We shouldn’t be surprised defence spending involves creative accounting

By Chris Rogers April 21, 2016 2:32 pm

This morning the Defence Select Committee rapped the Government over the knuckles over spending, suggesting ministers have ‘shifted the goalposts’ when working out how much was spent on protecting the UK. The Committee concluded the Government has included various expenses to its calculations in order show it’s spending the two defence of GDP necessary to meet NATO targets.

In other news, it emerged Boris Johnson would quite like to be Prime Minister. And water was proven to be wet.

Now, those statements are rather glib. But they’re indicative of the fact that the Defence Select Committee’s conclusions should not be received with any form of surprise. In fact, it would be surprising it the Committee’s members reached any other conclusion.

The fanfare last year when ministers committed to the NATO target belied the pressure they were under to do so. Parliamentarians across the political spectrum demanded it. NATO officials lobbied for it. And even President Obama and the US Secretary of Defence pushed for it – going so far as to suggest the Special Relationship might be affected if the two percent target wasn’t met.

And despite the Government’s commitment to the requisite level of defence spending, it quickly became clear last year that meeting the target wouldn’t involve vast new funds for the MoD as much as it would involve what might be charitably described as ‘creativity’ in the accounting. This indeed was a point the Defence Select Committee picked up on at the time, noting that the likes of intelligence spend – including GCHQ – was being included for the first time.

In that respect, there’s nothing revelatory about the Defence Select Committee’s latest conclusions. Rather they are a reiteration of past concerns. But that doesn’t mean they aren’t still extremely important.

Their importance is three-fold. Firstly, it prompts further questions as to how well funded, and consequently prepared, the Armed Forces can be. If the likes of pensions are being included in the MoD figures, then by definition any increase in apparent budget isn’t being translated to funding for the front line.

Secondly, the issue should raise further questions about transparency in government book keeping – not just within defence, but other areas such as education and health. At a time when public services are under unprecedented pressure, the public might ask what stock it should place if government figures and how these translate to service delivery.

Thirdly, it raises the question about priorities in defence. Military pensions are of course important. But if they’re included in the MoD figures as a means of achieving the NATO target, you could ask whether the motivation for officials is the bottom line, which doesn’t always translate into military preparedness and necessary security provisions.

The criticisms of the Select Committee will not be the biggest headache for ministers, particularly with the EU referendum looming. But these are questions that, while necessitating answers, the Government could do without.

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