UK has no ‘credible’ plan to fund military equipment as multibillion-pound deficit revealed, report
The UK has no “credible” plan to buy all the weapons it needs after a huge jump in the cost of the nuclear deterrent helped to create a record funding gap, a group of MPs has warned.
Inflation and a weak pound also contributed to the hole of at least £16.9bn in a rolling, 10-year plan to procure equipment for the Army, Royal Navy and Royal Air Force, the Public Accounts Committee said in a scathing report.
The actual deficit is likely to be closer to £30bn if all the capabilities required by the Army – rather than only those it can afford – are included in the costs, the MPs said on Friday.
The committee accused the Ministry of Defence (MoD) of putting off painful decisions about what equipment programmes would have to be cancelled for the plan to be affordable.
Instead, defence chiefs were found to have been basing their sums around the optimistic belief that the government would boost defence spending to 2.5% of national income from around 2.1% – even though there is no guarantee when this will happen.
The findings came after MPs and military experts expressed dismay at a failure by the Treasury to increase defence spending in the Spring Budget despite mounting security threats and at a time when friends and foes are ramping up their own military investments.
Dame Meg Hillier, the chair of the Public Accounts Committee, said: “In an increasingly volatile world, the Ministry of Defence’s lack of a credible plan to deliver fully funded military capability as desired by government leaves us in an alarming place.”
She said this was not a new problem, with defence procurement characterised by ballooning costs and delays.
‘Clear deterioration in affordability’
“We’re disappointed that not only are the same problems we’re used to seeing on display here, but they also appear to be getting worse,” Dame Hillier said.
“Despite a budget increase, this year’s plan shows a clear deterioration in affordability. The MoD must get a better grip, or it won’t be able to deliver the military capabilities our country needs.”
The committee said the £16.9bn gap in affordability was the largest since the MoD started publishing its rolling 10-year equipment plan in 2012.
It came despite the government increasing planned spending on military equipment over the ten years to 2033 – the period that the MPs were examining – by £46.3bn to £288.6bn from 12 months earlier.
However, any hope of balancing the books was then sunk by a £38.2bn rise in funding over the same period for the Defence Nuclear Organisation – which is charged with renewing a fleet of nuclear-armed submarines and the missiles and warheads it carries.
Royal Navy’s Astute Class nuclear submarine. Pic: PA
The MPs voiced concern the spiralling costs for what is the UK’s top defence priority could further squeeze the budget for its conventional military capabilities.
Adding to the pressure, the MoD said inflation would push up costs for the equipment programme by £10.9bn over the decade, while unfavourable foreign exchange rates – such as when buying equipment from US companies when the pound is weak against the dollar – would add a further £2.2bn.
“The MoD, however, is unwilling to address this deficit by making major decisions about cancelling programmes,” the report said.
“It asserts that such decisions should wait until after the next Spending Review, which is expected in 2024 but might conceivably be delayed by the forthcoming general election, the timing of which is also uncertain.”
Please use Chrome browser for a more accessible video player
UK’s ‘warfighting readiness’ in doubt
Read more:
UK to supply 10,000 more drones to Ukraine
Rolls-Royce to create hundreds of nuclear submarine jobs in Scotland and Wales
Shortfalls across the board
There was also a shortage of skilled officials to oversee the delivery of complex procurement programmes – the equipment plan covers some 1,800 different projects to buy everything from communications gear to warships.
In a sign of strain, only two out of 46 projects included in the Government Major Projects Portfolio – so the most important equipment programmes – are ranked as being highly likely to be delivered to time, budget and quality.
By contrast the successful delivery of five other big projects – including new communications technology, nuclear submarine reactors and missiles – are rated as unachievable.
Asked about the findings of the report, a Ministry of Defence spokesperson said: “Our Armed Forces stand ready to protect the UK and as a leading contributor to NATO, we continue to defend our national interests and those of our allies.
“We are delivering the capabilities our forces need – significantly increasing spending on defence equipment to £288.6 billion over the next decade, introducing a new procurement model to improve acquisition, and confirming our aspiration to spend 2.5% GDP on defence.
“By maintaining part of our equipment plan as uncommitted spend, we have the flexibility to better adapt to changing technology and emerging threats.”
