Phillip Hammond, Secretary of State for Defence will be making a statement to the House of Commons later, that as usual, has been widely reported/leaked.
So it would seem that the infamous black hole has been eliminated and the MoD finances are in balance.
I always thought the ‘black hole’ would become a catch all excuse for, well, everything, but good news on face value.
A couple of things spring immediately to mind though;
- There has been precious little detail on what the £38 billion figure actually comprised of
- There has been even less detail on exactly how the MoD have managed to eliminate it
- What controls are in place to stop new holes being dug
An interview at the weekend indicates measures to at least address the last point, he said;
For the first time in the defence budget we’ve got a reserve in each year, which means that if something comes up we’ll be able to manage it, drawing on our own reserve rather than having to cancel or postpone equipment. We’ve also put a sizeable contingency into the equipment plan, which has never been done before, so that if we do have a problem . . . we can manage it without destroying the rest of the programme or running crying to the Treasury
Although rather brilliant news the rather incredulous part of that statement is, all of.
How is it possible to manage a budget without a contingency?
I find that simply staggering.
Will be interesting hearing what the SoS Defence has to say but despite the reservations, this is good news for a sustainable MoD.