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MEMORANDUM FOR THE MINISTRY OF DEFENCE

MAIN ESTIMATES 2015/16

1. Introduction:

1.1. This Memorandum covers the Main Estimate (ME) for the Ministry of Defence (MOD). The Department’s spending plans for 2015/16 are based on the Spending Review (Cm 8639) published in June 2013.

1.2. The Departmental Expenditure Limit (Resource and Capital DEL) for 2015/16 is £34.6Bn (excluding ring fenced expenditure). In addition funding has been provided from HM Treasury (HMT) Reserve for the net additional costs of military operations.

1.3. This Estimates Memorandum should be read in conjunction with the Department’s Main Estimate. There are no contingencies funded in this Estimate, and contingent liabilities are reported in a separate table in the Estimate.

1.4. A separate Estimates Memorandum is prepared for the Armed Forces Pensions and Compensation Scheme Vote 2015/16 Main Estimate.

Summary of Resources sought in the Estimate:

1.5. Part I of the Estimate sets out the new resource requirements for the Department for the year ending 31 March 2016. The resources requested are set out in Tables 1 and 2 below.

Table 1: Summary of Resource Expenditure Request at 2015/16 Main Estimates

Net Resource Expenditure £ M

Provision of Defence Capability: DEL (See table 3 detail)

35,539.5

Operations: DEL 289.3

War Pension Benefit DEL 812.4

Total Annually Managed Expenditure (See table 10 detail)

1,510.2

Total Net Request for Resources 38,151.4

Of which: Administration 1,519.6

Of which: Programme 36,631.8

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Table 2: Summary of Capital Expenditure Request at 2015/16 Main Estimates

Net Capital Expenditure £ M

Provision of Defence Capability DEL (See table 4 detail) 6,793.3

Operations 30.0

Total Net Request for Capital 6,823.3

Budget Exchange Reserve Claim:

1.6. As part of the department’s contribution to additional in-year savings measures directed by HMT, MOD will no longer draw down £0.3Bn in budget exchange (BX) which had previously been agreed at the 2014 Autumn Statement. In addition, the expected £0.7Bn BX relating to our 2013/14 underspend has been reduced to £0.5Bn. Consequently, MOD’s total in-year contribution to Government spending reductions is £0.5Bn.

1.7. However, the department has received £0.5Bn in Defence Recuperation funding as agreed at SR13, and there is a further £21M deferred directly from MOD’s 2012/13 underspend expected at the 2015/16 Supplementary Estimate (SE).

March 2015 Budget Announcements:

1.8. Up to an additional £75M for forces charities and veterans’ projects was announced in the March 2015 budget, funded by LIBOR fines payable to HMT by the financial sector. It is anticipated that the detail of those measures to be administered by MOD will be reflected at the 2015/16 SE.

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2. Composition of the Main Estimates:

How the Main Estimate has been structured:

2.1. The Main Estimate has been structured by commodity cost block, based on information submitted to the HMT Online System for Central Accounting and Reporting (OSCAR); while also ensuring that the resource request does not exceed the Spending Review agreement.

The Main Commodity Cost Blocks:

Resource DEL:

2.2. Table 3 summarises the RDEL commodity cost blocks for Defence Capability at Main Estimates.

Table 3 Commodity Block RDEL Request at 2015/16 Main Estimate

£M (rounded)

Commodity Block1 Administration Programme Total

Service Personnel Costs 601.6 8,788.4 9,390.0

Civilian Personnel Costs 400.9 984.9 1,385.8

Infrastructure Costs 0.0 4,478.6 4,478.6

Inventory Consumption 0.0 1,721.9 1,721.9

Equipment Support Costs 0.0 6463.4

6,463.4

Other Costs & Services 496.9

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1,405.6 1,902.5

Research & Development 0.0 1,017.2 1,017.2

Receipts & Other Income 0.0 (968.6) (968.6)

