ABSTRACT
The Treasury is undoubtedly the MoD’s most powerful adversary within Whitehall. This chapter thus begins by exploring the reasons for the constant tensions which characterise their relationship with regard to the management of the MoD’s finances and its apparent inability to live within its means. From this perspective, the MoD is handicapped by a well-deserved reputation as ‘recidivist over-spenders’, devoid of financial prudence or the management skills necessary to balance their annual budget – and particularly with regard to its equipment plan and the procurement budget. This indictment is considered in some depth before the examination leads to a discussion of the lack of candour (and indeed honesty) demonstrated by the MoD in managing its relationship with the Public Accounts Committee, the Defence Select Committee, Parliament and above all the Treasury – and the various methods it has employed to perpetrate these deceptions. Although the Treasury has a panoply of tools with which it is expected to control defence expenditure, the chapter concludes with a discussion of the limits upon its effectiveness in dealing with this large and wayward department.
