---

Ministry of Defence

I have explained some of the rationale behind that. The report recognises that some things might not be played out publicly because of such good reasons as operational considerations. It is not wise to state everything that we are doing to improve our equipment and capability in response to a specific threat. The scale of the £146 million contingency has been referred to, and I have already given an indication about the £100 million aspect of the budget. It would be difficult to give full granularity because although one can put forward a contingency, what is wanted might not materialise. Of course, if the money is not spent, the financial resource is not delivered. Over time, as specific urgent operational requirements have arisen, we have, when there has been no operational sensitivity, indicated what the requirements involve. Recommendation 2 claims that the MOD did not take the previous Defence Committee recommendations seriously: I do not accept that. We have produced significantly more information this year than in any previous year in the estimates memorandum. The new information includes the inclusion of tables of figures that break down the detail of each request for resource; detail of transfers to and from other Departments; a detailed breakdown of provisions and, importantly, a published audit trail of changes since the main estimates. There is much more explanation and clarity than in previous years, but we have to seek to go further still and we will reflect on the points that have been made in the report. We are planning to provide more detailed information on the cost of operations in our annual report and accounts, which is the appropriate place to do so. That information will be comparable to the level of detail we have recently provided to the Committee, and I hope that that finds favour with the House. The fourth conclusion and recommendation made by the Committee was that agreement of the Treasury is not a substitute for parliamentary approval. I could not agree more and I am sure that the Treasury would also agree. But we would hardly seek Parliament’s approval to spend money without having closely consulted the Treasury in advance. I have been closely involved in such matters for several years, with the MOD and a previous Department and I know that the Treasury has a very important role to play in the tight scrutiny of departmental requests. The reality is that we have to convince the Treasury before embarking on any significant course of action. That is part of the discipline within government. We have to justify our accounting processes, and ensure that they are sound. They must form part of the Government’s mission and we must ensure that we have sufficient resources to achieve that mission. The process of consultation with the Treasury is a very important element of the work of all Departments. Indeed, I do not think that the Committee is arguing against such scrutiny by the Treasury. We have provided more information to Parliament this year than we have done before, and where we can, we will seek to improve further. The Committee recommends that our practice of waiting for the spring supplementary estimates to request funds for commenced operations should cease and recommends that they are requested in the main estimates. It has been the practice that that request has been made in the supplementary estimates. That has been the traditional approach because costs are difficult to forecast in fast moving operational circumstances. My Department works hard to ensure that the figures presented to Parliament are reliable, and supplementary estimates are the first occasion on which we can reach a reasonably firm conclusion. However, we will look closely at the Committee’s recommendation in consultation with the Treasury. On recommendation 6, the Government have never routinely published operations expenditure data in-year, as the Committee requests. We provide an estimate based on the forecast of the cost of operations in the supplementary estimates. At the end of each year, the actual expenditure is audited by the National Audit Office, and then published in the annual report and accounts. As I have already said, we will be publishing more detail in this year’s accounts. We are trying to obtain the best information and ensure its substance so that we can be properly judged, instead of providing the working figures for the MOD and the Treasury. Recommendation 7 relates to the provision for operations in the Balkans in the main estimates. That is £64 million for the current financial year. Provision for operations in the Balkans comes from what is known as the global conflict prevention pool. Pool funding ensures that no single Department becomes liable for those costs. The Foreign and Commonwealth Office has always been the lead Department for administering the funds, and requests funding in its estimates on behalf of all the pool members. We make a contribution to the discussion on the collective amount that should be sought. We will consult the other Departments involved on the impact that making the recommended change would have on the long-established collective conflict prevention management arrangements, but I believe that the system we have works well. I am prepared to consider the point, but the current arrangements are clear. If we could do it another way, and the other Departments agree, we will come back to that issue.