Cash Release of Provisions 20.3 234.2 254.5

Arms Length Bodies 0.0 183.1 183.1

DE&S BTE 0.0 1,211.2 1,211.2

War Pensions Benefit 0.0 812.4 812.4

Total Non Ring Fenced Resource

1,519.6 26,332.3

27,851.9

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Ring Fenced Non Cash: Depreciation & Impairments - TLBs

0.0 8,491.0 8,491.0

Ring Fenced Non Cash: Depreciation & Impairments – Arms Length Bodies

0.0 9.0 9.0

Total Ring Fenced Resource DEL

0.0 8,500.0 8,500.0

Total Core Resource DEL 1,519.6 34,832.3 36,351.9

2.3. The Department has received £812.4M for War Pensions & Benefits, reclassified from AME to Resource DEL as announced at the 2014 Budget. With the introduction of the Armed Forces Compensation Scheme (AFCS) this scheme was closed to new claimants from 5 April 2005. Costs for the new scheme are accounted for under a separate vote for the Armed Forces Pension Scheme Estimate.

2.4. There has also been an uplift of £891.8M provided by HMT to reflect the GAD Revaluation of SCAPE rates; and a further £58M is anticipated at SE. There has also been a decrease in the AFCS Net Cash Requirement.

2.5. It was agreed at SE 2014/15 that the DE&S Bespoke Trading Entity (BTE) would sit outside the wider Administration Cost Regime (ACR) and its operating costs are therefore broken out separately on the face of the Estimate. The Control Totals shown are in line with those agreed with HMT in May 2014. DE&S itself is an executive agency and will publish separate plans and annual accounts at the end of FY 2015/16.

Notes: (1) See Annex 3 for the breakdown of the major types of commodity costs.

Capital DEL:

2.6. Table 4 summarises the CDEL commodity cost blocks for Defence Capability at Main Estimates

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Table 4 Commodity Block CDEL Request at 2015/16 Main Estimate

£M (rounded)

Commodity Block Gross CDEL Non Operating Appropriations in Aid

Net CDEL

SUME1 Capital 2,900.0 2,900.0

Fiscal Capital 4,358.7 4,355.7

Fiscal Asset/Estate Disposals

(488.7) (488.7)

Loan Repayments (4.0) (4.0)

Arms Length Bodies 16.6 16.6

DE&S BTE 10.8 10.8

Total CDEL 7,286.0 (492.7) 6,793.3

Notes: (1) Single Use Military Equipment

Transfers between Government Departments:

2.7. Transfers to and from other Government Departments are shown in Tables 5 and 6. In some cases, funding for multiple years was agreed in previous accounting periods, so some figures represent a continuation of transfers made in last year’s Supplementary Estimate.

Table 5: Transfers to MOD from other Government Departments

Exporting Department Defence Output

£M Purpose

Security & Intelligence Agency

Provision of Defence Capability - RDEL

0.4 Global Threat Reduction Fund

Security & Intelligence Agency

Provision of Defence Capability - CDEL

10.1 Transfer for Cyber

BIS Provision of Defence Capability - CDEL

10.0 Transfer for Typhoon

International Development

Operations RDEL

41.5 Conflict, Stability and Security Fund (CSSF)

FCO Operations RDEL

17.8 Conflict, Stability and Security Fund (CSSF)

Total 79.8

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Table 5a: Transfers to MOD from other Government Departments for Previous Estimates impacting on 2015/16

Exporting Department Defence Output

£M Purpose

Total

Table 6: Transfers from MOD to other Government Departments

Importing Department

Defence Output £M Purpose

DFT Provision of Defence Capability - RDEL

(110.3) Search and Rescue Helicopter (SAR-H)

Security & Intelligence Agency

Provision of Defence Capability - RDEL

(100.0) Transfer for Cyber Programme

Security & Intelligence Agency

Provision of Defence Capability - RDEL

(60.9) Transfer for NOCP Programme Funding

BIS Provision of Defence Capability - CDEL

(22.8) A400M Export Levy Facility

DCMS Provision of Defence Capability - RDEL

(2.5) OFCOM Costs

Total (296.6)

