MoD close to eliminating 'black hole' in budget

The Ministry of Defence is close to eliminating the £38 billion “black hole” found in its books following the 2010 election and achieving a “sustainable and balanced budget”, it was revealed today.

An MoD spokesman said Defence Secretary Philip Hammond was increasingly confident that the ministry was "turning a corner" and will be able to invest in new equipment projects.

He was unable to confirm reports that £2.1 billion has been earmarked for several major new spending projects.

According to the Daily Telegraph, these could include converting 22 RAF Merlin helicopters for movements over sea; a new fleet of advanced Type 26 frigates for the Royal Navy; an upgrade for Puma helicopters; and the extension of the array of armaments available to the Typhoon fighter jet.

But Labour warned against "triumphalism" from the MoD, which has cut aircraft carriers, Harrier jets, Nimrod surveillance planes and 30,000 personnel as part of its drive to slash spending.

The MoD spokesman said: "Tough decisions were essential to tackle the £38 billion black hole that the Government inherited.

"The MoD is now close to achieving a sustainable and balanced budget for the first time in decades. This will mean we can order extra equipment with renewed confidence.

"We are still refining individual equipment projects, assessing each case for contingency and risk, but we are increasingly confident that the MoD is turning a corner and will soon have a clear and affordable programme.

"We will be spending over £150 billion on equipment and equipment support over the next decade."

Shadow defence secretary Jim Murphy said: "For these claims to be at all credible we will need full transparency from the Defence Secretary. If the department won't publish their figures people will conclude that this is nothing more than fiscal hubris.

"With unfunded liabilities on the balance sheet, rising costs of major projects, the loss of core skills and capabilities and a timid industrial strategy, it is hard to understand any triumphalism within the MoD.

"We will support new investment in capabilities, but it is clear that this is to plug the gaps ministers themselves have created.

"The Government's defence policy has led to Britain's strategic shrinkage by stealth, limiting our reach and firepower."

PA