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Departmental Finance

Volume 486: debated on Wednesday 14 January 2009

To ask the Secretary of State for Defence what monetary value his Department assigns to one life in its economic appraisals of (a) troop safety measures and (b) defence equipment; and if he will make a statement. (245680)

Since the main benefits of Departmental investment in the form of defence capability are not capable of being expressed in monetary terms, the overwhelming majority of MOD investment appraisals use a cost effectiveness approach. This involves a comparison of the whole life costs of alternative options to deliver the same stated defence benefit, without recourse to specific monetary values of life. There have been no economic appraisals supporting business cases of expenditure proposals subject to the Department’s central approval processes where monetary values have been applied to life. However, should it be necessary to directly evaluate the costs and benefits of safety measures the Department’s approach to applying monetary values to life and safety is set out in Joint Services Publication (JSP) 507 “MOD Guide to Investment Appraisal and Evaluation”. This is available at

http://www.mod.uk/defenceinternet/aboutdefence/corporatepublications/policystrategyandplanning/jsp507modguidetoinvestmentappraisalandevaluation.htm.

The approach follows HM Treasury guidance and is the same as that used by other Government Departments, in particular the Department for Transport and the Health and Safety Executive.