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Table 6a: Transfers from MOD to other Government Departments for Previous Estimates impacting on 2015/16

Importing Department

Defence Output £M Purpose

Security & Intelligence Agency

Provision of Defence Capability - RDEL

(8.3) IATP

DCLG Provision of Defence Capability - CDEL

(1.0) Public Land Investment Fund

FCO Provision of Defence Capability - RDEL

(0.7) Falkland Island De-mining

Total (10.0)

Arms Length Bodies:

2.8. Under Clear Line of Sight (CLoS), Arm’s Length Bodies (ALBs) now form part of Departmental DEL. Table 7 summarises the funding requested by MOD ALBs and is based on information received from the Top Level Budget (TLB) areas responsible for those organisations.

Table 7 Breakdown of the Arms Length Bodies Request for Resources at 2015/16 Main Estimates

£M

Organisation Non Ring Fenced RDEL

Ring Fenced RDEL

Total RDEL CDEL

CRFCA1 103.0 2.0 105.0 16.3

Royal Hospital Chelsea 11.8 5.4 17.2 0.0

National Army Museum 6.2 0.5 6.7 0.1

RAF Museum 8.5 0.0 8.5 0.1

National Museum of the Royal Navy

3.5 1.1 4.6 0.1

Commonwealth War Graves Commission

47.3 0.0 47.3 0.0

Single Source Regulation Office

2.8 0.0 2.8 0.0

Total 183.1 9.0 192.1 16.6

Notes: (1) CRFCA: Council for Reserve Forces & Cadets Associations

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3. Operations and Peacekeeping:

3.1. The MOD’s total request for the initial net additional costs of operations is set out in Table 8.

Table 8: Summary Cost of Operations and Peacekeeping at 2015/16 Main Estimates

Operation

Non Ring fenced

Resource DEL £M

Ring fenced

Resource DEL £M

Total Resource

DEL £M

Capital DEL £M

Total DEL

£M

Total AME

£M

Total ME (15/16)

£M

Total SE (14/15)

£M

Afghanistan 80.0 0 80.0 0 80.0 0 80.0 1,043.8

Wider Gulf 80.0 0 80.0 0 80.0 0 80.0 25.0

Counter ISIL

45.0 0 45.0 30.0 75.0 0 75.0 46.0

DMAP1 25.0 0 25.0 0 25.0 0 25.0 25.0

CSSF2 59.3 0 59.3 0 59.3 0 59.3 61.4

Total 289.3 0 289.3 30.0 319.3 0 319.3 1,201.2

Notes: (1) See Annex 2 for definitions

(2) Conflict Stability and Security Fund. This replaced the Conflict Pool from 15/16.

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Operations Summary:

3.2. The MOD is requesting continued Reserve funding for the initial net additional cost of operations in Afghanistan and Wider Gulf as well as countering ISIL activity and DMAP. The breakdown of the request is set out in Table 9 below. In line with HMT policy at ME, up to 80% will be allocated now. HMT has agreed that a further request for resources can be made in the SE if the cost of operations exceeds ME allocation.

3.3. The costs of operations are largely driven by the tempo of operations, which affects equipment support costs, attrition, and fuel and ammunition consumption. In addition, exchange rates, fuel prices and actual costs incurred with contractors can all also vary during the financial year. MOD has involved HMT in formulating the estimate to reassure them of the rigour applied and to inform forecasts of wider Government spending.

Afghanistan

3.4. Operational costs in Afghanistan reflect UK force in theatre to support the NATO–led international mission and include the UK’s agreed contribution to the Afghan National Army Officer Academy in Kabul and institutional development of the Afghan National Security Force (ANSF). An initial allocation of £80M Non Ring Fenced RDEL is requested in 15/16.

