BT's insistence on non-disclosure agreements is symptomatic of BT's exploiting its monopoly position. The Department needs to work urgently with all local authorities to publish detailed mapping of their implementation plans, down to full (7-digit) postcode level. The information should include speed of service, as soon as that is available. The Department should collect, analyse and publish data on deployment costs in the current programme, to inform its consideration of bids from suppliers under the next round of fundingMargaret Hodge was speaking as the Committee published its 50th Report of this Session which, on the basis of evidence from the Department for Culture, Media and Sport and BT, examined the roll out of the rural broadband programme

For the sixth successive year, the Ministry of Defence Accounts were qualified. The Qualifications covered non-compliance with international reporting standards on the treatment of some contracts; lack of audit evidence on the valuation of inventory (worth some £3 billion) and of capital spares (worth some £7 billion); and on the regularity of the Accounts because of the failure to obtain approval for the remuneration package of the Chief of Defence Materiel. The MoD was also five months late in submitting its audited accounts to Parliament. The National Audit Office had found errors in its sample examination of accruals and so the MoD decided to resolve these problems before submitting the accounts. The MoD said they did not have the necessary expertise to manage the financial complexity that featured in the implementation of the Strategic Defence and Security Review so sought assistance. The MoD should ensure its people have the right skills to deal with all financial problems so that they do not need to bring in expensive external accountants. There is also concern about the MoD's reluctance to estimate the full costs of its operations in Afghanistan, Iraq and Libya. The NAO did not consider that the MoD has adequate information, especially with respect to recording the cost of its activities and outputs, to run its business effectively. The MoD should set out its commitment to improving its management information. It is also vital that defence spending remains at more than 2 per cent of GDP in line with the UK's NATO commitment.

In pursuing unpaid tax, HMRC has not clearly demonstrated that it is on the side of the majority of taxpayers who pay their taxes in full. Last year the Department collected less tax in real terms than it managed to collect in 2011-12. This was despite the stated ambition to crack down on tax avoidance. The tax gap as defined by HMRC did not shrink, but in 2011-12 grew to £35 billion. Furthermore, this figure does not include all the tax revenue lost. HMRC pursues tax owed by the smaller businesses but seems to lose its nerve when it comes to mounting prosecutions against multinational corporations. It predicted that it would collect £3.12 billion unpaid tax from UK holders of Swiss bank accounts and this figure was built into budget estimates, but in 2013-14 it has so far secured just £440 million. HMRC aims to make the UK more attractive to business but the incentives to international corporations may also enable them to avoid tax. HMRC needs to strike the right balance between support and enforcement. The implementation of the Real Time Information system has been encouraging overall though some small businesses are continuing to struggle. It is of concern that HMRC is planning from April 2014 to fine companies even though some face continuing challenges. The successful implementation of Universal Credit depends on RTI continuing to work properly but the system does not have full disaster recovery arrangements. System failures could have serious consequences for payments to individuals

In this report the Public Accounts Committee examines DCLG and DWP's programmes to help families facing multiple challenges. In 2006, the Government estimated that there were 120,000 families in England facing multiple challenges, such as unemployment and poor housing, crime and antisocial behaviour. The estimated cost to the taxpayer of providing services to support these families is £9 billion a year, of which £8 billion is spent reacting to issues and £1 billion in trying to tackle them. In 2012, DCLG and DWP each introduced separate programmes to help these families. DCLG's Troubled Families programme, with a central government budget of £448 million, aims to 'turn around' all 120,000 families by May 2015. DWP's Families with Multiple Problems programme, with a budget of £200 million, seeks to move 22% of those joining the programme into employment by March 2015. There was no clear rationale for the simultaneous introduction of two separate programmes, which focused on addressing similar issues. The integration of the programmes at the design phase was poor, leading to confusion, and contributing to the low number of referrals to the DWP's programme. But the good practice evident in DCLG's Troubled Families programme, demonstrates how central and local government agencies can work together effectively. Data sharing is critical to identifying the families most in need of the support available. Both departments should publish, alongside details of the programmes' progress against their respective targets, details of the wider benefits and financial savings that they have identified.