Navy Net - Royal Navy Community

This is a sample guest message. Register a free account today to become a member! Once signed in, you'll be able to participate on this site by adding your own topics and posts, as well as connect with other members through your own private inbox!

Former Defence Chiefs Challenge Gordon Brown Over Iraq

Also covered by The Times here: Defence chiefs attack Brown's Chilcot evidence

All the equipment procured under UORs since 2001 has placed an additional burden on the Defence budget for staffing, training and maintenance while equipment procured under normal funding has been consumed or worn out much faster than planned under original assumptions owing to nine years of continuous conflict in hostile environments.

Another objection is that the Defence Budget was predicated on the 1998 Strategic Defence Review but the Government then proceeded to double the commitments on which it was based. Until then, a 1.5% increase in Defence spending didn't look too bad even though 'defence inflation' was running at a much higher rate.

There was a triple whammy in that Resource Accounting & Budgeting (RAB) was also implemented in the MoD in 2001. As this imposed an initial 6% penalty (now 3.5%) per annum on all capital items (real estate, storage facilities, equipment, etc) owned by the MoD, there was a rush to dispose of many of its assets including come-in handy items (e.g. equipment and infrastructure only needed in war). The MoD then banked on clawing back the cash savings it had accrued in disposing of these assets but this was easier said than done.

Government-wide RAB is singularly unsuited for Defence because it is so difficult to measure tangible outputs against costs. Do you count wars averted, shipping lanes protected, intelligence gathered, bang per buck or maybe the number of enemy KIA? More info here:

Resource Accounting and Budgeting
HM Treasury said:
Resource Accounting and Budgeting (RAB) is a system of planning, controlling and reporting on public spending for government.

RAB was launched in 1993, with a commitment to introduce resource accounting. This was followed by a White Paper in 1995 (Cm2929), which gave a commitment to use resource accounting as the basis of public expenditure planning and control.

Resource Accounting is the application of accruals accounting for reporting on the expenditure of central government and a framework for analysing expenditure by departmental aim and objectives, relating these to outputs where possible.

UK Defence Statistics 2009
MOD DASA said:
Transition of Cash to Resource Accounting & Budgeting (RAB)

Up until financial year 1998/99, Government expenditure was accounted for on a cash basis. In April 1999 the introduction of Resource Accounting and Budgeting (RAB) brought in an accruals-based accounting system, although Government departments were still controlled on a cash basis. This transitional accounting regime remained for two financial years. Government expenditure has been accounted for on a resource basis only since 2001/02.

The main difference arising from the adoption of RAB is that costs are accounted for as they are incurred (the principle of accruals), rather than when payment is made (the principle of cash). This gives rise to timing differences in accounting between the cash and RAB systems and also to the recognition of depreciation, which expends the cost of an asset over its useful economic life, and the cost of capital charge, equivalent to an interest charge on the net assets held on the Balance Sheet. At the time that RAB was introduced the cost of capital charge was 6% of the net value of assets; although this was reduced to 3.5% in 2003/04.

Control regime


Under Resource Accounting, Government Departments are accountable for their spending against Resource and Capital Departmental Expenditure Limits (DELs). Spending against the Resource DEL includes current items, which are explained in the following two paragraphs. The Capital DEL, whilst part of the overall DEL, reflects investment spending that will appear on the Department's balance sheet and be consumed over a number of years, net of the receipts from sale of assets. Departments are also responsible for Annually Managed Expenditure (AME). This spending is demand led (for example, payment of War Pensions) and therefore cannot be controlled by Departments in the same way.

In Stage 1 of RAB, which was introduced at the start of financial year 2001/02, the Resource DEL covered current costs such as in year personnel costs, equipment, maintenance of land and buildings. Non cash costs such as depreciation and the cost of capital charge fell within Annually Managed Expenditure (AME) and were not controlled to the same degree as DELs. This allowed departments an interim period to gain experience of managing the new non-cash costs and to review their holdings of stocks and fixed assets, which impact the non-cash costs, prior to the charge impacting on the more tightly controlled DELs.

Stage 2 of RAB was introduced at the start of the financial year 2003/04. This involved the movement of the primary non-cash costs (depreciation and the cost of capital charge) from AME into the Resource DEL, and reduced the cost of capital charge to 3.5% of the net value of assets.

The change in definition of the DELs combined with volatile non-cash costs over the Stage 1 period make time series comparisons over the period 2001/02 - 2003/04 complex.

From 2006/07, the MOD has transferred ownership of fixed assets into two TLBs: Defence Estates (DE) for Land and Buildings; and Defence Equipment & Support (DE&S) for Plant and Machinery, Transport, IT and Communications equipment, and Single Use Military Equipment (SUME).

Factors affecting Cash to RAB data consistency

* There are timing differences as to when payments are recognised.

* The movement of Non-Cash items of expenditure from AME into the Resource DEL from 2003/04 onwards has the 'apparent' effect of inflating the Resource DEL.

* In financial year 2003/04 the rate of interest used to calculate the cost of capital charge was reduced from 6% to 3.5%.

* The discount rate for provisions was changed from 3.5% real to 2.2% real with effect from 1 April 2005.

* The discount rate for pensions liabilities was changed from 2.8% real to 1.8% real with effect from 1 April 2007.

Further information on the introduction of RAB can be found in Chapter 1 of UK Defence Statistics 2002 in the "Resource Accounting & Budgeting" section. Alternatively, more information can be found on the HM Treasury website at: http://www.hm-treasury.gov.uk/about/resourceaccounts/resourceaccounts_index.cfm
 

finknottle

Banned
It's amazing that these generals and spooks having now retired on a huge pension are happy to 'gob off', pity they had not done so at the time. Monty stood up to Churchill in WW11 when he wanted him to get stuck into the Germans in North Africa, Monty's response was that he would go when he was ready.
 