Wider Gulf

3.5. UK forces are deployed to the Gulf to sustain UK influence in the region, reassure our regional allies and support access and over flight for operations in Afghanistan and in countering ISIL. UK forces also contribute to energy and trade security, and support the Government’s regional counter terrorism and counter piracy policies. An initial allocation of £80M Non Ring Fenced RDEL is requested in 15/16.

Countering ISIL

3.6. UK military activity to degrade and ultimately defeat ISIL continues. This includes airstrikes in Iraq in support of coalition ground operations, airborne intelligence gathering operations in Iraq and Syria and helping train the Iraqi Security Forces and moderate Syrian opposition. An initial allocation of £45M Non Ring Fenced RDEL is requested in 15/16 to meet the net additional costs of airstrikes in Iraq and airborne intelligence gathering operations in Iraq and Syria. In addition, £30M CDEL is requested for the initial replenishment of Paveway IV precision munitions.

Deployed Military Activity Pool (DMAP)

3.7. The DMAP is a joint HMT and MOD initiative to make available resources to fund the initial and short term costs of any unforeseen military activities, as authorised by the National Security Council (NSC). As with the policy for Afghanistan, Wider Gulf and countering ISIL only the net additional cost of certain activities are charged. The DMAP is current meeting

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the net additional costs of training the Ukrainian Armed Forces as well as certain activities to counter ISIL. The £25M Non Ring Fenced RDEL from HMT is matched by a similar contribution from the Defence Capability allocation.

Conflict Stability and Security Fund (CSSF):

3.8. The CSSF replaces the Conflict Pool as the Government’s mechanism for funding conflict prevention, stabilisation, security and peacekeeping activities, under the strategic direction of the NSC. The MOD led budget allocation for the CSSF totals £59.3M, and has been funded by a budgetary transfer from DFID and FCO.

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3.9. Table 9: The Estimated Initial Net Additional Cost of Operations at ME 2015/16

Cost Type1 Afghanistan

£M Wider Gulf

£M Countering

ISIL £M DMAP £M Total £M

Service Personnel Staff Costs 11.0 1.0 0 1.0 13.0

Civilian Personnel Staff Costs 3 0.5 0 0.5 4.0

Infrastructure Costs 15.0 10.0 0 5.0 30.0

Inventory/Other Consumption 10.0 15.0 30.0 10.0 65.0

Equipment Support Costs 21.5 30.0 15.0 3.5 70.0

Research and Development Costs 0 0 0 0 0.0

Other Costs and Services 21.5 23.5 0 5.0 50.0

Receipts and Other Income -2 0 0 0 -2.0

Cash Release of Provisions 0 0 0 0 0

Total Non Ring Fenced Resource DEL 80.0 80.0 45.0 25.0 230.0

Ring Fenced Non Cash Resource DEL 0 0 0 0 0

Total Resource DEL 80.0 80.0 45.0 25.0 230.0

Capital Additions – SUME 0 0 30.0 0 30.0

Capital Additions – Fiscal 0 0 0 0 0

Total Capital DEL 0 0 30.0 0 30.0

Total Estimated DEL Costs 80.0 80.0 75.0 25.0 260.0

AME 0 0 0 0 0

Total Costs 80.0 80.0 75.0 25.0 260.0

Notes: (1) See Annex 3 for the breakdown of the major types of commodity costs.

4. Annually Managed Expenditure (AME):

4.1. Table 10 sets out our AME Defence Capability request.

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Table 10 Summary of AME Request at 2015/16 ME

Commodity Block £M

Depreciation & Impairments 1,209.4

Creation of Provisions 255.2

Cash Release of Provisions (254.5)

Financial Instruments Value 300.0

Total Core AME 1,510.2

Total Operations AME 0

Total AME 1,510.2

5. Summary Estimates Composition:

5.1. Table 11 summarises the composition of the Estimate, including changes since the Spending Review 2010 Settlement.

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Table 11: Changes to Resources and Capital at 2015/16 ME (Rounded)

