13.2 |
Conclusions: Resources
56.
There are no
indications that the new arrangements for funding civilian
activities
affected
the civilian effort in Iraq, which was by that time
reducing.
57.
The Government
continued to develop its arrangements for funding
reconstruction
and
stabilisation operations.
58.
The Inquiry
has not evaluated in detail the effectiveness of the new
arrangements
that were
introduced in 2007. They do exhibit some important and welcome
features:
•
a dedicated
and substantial pool of resources for civilian activities
in
environments
such as Iraq and Afghanistan; and
•
a
requirement that allocations should be based on an
inter‑departmental
strategy.
59.
The Government
should have recognised earlier that Iraq was an
enduring
operation,
and adapted its arrangements for funding the military operation and
civilian
activities
accordingly in order to:
•
ensure that
the UOR programme retained its focus on addressing urgent
and
specific
requirements in theatre; and
•
address the
difficulties in securing funding for civilian
activities.
In the
light of the publicity surrounding the funding and management of
the defence
programme
in 2003 and 2004, the Inquiry examined two related
questions:
•
whether the
size of the MOD’s core budget imposed constraints on
operations
in Iraq;
and
•
whether the
imposition of controls on the MOD’s management of its
resources
by the
Treasury in September 2003 had an impact on operations in
Iraq.
Several
witnesses told the Inquiry that, in the MOD’s view, the 1998
Strategic
Defence
Review, which
signified a major shift towards expeditionary armed forces, had not
been
fully
funded.
With
respect to military operations in Iraq, there are no indications
that there was an
unmet,
articulated need for additional financial resources. All the MOD’s
claims on the
Reserve in
respect of UORs and other additional military costs were
met.
The Inquiry
concludes in Section 14.2 that there were known military capability
gaps in
Iraq, and
that the availability of funding was not a direct barrier to the
identification and
deployment
of solutions to those gaps.
During
September 2003, the MOD’s additional cash requirement for 2003/04
rose from
£490m to
£1,152m. The MOD intended to meet that cash requirement by making
a
transfer
from its non‑cash budget. The Treasury took the view that that
increase signalled
a complete
lack of budgetary control within the MOD, and on 26 September
imposed
controls on
the MOD’s management of its resources.
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