Bergen

ADC
finknottle said:
It's amazing that these generals and spooks having now retired on a huge pension are happy to 'gob off', pity they had not done so at the time. Monty stood up to Churchill in WW11 when he wanted him to get stuck into the Germans in North Africa, Monty's response was that he would go when he was ready.


 

finknottle

Banned
Excellent depiction of Blair (That would be the journey to hell would it?) and what is that hovering in the rear? How you know when a politician is lying. His/Her lips are moving.
 
Thread starter Similar threads Forum Replies Date
soleil Forces Network News: "Former Army Captain MP Blames 'Defence Cuts' For Labour Win In Military City" Bases / Shore Est 5
soleil Guardian: "Defence Cuts Diluting UK Influence, Says Former Navy Leader" Current Affairs 3
MoD_RSS Home Secretary appoints former Chief Constable to support police recruitment MoD News 0
MoD_RSS Former SSI steelworks site to be redeveloped under full local control MoD News 0
MoD_RSS Former waste bosses admit neglect by flouting permit rules MoD News 0
MoD_RSS Former football boss has bankruptcy restrictions extended MoD News 0
MoD_RSS Senior civil servant and former lecturer in medical statistics appointed to Joint Biosecurity Centre MoD News 0
MoD_RSS Former head of RAF to be appointed chair of the UK Civil Aviation Authority MoD News 0
MoD_RSS Former chair of ABI to lead flood insurance review MoD News 0
MoD_RSS Former Olympics director leads work to protect clinically vulnerable people MoD News 0
BreathingOutOnTheWayUp Now the former TURBULENT CO adds his advice on surviving lockdown. Submariners 19
soleil LadBible: "Former Navy Submariner Shares Coping Strategies For Self-Isolation And Social Distancing" Submariners 3
MoD_RSS Commission finds misconduct by charity who loaned half a million pounds to company of former trustee MoD News 0
MoD_RSS Former barrister has bankruptcy restrictions extended by court MoD News 0
MoD_RSS Former Government training centre sold to provide new homes and a retirement village MoD News 0
MoD_RSS Recovered appeal: land at former car parks, Tesco Store, Conington Road, Lewisham, London (ref: 3205926 - 22 January 2020) MoD News 0
MoD_RSS Former Derbyshire drift mine made safe to protect public and environment MoD News 0
MoD_RSS Recovered appeal: land at former Westferry Printworks site, 235 Westferry Road, London (ref: 3225474 - 14 January 2020) MoD News 0
soleil Mail: "RM Chiefs Spark Fury By Offering £10,000 'Golden Hello' Payments To Former Commandos To Rejoin" The Corps 15
A Nice group..... Former RM..... The Corps 4
BARNEYRNSM Former cadets I recruited into the RN SCC and URNU 3
MoD_RSS Court finds former trustees of disability charity in contempt of court MoD News 0
MoD_RSS Former BHS director disqualified for 10 years MoD News 0
MoD_RSS Former president of Institution of Civil Engineers to lead review of reservoir safety MoD News 0
MoD_RSS Court orders former Northumberland recycling business to pay over £50,000 after breaching environmental regulations MoD News 0
MoD_RSS Former solicitor’s restrictions extended for abusing client funds MoD News 0
MoD_RSS Press release: Former BHS warehouse makes way for new HS2 station MoD News 0
MoD_RSS Press release: Extended bankruptcy for former kennels owner MoD News 0
MoD_RSS News story: Payment scheme for former British child migrants MoD News 0
MoD_RSS Press release: ‘Don’t be a Space Invader’ - says former ‘Stig’ Ben Collins MoD News 0
MoD_RSS Press release: James Brokenshire prioritises social houses for former servicemen and women with PTSD MoD News 0
MoD_RSS Press release: Former trustees of MA 1985 (formerly Muslim Aid) criticised after investigation finds serious mismanagement MoD News 0
P Help finding a former RN submarine officer Submariners 9
Naval_Gazer Appeal for info about former Royal Marine The Corps 3
Ninja_Stoker Former RN Helicopter Controllers & Marine Engineers wanted RFA 0
M Documentary about John Aitken (Former T-Boat Skipper) Submariners 7
BARNEYRNSM Former cadets SCC and URNU 3
BreathingOutOnTheWayUp The former Nazi-era 'Wind-fall yacht', Sea Wraith. History 36
Wightsparker Former soldiers accused Current Affairs 12
Stirlin Former Booty becomes ref. The Corps 6
MoD_RSS News story: Former HMS Illustrious set to sail on her final voyage MoD News 1
MoD_RSS News story: Garden of Remembrance officially opens at former RAF Lyneham Base MoD News 0
Dusty31 Former HMS Beagle up for sale The Gash Barge 5
Stirlin Former York's Regiment soldier facebook comments goes viral. Current Affairs 1
Woody2654 Virgin Pitch to Rich vote for a former RM Charity 0
PedlarP Former Royal Navy chef jailed over £1m 'fake' sea bass scam The Quarterdeck 25
O Former Royal Navy man jailed for Helensburgh child rape Submariners 6
soleil Telegraph: "Former Navy Chief Accused Argentina Of 'Unacceptable Harassment'" Current Affairs 2
soleil Crosby Herald: "Former Captain Of HMS Eaglet Receives Merchant Navy Medal" Royal Naval Reserve (RNR) 0
soleil BBC: "HMS Endurance: Former Ice Patrol Ship To Be Scrapped" The Fleet 20
Similar threads


















































Top