C AME

Non Ring Fence R

DEL

Ring Fenced R

DEL R DEL C DEL RAME Non

budget

£M (rounded) 1 2 3 4 5 6 7

CSR settlement 23895.8 9621.0 33516.8 8697.0 1510.2 0.0 0.0

SUME to R DEL switch 2300.0 0.0 2300.0 -2300.0 0.0 0.0 0.0

Budget Exchange 0.0 0.0 0.0 700.0 0.0 0.0 0.0

SR EP reprofiling 0.0 0.0 0.0 -100.0 0.0 0.0 0.0

prior year transfers -8.9 0.0 -8.9 -1.0 0.0 0.0 0.0

Autumn Statement 2013 savings -272.0 0.0 -272.0 0.0 0.0 0.0 0.0

Transfer out A 400M ELF 0.0 0.0 0.0 -22.8 0.0 0.0 0.0

Transfer out SAR Helicopters -110.3 0.0 -110.3 0.0 0.0 0.0 0.0

Transfer Out Spectrum costs to DCMS -2.5 0.0 -2.5 0.0 0.0 0.0 0.0

Transfer out Cyber offensive -100.0 0.0 -100.0 0.0 0.0 0.0 0.0

Transfer out Cyber defensive -60.9 0.0 -60.9 0.0 0.0 0.0 0.0

Transfer in DEL switch for Cyber 0.0 0.0 0.0 10.1 0.0 0.0 0.0

Transfer in Global Threat Reduction Fund 0.4 0.0 0.4 0.0 0.0 0.0 0.0

Transfer in Typhoon 0.0 0.0 0.0 10.0 0.0 0.0 0.0

Armed forces SCAPE increases 892.0 0.0 892.0 0.0 0.0 0.0 0.0

Defence recuperation Fund 506.0 0.0 506.0 0.0 0.0 0.0 0.0

Savings announced by Chancellor 05/06/2015 0.0 0.0 0.0 -200.0 0.0 0.0 0.0

HMT adjustment to depreciation and impairments 0.0 -1121.0 -1121.0 0.0 0.0 0.0 0.0

Cost of Defence Capability in Estimates 27039.5 8500.0 35539.5 6793.3 1510.2 0.0 0.0

Operations and Peacekeeping 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Reserve claim 230.0 0.0 230.0 30.0 0.0 0.0 0.0

Transfer for CSSF 59.3 0.0 59.3 0.0 0.0 0.0 0.0

Operations and Peacekeeping Total 289.3 0.0 289.3 30.0 0.0 0.0 0.0

Total DEL 27328.8 8500.0 35828.8 6823.3 1510.2 0.0 0.0

War pension benefits 0.0 0.0 0.0 0.0 851.0 0.0 0.0

Reduced WPB forecast 0.0 0.0 0.0 0.0 -38.6 0.0 0.0

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Change from AME to DEL 812.4 0.0 812.4 0.0 -812.4 0.0 0.0

War Pension Benefits Total 812.4 0.0 812.4 0.0 0.0 0.0 0.0

Total in budgets

28141.3 8500.0 36641.3 6823.3 1510.2 0.0 0.0

Non Budget PPA2 0.0 0.0 0.0 0.0 0.0 0.0 53.0

Total 0.0 0.0 36641.3 6823.3 1510.2 0.0 53.0

Notes (2). Non-budget resources have been requested in relation to prior period adjustments to the classification of stockpile assets.

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6. Supplementary Estimate:

6.1. It is anticipated that a number of adjustments will be required at the Supplementary Estimate (published early February 2016), including;

Refinement and re-allocation of costs between commodity blocks potentially arising from the Spending Review

Additional LIBOR funding for Armed Forces Covenant projects.

Transfer from DfID for Official Development Assistance-eligible support to Search and Rescue in the Mediterranean.

Transfer out to DECC for cover for training and resilience in the event of fuel tanker drivers industrial action.

Transfer out to DCLG for cover for training and resilience in the event of Fire Services industrial action.

