It says this will be delivered through plans, among other things, to automate 20% of the MoD’s human resources and finance departments by 2028 and by cutting spending on consultants.
It also expects savings from accelerating the use of Artificial Intelligence, with around £50m a year of “digital” efficiencies.
The biggest efficiency savings – around £1bn a year – are supposed to come from reforms of “acquisition”, which means buying new defence equipment.
Defence procurement has historically been a source of major budget overruns for the MoD.
Public finance experts warned that it cannot be guaranteed that these savings will be delivered.
Carl Emmerson, a partner at consultancy London Economics, noted the government already has ambitious efficiency targets baked into its 2025 Spending Review settlements with individual departments, which set their budgets over the coming years.
“This just makes that challenge harder,” he said.
“Sometimes efficiency savings just means cuts and doing less and therefore delivering slightly less,” said Thomas Pope of the IFG.