Homelessness charities have warned that ministers are “falling short of what is desperately needed to end Britain’s homelessness crisis”.
It comes as the government published its new plan to tackle rough sleeping in Britain, which pledges £3.5bn of funding to crackdown on the issue.
But charities have said Labour’s National Plan to End Homelessness “falls short” and contains “important gaps”, meaning the party will not be able to achieve their stated goal of halving the number of homeless people by 2029/30.
Crisis, an organisation that supports the homeless, also argues that only £100m of the funding announced in the strategy is new.
Meanwhile, Labour MP Paula Barker, who co-chairs the All-Party Parliamentary Group (APPG) for ending homelessness, has told Sky News that the strategy has a “depressing lack of meat on the bone”, looks like it has been “rushed out”, and has left her “disappointed”.
It comes as Shelter warns that 382,618 people in England – including a record 175,025 children – will be homeless this Christmas, equivalent to one in every 153 people.
Please use Chrome browser for a more accessible video player
Working but homeless: Daniel’s story
What does the government’s plan to reduce rough sleeping involve?
The government has made three key pledges in its new plan, unveiled on Wednesday evening.
It says that it is aiming to halve the number of long-term rough sleepers by the end of the parliament, reduce the time families spend living in bed and breakfasts (B&Bs), and prevent more people from becoming homeless in the first place.
To achieve this, the party has set out numerous new measures, schemes and extra funding.
A new £124m supported housing scheme is also being established, and the government hopes that it will help get 2,500 people in England off the streets.
Housing Secretary Steve Reed said homelessness is “one of the most profound challenges we face”, and suggested that the strategy will build “a future where homelessness is rare, brief, and not repeated”.
How has the plan been received?
Ms Barker told Sky News she welcomes “the scale of investment”, but is “disappointed by what I have seen”.
The Labour MP explained: “From what I have seen so far, it leaves more questions than it answers – where are the clear measures around prevention? Where is the accommodation for people sleeping rough coming from – has it already been built? What about specialised provision for those fleeing domestic abuse?
“We needed this strategy to be bold.”
MP Paula Barker is ‘disappointed’ by what she has seen
Meanwhile, organisations working to support those on the streets have welcomed the plan for its focus on the issue, but warn it leaves it “almost impossible” for many families to avoid homelessness.
Matt Downie, the chief executive of Crisis, said: “Housing benefit remains frozen until at least 2030; there is no coherent approach for supporting refugees and stopping them becoming homeless; and we hear no assurances that the new homes government has pledged to build will be allocated to households experiencing homelessness at the scale required.
“There is a long way to go. Ministers are taking steps in the right direction, but falling short of what’s desperately needed to end Britain’s homelessness crisis.”
An exhibit organised to highlight the contrast between the Christmas period and an estimated 23,500 young people who will homeless. Pic: PA
Sarah Elliott, head of Shelter, also warned the proposals do not go far enough, saying: “Until a lot more of these social homes are built, one of the only ways to escape homelessness is if you can afford to pay a private rent.
“We know from our frontline services this is almost impossible to do when housing benefit remains frozen, and that is where the homelessness strategy falls short.”
Centrepoint, a charity that supports young people facing homelessness, said that the strategy is “an important step”, and could be “transformative”. But it added that “gaps in the government’s approach remain”, and said increases in funding “don’t face up to the scale of homelessness”.
The Conservatives have said that the strategy means Labour “has completely failed on homelessness”.
Paul Holmes, shadow housing minister, said the number of households and children in temporary accommodation has risen to “record levels”, and pointed to the government’s “abysmal record on house-building” and tackling immigration.
Australia’s securities regulator has finalized exemptions that will make it easier for businesses to distribute stablecoins and wrapped tokens.
The Australian Securities and Investments Commission (ASIC) on Tuesday announced the new measures, aimed at fostering innovation and growth in the digital assets and payment sectors.
It stated that it was “granting class relief” for intermediaries engaging in the secondary distribution of certain stablecoins and wrapped tokens.
This means that companies no longer need separate, and often expensive, licenses to act as intermediaries in these markets, and they can now use “omnibus accounts” with proper record-keeping.