Transfer out to HO for salary costs related to support to Border Force activities.

7. The Department’s Public Strategic Objectives:

7.1. The Departmental Business Plan was published in November 2010 as part of the new Transparency Framework. The data in the latest published MOD Business Plan can be found at: http://transparency.number10.gov.uk/business-plan/18

8. Departmental Expenditure Limit (DEL):

8.1. Table 12 shows the core Defence Capability DEL from 2010/11 to 2015/16.

Table 12: The Departmental Expenditure Limit for 2011/12 to 2015/16 – Core Budget (Defence Capability)

DEL 2011/12 Outturn

£M

2012/13

Outturn £M

2013/14

Outturn £M

2014/15

Supplementary Estimate £M

2015/16

Main Estimate £M

Resource DEL 35,006 33,607 34,611 35,598 35,347

2402 Capital DEL 8,237 7,338 7,444 7,484 6,777

Ring Fenced Resource DEL

-8,239 -8,959 -8,909 -9,543 -8,491

Total DEL 35,004 31,986 33,146 33,539 33,633

9. DEL Budget Exchange:

9.1. This will be reviewed at the 2015/16 Supplementary Estimates.

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10. Provisions and Contingent Liabilities:

10.1. Provisions for liabilities and charges are based on realistic and prudent estimates of the expenditure required to settle future legal or constructive obligations.

10.2. MOD’s provisions cover legal claims, civilian early departure costs, environmental costs, restructuring and nuclear decommissioning and restoration costs. Details of the Department’s Contingent Liabilities are set out in a separate table in the published Main Estimate.

11. Machinery of Government Changes:

11.1. A Machinery of Government (MOG) change is made when the responsibility for a service transfers from one Government department to another. There are no new MOG changes for the MOD in 2015/16.

12. Permanent Under Secretary (PUS) Sign off:

12.1. The information in this memorandum has been approved by Louise Tulett, Director General Finance, on behalf of Jonathan Thompson, Permanent Head of Department, and Accounting Officer of the Ministry of Defence.

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Annex 1

Definition of Terms:

1. Non Ring Fenced DEL Resource Expenditure:

This includes current expenditure which covers, for example, pay, purchase of goods and services, net of receipts, within the resource budget. It excludes items such as depreciation and movement in provisions.

2. Ring Fenced DEL Resource Expenditure:

This control covers items such as depreciation and impairments.

3. Administration Costs Regime:

The current Administration cost regime, within DEL, covers departments’ current expenditure on civilian and military staff, and other services used in the administration of central government as agreed at the Spending Review Settlement.

4. Total Resource DEL:

This is the sum of non ring fenced expenditure and ring fenced expenditure.

5. Annually Managed Expenditure (AME):

Annually Managed Expenditure (AME) includes Programmes that are demand-led and exceptionally, volatile items that cannot be controlled by the Department. AME also includes Programmes that are so large that the Department could not be expected to absorb the effects of volatility within them, such as cash release of provisions.

6. Total Net Resource:

This is the sum of items 4 and 5.

7. Capital Departmental Expenditure Limit (CDEL):

This is for new investment (SUME and Fiscal), including capital additions, disposals, and the capital repayment of loans.

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8. Provision of Defence Capability:

Provision of Defence Capability provides for expenditure primarily to meet the Ministry of Defence’s operational support and logistics services costs and the costs of providing the equipment capability required by defence policy.

9. Operations:

This primarily refers to the net additional costs of operations, as opposed to those which the Department would have incurred regardless of the operation taking place, such as wages and salaries, are recorded against provision of Defence Capability.

10. War Pensions Payments:

War Pensions and associated allowances provide primarily for the payments of pensions and allowances for disablement or death arising out of war or service in the Armed Forces after 2 September 1939. For FY 2015-16 the budgeting treatment for these payments has been reallocated from AME to Resource DEL.

