To ask the Secretary of State for Defence on what date his predecessor was first informed of the determination by HM Treasury in autumn 2003 that his Department had exceeded its budget in the previous 15 months in respect of the flexibility permitted by resource account budgeting; what estimate was made of the size of that overspend; what discussions he had with the Chancellor of the Exchequer on that matter; and if he will make a statement. (316087)

Following the 2002 spending review, a technical issue arose regarding flexibility between the MOD’s core cash and non-cash expenditure plans.

HM Treasury and MOD officials identified the issue in the preparation of Main Estimates for 2003-04. My predecessor was first informed in April 2003. Discussions between MOD and HM Treasury officials and Ministers led to agreement on a way ahead in late 2003.