The Report
of the Iraq Inquiry
495.
Reporting the
Treasury’s “emerging response” to Mr Browne, Mr Taylor
said that
Mr Quinault
had made clear:
•
The
current, high level of UOR approvals was generating significant
financial
pressure on
the Reserve, such that Treasury officials viewed the current
UOR
mechanism
as “unsustainable”.
•
A key
Treasury concern was that there was no incentive within the current
UOR
mechanism
for the MOD to manage demand or reprioritise equipment
plans.
•
In the
shorter term, Treasury officials were keen to modify the UOR
mechanism
so that the
Treasury agreed a smaller envelope to cover smaller UORs,
while
larger UORs
would be agreed individually with Treasury officials.
•
In the
longer term, a new UOR mechanism should be considered as part
of
the forthcoming
Comprehensive Spending Review.
496.
Mr Quinault
had also told MOD officials that he would be recommending
to
Mr Timms
that he should ask the MOD to find the resources for two UORs which
he
perceived
as general capability enhancements.
497.
Mr Taylor
concluded:
“All that
said, Quinault accepted that Treasury Ministers may take a
different view
given the
evident sensitivities, so we should not assume anything about the
formal
Treasury
response until the Chief Secretary [Mr Timms] has written
…”
498.
A Treasury
official advised Mr Timms on 20 April that the “step change”
in the level
of UOR
funding made the current UOR arrangement
“unsustainable”.300
The
Treasury
had
provided £2.1bn to fund UORs relating to Iraq and Afghanistan since
2001, of which
over half
had been provided in the last two years:
“We [the
Treasury] do not question the military judgment that there is a
current
operational
need – but we believe that many of these items seek to
provide
a general
capability that could have been provided through the
Equipment
Programme.
Many items appear to be kitting out the Army while the
Equipment
Programme
has invested in ships and aircraft … As such we think the UOR
scheme
is becoming
a straightforward supplement to the EP [Equipment Programme] in
a
way that it
was never intended to be, bailing out MOD of the need to prioritise
in the
kit they
purchase and compensating for bad decisions in the
past.”
300
Minute
Treasury [junior official] to Timms, 20 April 2007, ‘Increase in
the Urgent Operational
Requirements
Envelope’.
526