Chapter 1 - Finance
Table 1.3 Principal Headings of Defence Expenditure Outturn (Resource basis)
This table provides a breakdown of defence outturn in terms of resources consumed. This is distributed between the main personnel, fixed assets and other expenditure groups. These groupings differ from those used under cash accounting and are not directly comparable.
 
This table includes expenditure on Conflict Prevention (RfR2).
RAB Stage 2
Inclusive of non-recoverable VAT at Current Prices (£ million)
      Outturn   Outturn   Outturn   Outturn   Outturn
                       
      2003/04   2004/05   2005/06   2006/07   2007/08
Defence Spending
   30 861   32 515   33 164   34 045   37 407
                       
Departmental Expenditure Limits
   37 174   38 323   39 751   40 654   43 654
                       
Resource DEL     31 266   31 798   32 911   33 457   35 709
of which:                      
  Expenditure on Personnel   10 435   10 996   11 255   11 204   11 485
  of which:            for Armed Forces   7 974   8 047   8 263   8 423   8 649
                             for Civilians   2 461   2 948   2 992   2 781   2 836
                       
  Depreciation/Impairments   6 313   5 808   6 587   6 609   6 247
  Cost of Capital   2 770   3 026   3 106   3 242   3 371
 
Equipment Support1
   3 804   3 623   3 542   3 793   4 272
 
Stock Consumption2
   1 060   1 079   1 039   1 140   1 071
 
Property Management3
   1 393   1 509   1 367   1 258   1 523
 
Movements4
   491   711   729   774   858
 
Accommodation & Utilities5
   643   581   735   786   750
 
Professional Fees6,7
   549   565   553   482 r 471
 
Fuel8
   161   239   369   416   537
 
Hospitality & Entertainment
   8   6   5   4   4
 
PFI Service Charges
   *   *   870   1 148   1 276
 
IT & Communications
   738   678   643   719   655
 
Research and Expensed Development
   1 011   996   994   988   952
 
Rentals Paid Under Operating Leases
   214   229   56   138   152
 
Fixed Assets Written Off/Written On
   26   - 86   - 302   730   870
 
Stock Written Off
   528   704   759   95   432
 
Other Costs9
   1 121 r 1 134 r 604 r - 69 r 783
                       
                       
Capital DEL     5 908   6 525   6 840   7 197   7 945
of which:                      
  Expenditure on Fixed Asset Categories                    
  Intangible Assets10   1 665   1 580   1 550   1 744   1 756
  Land and Buildings7   54   388 r 31   45   126
  Single Use Military Equipment7,11   90   435 r 402   404   657
  Plant, Machinery & Vehicles   78   124   64   32   36
  IT & Communications Equipment   183   134   180   206   361
  Assets Under Construction12   3 931   4 335   4 879   5 099   5 450
  Transport13   *   73   13   33   55
  Capital Spares13   581   *   *   *   *
  Capital Loan Repayment   - 28   - 25   - 53   - 8   - 10
  Capital Income14,15   - 646   - 519   - 225   - 358   - 486
                       
                       
AME     1 011   908   890   582   510
of which:                      
  War Pensions7   1 116   1 110   1 067   1 038 r 1 014
 
Other7,16
   - 105   - 202   - 177   - 456 r - 504
Source: MOD Directorate of Performance and Analysis
1.   Internal and contracted out costs for equipment repair and maintenance.
2.   Consumption of armament, medical, dental, veterinary, oil, clothing, and general stores.
3.   Estate and facilities management services and costs for buildings' maintenance.
4.   Cost of transportation of freight and personnel.
5.   Charges include rent, rates, gas, electricity, water and sewerage costs.
6.   Fees, such as legal costs, paid to professional organisations.
7.   Minor revisions in 2004/05 and 2006/07 caused by rounding.
8.   Relates to fuel consumption by military vehicles, ships and aircraft.
9.   Other costs can include Grants-in-aid, Exchange rate movements, Provisions, receipts, welfare, medical and legal costs. Research and Expensed
      Development, Rentals paid under operating leases and Fixed Asset and Stock written off, that have previously been shown under 'Other Costs', are now
      shown separately.
10. Intangible Assets comprise the development costs of major equipment projects and Intellectual Property Rights.
11. SUME are assets which only have a military use, such as tanks and fighter aircrafts. Dual use items i.e. those that also have a civilian use are recorded
      under the other categories.
12. Assets Under Construction (AUC) largely consist of major weapons platforms under construction in the Defence Equipment & Support, and a smaller
      element of Buildings under construction. Once construction is complete, those platforms will transfer to the relevant Top Level Budget holder as SUME on
      their Balance Sheets.
13. From 2004/05 Transport has been recorded as a separate category and Capital Spares has been removed as a category, with the costs previously
      recorded here being incorporated into Transport or SUME.
14. Redemption of QinetiQ preference shares refers to the proceeds received from the partial redemption of the redeemable preference shares during
      2004/05.
15. Capital income is receipts for the sale of fixed assets.
16. