13.1 | Resources

142. Mr Boateng asked that Mr Hoon provide fortnightly forecasts of UOR and non‑UOR

NACMO. The MOD would provide the first forecast on 16 January 2003.

143. Mr Boateng concluded: “Where further decisions are taken – for example over

the call up of reserves or the deployment of significant numbers of troops to theatre –

Gordon and I will of course stand ready to discuss funding issues.”

144. Mr Watkins described that arrangement to MOD officials as “generally acceptable”,

and passed on Mr Hoon’s thanks for negotiating it.99

145. Mr Boateng’s Private Secretary wrote to Mr Watkins on 13 January, to “record the

circumstances in which we have agreed that decisions should be cleared with Treasury

Ministers”.100 Expenditure outside the four specific Heads of Expenditure within the

non‑UOR NACMO envelope, and “any policy decisions that will lead to future costs”,

would require Treasury approval.

146. Mr Watkins wrote against the proposal that the Treasury should be consulted on

any policy decision with cost implications:

“This is a try‑on which we will correct in the reply.”

147. Mr Boateng agreed an MOD request for “some flexibility” to transfer resources

between the four Heads of Expenditure on 15 January.101

148. Mr Hoon’s Private Secretary replied to the Treasury’s letters of 23 December

and 13 January on 16 January.102 He stated that Mr Hoon “would, of course, continue

to include the Chancellor in correspondence on major policy decisions which have

expenditure implications”.

149. The letter also provided the MOD’s first detailed forecasts of expenditure on UOR

and non‑UOR NACMO, covering the period up to April 2003.

150. The MOD provided its first report on actual expenditure on UORs and non‑UOR

NACMO to the Treasury on 5 March.103

151. Section 6.5 describes discussions within the UK Government on whether the UK

should take responsibility, in the post‑conflict period, for a geographical sector in Iraq.

152. On 13 February, Mr McKane wrote to Mr Dodds setting out the MOD’s

assessments of the costs of military operations and the aftermath.104

99 Minute Watkins to MOD DG RP, 23 December 2002, ‘Iraq: Briefing the Chief Secretary to the Treasury’.

100 Letter Treasury [junior official] to Watkins, 13 January 2003, ‘Iraq: Funding’.

101 Email Treasury [junior official] to Treasury [junior official], 15 January 2003, ‘Iraq Resource Costs’.

102 Letter MOD [junior official] to Treasury [junior official], 16 January 2003, ‘Op Telic: Iraq Costs’.

103 Letter PS/Hoon to PS/Boateng, 5 March 2003, ‘Operation Telic: Iraq Costs Update’.

104 Letter McKane to Dodds, 13 February 2003, Op Telic: Iraq Costs – Active Operations and the

Aftermath’.

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