The Report
of the Iraq Inquiry
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.”
672.
The official
advised that the UOR regime was not ideal for the UK
military
either, as:
•
despite
accelerated procurement, UORs were frequently not available
until
several
months after a need had been identified. It would be better to
plan
to have
the capability in advance;
•
that would
also enable soldiers to be trained on new equipment before
their
deployment
to theatre, and for new equipment to be properly incorporated
into
military
doctrine; and
•
after one
year, the ongoing costs of UORs reverted to the core defence
budget.
Those
unplanned costs could be difficult to accommodate.
673.
From June
2007, the process changed so that the Treasury cleared every
UOR
individually
(rather than only those above £10m).354
674.
The outline of
a new UOR regime was agreed in late July, as part of the
MOD’s
settlement
in the 2007 Comprehensive Spending Review:
•
the Reserve
would pay for the “first element” of total UOR costs each
year;
•
MOD and
Treasury would share equally any costs in excess of this
amount
(with the
Treasury meeting those excess cost up front, and then reclaiming
them
from MOD on
a rolling three‑year basis);
•
MOD would
receive £200m to assist with its first payments under this
new
arrangement,
and;
•
MOD would
review its Equipment Programme with the intention of
“rebalancing
spend
towards … the current operating environment”.355
675.
The changes to
the UOR process, and discussions leading up to them,
are
considered
in more detail in Section 13.1.
354
Minute
Lester to Woolley, 30 October 2007, ‘Approach to UOR Funding
Following the CSR07
Settlement’.
355
Letter
Burnham to Browne, 24 July 2007, ‘Comprehensive Spending Review
2007: Ministry of Defence
Settlement’.
116