Read on Twitter
You might be wondering why, if the MOD just received a significant settlement over several years, it is reportedly (details still to be confirmed) making cuts. https://twitter.com/pinstripedline/status/1336427345658458113
First, the Spending Review period hasn’t started yet, so the MOD doesn’t have the money yet. The SR settlement in the image below starts in the financial year 2021/2022 (ie after April next year).
Second, even where departments are given settlements over several years, accounting is done on an *annual* basis. So if the MOD has more commitments than £41.2 billion this year, it can’t ‘borrow’ money from next year, nor will it have kept any money it ‘saved’ last year.
That means having to save/cut, and often in resource spending (RDEL) which usually relates to running costs and people. There are people more expert than me who have written on the pros/cons of this annual approach, and the behaviour it encourages/discourages.
But it’s seen by the Treasury as an important means of providing control of departments from year to year (especially those who are regarded as profligate) and needs to be kept in mind when looking at any spending settlements, or questions as to why x can be afforded but y can’t.
That annual accountability is also to Parliament, exercised by @CommonsDefence taking evidence from the Permanent Secretary, who is the accounting officer for the MOD (if the MOD goes a penny over the budget ‘voted’ by Parliament, it’s their neck on the line).
As it happens, today was also the day of that annual session. https://committees.parliament.uk/committee/24/defence-committee/news/136916/defence-committee-to-hold-evidence-session-on-ministry-of-defences-annual-report-and-accounts/