The new exemptions extend the earlier stablecoin relief by removing the requirement for intermediaries to hold separate Australian Financial Services (AFS) licenses when providing services related to stablecoins or wrapped tokens.
Leveling the playing field for stablecoin issuers
The regulator stated that these omnibus structures were widely used in the industry, offering efficiencies in speed and transaction costs, and helping some entities manage risk and cybersecurity.
“ASIC’s announcement helps level the playing field for stablecoin innovation in Australia,” said Drew Bradford, CEO of Australian stablecoin issuer Macropod.
“By giving both new and established players a clearer, more flexible framework, particularly around reserve and asset-management requirements, it removes friction and gives the sector confidence to build,” he continued.
Related: Australia risks ‘missed opportunity’ by shirking tokenization: top regulator
The old licensing requirements were costly and created compliance headaches, particularly for an industry awaiting broader digital asset reforms.
“This kind of measured clarity is essential for scaling real-world use cases, payments, treasury management, cross-border flows, and onchain settlement,” added Bradford.
“It signals that Australia intends to be competitive globally, while still maintaining the regulatory guardrails that institutions and consumers expect.”
Angela Ang, head of policy and strategic partnerships at TRM Labs, also welcomed the development, stating, “Things are looking up for Australia, and we look forward to digital assets regulation crystallizing further in the coming year — bringing greater clarity to the sector and driving growth and innovation.”
Global stablecoin growth surges
Total stablecoin market capitalization is at a record high of just over $300 billion, according to RWA.xyz.
It has grown by 48% since the beginning of this year, and Tether remains the dominant issuer with a 63% market share.
Magazine: XRP’s ‘now or never’ moment, Kalshi taps Solana: Hodler’s Digest
A group of Republicans has called foul after the US House passed a massive defense spending bill on Wednesday that omitted a ban on central bank digital currencies despite promises it would be included.
“Conservatives were promised — explicitly — that strong anti-Central Bank Digital Currency (CBDC) language would be included in the National Defense Authorization Act (NDAA). That promise was broken,” GOP Representative Keith Self wrote to X on Wednesday.
The House voted 312-112 to pass the NDAA on Wednesday, sending the $900 billion annual military funding bill to the Senate in a bid to have it passed before the end of the year.
Self had filed an amendment on Tuesday to include a CBDC ban, which had been removed from the bill, but it failed to advance and did not see a vote on the House floor.
Self said a group of Republicans was “assured that anti-CBDC language would be included. Instead, we have been forced into a take-it-or-leave-it bill that breaks that promise. Without that language, I’m inclined to leave it.”
The more than 3,000-page bill is considered must-pass legislation and typically sees non-defense-related amendments that could otherwise be stalled or heavily revised if passed as standalone bills.
In July, House Republican leaders cut a deal with a group of party hardliners to put a CBDC ban in the defense spending bill after the group refused to move forward with three crypto bills unless a CBDC ban was guaranteed.
The bills had been held up in a record-long nine-hour procedural vote and included the stablecoin-regulating GENIUS Act, which President Donald Trump had pressured the GOP to quickly pass.
Related: Does GENIUS turn stablecoin issuers into stealth buyers of US debt?
GOP Representative Marjorie Taylor Greene slammed Speaker Mike Johnson on Monday for not keeping his promise of a CBDC ban, adding she supports crypto but “will never support giving the government the ability to turn off your ability to have full control of your money and to buy and sell.”
An early House version of the bill shared in August had included a CBDC ban, before it was subjected to amendments via multiple markups and committees.
The language of the provision banned the Federal Reserve from testing, studying, developing or issuing any digital currency or asset. It would have also stopped the central bank from offering financial products or services directly to individuals.
In July, the House passed a bill banning CBDCs, the Anti-CBDC Surveillance State Act, with a slim vote of 219-210, which has stalled in the Senate.
Self said he would “fight on in the next must-pass bill to ensure a CBDC never sees the light of day. Financial freedom isn’t negotiable.”
Legal Panel: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight
-
Sports2 years agoStory injured on diving stop, exits Red Sox game
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment3 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment1 year agoHere are the best electric bikes you can buy at every price level in October 2024