Army cannot afford to replace ageing tanks

The total cost of all the MOD’s projects in the Equipment Plan for the next decade comes in at £270.2 billion - Jack Eckersley/Ministry of Defence
The total cost of all the MOD’s projects in the Equipment Plan for the next decade comes in at £270.2 billion - Jack Eckersley/Ministry of Defence

The Army does not have enough money to replace its old tanks with new vehicles, the National Audit Office (NAO) has found.

In a new report the public spending body say the Ministry of Defence’s (MOD) assessment that its “2022-2032 equipment plan is affordable” is optimistic. It added that the department “does not fully reflect the impact of growing pressures on costs”.

In the report it reveals that the MoD has only allocated to partly fund Boxer, deemed as effectively a tank on wheels, which is due to replace the Challenger tank. However, the NAO found that “available funding does not enable the current Land Fleet Requirement that the Army needs to fulfil Integrated Review capability requirements”.

The 2021 Integrated Review set out the government’s revised assessment of security risks and the capabilities that the Armed Forces need.

However, instead of the 1,305 Boxers required, the MoD has only allocated funding for 1,016 vehicles.

The funding for 75 of the M270 Multiple Launch Rocket System (MLRS) has also stopped short at 61.

‘Risks in the delivery of a commando force’

Some programmes are completely missing from the plan, including Type 32 frigates and Multi Role Support Ships (MRSS) and Enabling Landing Ship Dock Auxiliary, which are designed to transport troops and equipment.

Meanwhile the highly anticipated Future Commando Force, set out in the Integrated Review to be more “lethal, survivable and sustained” amphibious capability, has only been partly funded in this report. The NAO said this created “additional risks in the delivery of a commando force”.

The total cost of all the MOD’s projects in the Equipment Plan for the next decade comes in at £270.2 billion, falling to £239.8 billion once management action has been taken to reduce costs.

The report also found that the MoD has “not yet reflected the impact of growing external cost pressures, such as rising inflation and the impact of the conflict in Ukraine, on the Plan’s affordability”.

Inflationary pressures

It says that whilst the MoD estimated, based on March 2022 forecasts, that project costs could be up to £2.1 billion higher because of inflationary pressures, “this is not reflected in the assessment that the Plan is affordable over ten years”.

It adds that inflation has increased further since the March forecast, “meaning that the affordability position reported in the Plan has already been overtaken by events”.

The MoD is quantifying these external pressures, and intends to reflect them in the next planning round, along with future uncertainties. It will also assess the implications of the Ukraine conflict, for example on what capabilities, stockpiles and levels of resilience are needed to respond to changing threats.

Gareth Davies, the head of the NAO, said: “Pressures on costs continue to grow, and the MoD will need to make difficult decisions on priorities to live within its means, and retain the flexibility needed to respond promptly to the changing pressures that it faces.”

A Ministry of Defence spokesman said: “We have a fully-funded and affordable Equipment Plan outlining £242 billion of Defence spending over the next 10 years, which builds in resilience against emerging financial pressures.

“The Plan highlights progress on key programmes, including world-leading combat ships built in British shipyards and cutting-edge future fighter jets, to equip our Armed Forces for the coming decades.”