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May 24, 2018

UK faces £2.9bn affordability gap to maintain Nuclear Enterprise

A new report released by the National Audit Office (NAO) has revealed that the UK Ministry of Defence (MoD) is facing an ‘affordability gap’ of £2.9bn with regards to the maintenance of the country's Defence Nuclear Enterprise.

A new report released by the National Audit Office (NAO) has revealed that the UK Ministry of Defence (MoD) is facing an ‘affordability gap’ of £2.9bn with regards to the maintenance of the country’s Defence Nuclear Enterprise.

The MoD will be required to bridge the affordability gap between 2018 and 2028 to successfully address the funding deficit.

The report also suggests the ministry will have to manage its people, contractors and schedule more effectively in order to maintain the submarine-based nuclear deterrent, which currently supports the UK Government’s national security policy.

"The MoD will need to reduce costs, identify efficiencies and re-programme work schedules in order to maintain the Defence Nuclear Enterprise."

NAO head Amyas Morse said: “As the department invests heavily in the Dreadnought-class submarines and more widely across the Enterprise, it needs to ensure that the new structures, processes and workforce operate effectively together to manage the £2.9bn affordability gap across the Enterprise.”

The Royal Navy initially commenced the construction of its Dreadnought-class submarines in October 2016.

The vessels have been designed to gradually replace the four Vanguard-class boats beginning from the early 2030s.

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NAO’s latest report also warns that the timeframe for the construction of the Dreadnought-class ships will be affected by progress with the development of other Royal Navy submarine programmes.

The construction schedule is also expected to affect the support and maintenance requirements of in-service submarines.

Additionally, the MoD will be required to coordinate its estate plans to build the necessary facilities, including sufficient dock capacity for the maintenance of the new submarines, as well as the decommissioning and dismantling of 20 navy boats.

The defence department anticipates that it will spend £50.9bn on nuclear equipment and other support programmes between 2018 and 2028.

Furthermore, the MoD will need to reduce costs, identify efficiencies and re-programme work schedules in order to maintain the Defence Nuclear Enterprise, the report added.

The department previously signed a number of contracts worth a combined £960m in March for the second phase of production for the Dreadnought-class ships, in addition to £1.5bn worth of contracts for the development of the seventh and final Astute-class submarine.

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