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Defence: Procurement

Volume 482: debated on Tuesday 11 November 2008

To ask the Secretary of State for Defence (1) what his latest estimate is of expenditure for urgent operational requirements in 2008-09; (234037)

(2) with reference to the answer of 2 June 2008, Official Report, column 679W, on departmental finance, by what means the figure of (a) £900 million for urgent operational requirements for 2008-09 referred to in the Answer and (b) £1,065 million referred to in paragraph 7 of the Government's response to the Defence Committee's Report on the Ministry of Defence Main Estimates 2008-09 was calculated; what the reasons are for the difference in the figures; and if he will make a statement.

The £900 million figure referred to for urgent operational requirements (UORs) was agreed with HM Treasury in autumn 2007 as the estimate for Reserve expenditure on UORs in FY 2008-09. This estimate was based on a forecast of UOR rates along with the known UOR pipeline of requirements.

We agreed at the time that any predicted spend from FY 2007-08 that did not accrue in year should be allowed in FY 2008-09 in addition to the £900 million without penalty.

Later, in the Main Estimate, we predicted our overall cash requirement, having taken into account some predicted rollover, as £1,065 million.

The latest estimate for UOR expenditure for FY 2008-09 is around £l billion. This falls comfortably within the prediction.