11. Spending Review:

Spending Review 2013 (Cm 8639)

12. Total DEL:

This is the sum of Resource DEL and Capital DEL less the costs of depreciation. This is used as depreciation and is included as part of Resource DEL and, since Capital DEL includes capital spending, the inclusion of depreciation would lead to double counting.

13. Single Use Military Equipment (SUME):

The difference between single and dual use military equipment is still being monitored this year for reporting purposes. Single use military assets are those that could not be used by civilian organisations for the production of goods and services (i.e. weapons and equipment that supports and delivers such weapons).

14. Voted and Non Voted Expenditure:

The introduction to the Supply Estimate now covers both Voted and Non Voted items.

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Annex 2

List of Abbreviations used in the Estimate

ABC Annual Budget Cycle

ACR Administration Cost Regime

ALB Arms Length Body

AME Annually Managed Expenditure

ANSF Afghan National Security Force

BTE Bespoke Trading Entity

CDEL Capital Departmental Expenditure Limit

CLoS Clear Line of Sight

CRFCA Council for Reserve Forces and Cadets Association

CSR Comprehensive Spending Review

CSSF Conflict Stability and Security Fund

CWGC Commonwealth War Graves Commission

DCLG Department for Communities and Local Government

DEL Departmental Expenditure Limits

DFID Department for International Development

DMAP Deployed Military Activity Pool

ERNIC Employer’s National Insurance Contribution

GCHQ Government Communication Headquarters

HMT Her Majesty’s Treasury

LIBOR London Inter Bank Offered Rate

ME Main Estimate

MOD Ministry of Defence

MOG Machinery of Government

NATO North Atlantic Treaty Organisation

OSCAR Online System for Central Accounting and Reporting

ONS Office of National Statistics

RDEL Resource Departmental Expenditure Limit

RHC Royal Hospital Chelsea

SCAPE Superannuation Contribution Adjusted for Past Experience

SE Supplementary Estimates

SIA Single Intelligence Agency

SR Spending Review

SUME Single Use Military Equipment

TLB Top Level Budget

UK United Kingdom

UOR Urgent Operational Requirement

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Annex 3

RDEL Commodity Structure

Commodity Block Major Cost Categories

Service Personnel Costs

Military and other ranks pay and other allowances; SCAPE; Employer’s National Insurance Contributions (ERNIC)

Civilian Personnel Costs

Civilian pay and other allowances; pension contributions; Employer’s National Insurance Contributions (ERNIC)

Infrastructure Costs Property management; service charges;IT & communications costs; utilities costs.

Inventory Consumption

Munitions; stores; fuel (marine & aviation); clothing; other materials consumed e.g. stationary, sundries, general stores etc.

Equipment Support Costs

Equipment support costs, including leases & hire charges for plant, machinery and transport.

Other Costs & Services

Travel & subsistence; professional services & fees; training.

Research and Development

Research and Development expenditure is incurred mainly for the future benefit of the Department. Such expenditure is primarily incurred on the development of new single use military equipment (SUME) and on the improvement of the effectiveness and capability of existing single use military equipment.

Receipts and Other Income

Receipts from various sources; costs recoveries; dividends; interest.

Cash Release of Provisions

Nuclear and non nuclear provisions e.g. staff redundancies, legal costs, environmental, etc.

Arms Length Bodies CRFCA; Royal Hospital Chelsea; National Army Museum; RAF Museum; National Museum of the Royal Navy; Commonwealth Ware Graves Commission. Single Source Regulations Office

Ring Fenced Non Cash: Depreciation/ Impairments

Depreciation and impairments on Non current Assets (Property, SUME, dual purpose).

DE&S BTE All of the above commodities are now presented as a Net Resource Position. DE&S BTE has its own Accounting Officer answerable directly to Parliament and Published Executive Agency Accounts which will contain this detail War Pensions Benefit With the introduction of the Armed Forces Compensation Scheme, the scheme was closed to new claimants from 5 April 2005. This has moved from AME to the DEL portion of the MOD Vote.

April 2015.

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