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.

The Ministry of Defence (MoD) must put into the public domain the full cost of military operations in Afghanistan. This report notes that although there are obvious standing expenses, the Afghan deployment brings with it additional costs in terms of training opportunities cancelled or deferred and equipment wear and tear that will eventually have to be met. The Committee is also disappointed by the Department's inability to provide the detailed information requested about expected write-offs such as Nimrod and the Type 22 Frigate. The MoD was not clear but the Committee deduce that some of the 2010-11 provision for depreciation and write-offs will be carried forward to 2011-12 or even later years. There is also concern that the voluntary redundancy programme has been over-subscribed and that applications (or even resignations) have been received from individuals who might have achieved high command and asks the MoD to show how it will ensure that the voluntary redundancy process does not impact on the future leadership capability and effectiveness of the Armed Services

The MoD sought, in the Estimate, a net increase in Capital and Resource Expenditure (Departmental Expenditure Limits-DELs) of £2,804 million which generated an additional cash requirement of £644 million. It also sought a reduction in Annually Managed Expenditure of some £1,063 million. The Committee welcomes the MoD's efforts to improve the management of assets and stock. They recognise that such exercises and the implementation of the Strategic Defence Security Review are likely to result in significant write-offs, but we would expect the MoD to have a greater understanding of the financial implications of these write-offs and, therefore, greater certainty of the non-cash costs by the time the Main Estimates and the Supplementary Estimates for 2012-13 are prepared. They recommend that, if the way expenditure is classified is changed in future, the MoD should provide a comparison of expenditure on a like-for-like basis between years within its memorandum on the Supplementary Estimates and should also provide full details of the items and amounts affected and the reasons for the changes. In general, while the Committee has no argument with the content of the MoD's Supplementary Estimate, it is unreasonable to expect Committees and Parliament to scrutinise the Supplementary Estimates in less than three weeks. More time is needed to consider the Supplementary Estimate, the associated memorandum and the MoD's responses to questions on the Estimate.

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

Through interviews with key policy practitioners on both sides of the Atlantic, this study reveals the complex picture of counter narcotics strategy in Afghanistan. It highlights the key points of cooperation and contention, and details the often contradictory and competitive objectives of the overall war effort in Afghanistan. Western counter-narcotics policies in Afghanistan failed dismally after opium poppy cultivation surged to unprecedented levels. The Anglo-American partnership at the centre of this battleground was divided by competing and opposing views of how to address the opium problem, which troubled the well-established Anglo-American relationship.

Evidence given to the Committee showed that Armed Forces personnel and their families valued accommodation very highly and saw it as part of their terms and conditions of employment and as promoting unit cohesion and support for families when personnel were deployed on operations. The provision of accommodation was particularly important for those who were required to be mobile; it was the only option allowing families to live together. It is also clear that for many personnel, Service Families Accommodation is the only affordable housing solution. Indeed, the Families Federation said that inquiries and complaints about accommodation account for more than half of the regular communications they receive. So when the Committee considered the MoD's decision to halt upgrade work on accommodation for the next three years, they saw it as damaging to the Covenant and recommended that the MoD look again urgently at the stoppage, which, in any case, could well be a false economy. In early 2012, the MoD began work on the New Employment Model, looking at how Armed Forces personnel are employed. One element of this is the Future Accommodation. The Committee recommends that this project should be sufficiently flexible to meet the needs of the three individual Services by allowing sufficient variation to meet their differing needs. They should also take account of the needs of personnel at different stages in their lives and careers. Given the fragility of morale we recommend that the MoD should use a more effective communications strategy to keep Service families in the picture

This book analyses UK defence as a complex, interdependent public-private enterprise covering politics, management, society, and technology, as well as the military. Building upon wide-ranging applied research, with extensive access to ministers, policy makers, senior military commanders, and industrialists, the book characterises British defence as a phenomenon that has endured extensive transformation this century. Looking at the subject afresh as a complex, extended enterprise involving politics, alliances, businesses, skills, economics, military practices, and citizens, the authors profoundly reshape our understanding of ‘defence’ and how it is to be commissioned and delivered in a world dominated by geopolitical risks and uncertainties. The book makes the case that this new understanding of defence must inevitably lead to new policies and processes to ensure its health and vitality. This book will be of much interest to students of defence studies, British politics, and military and strategic studies, as well as policy makers and practitioners.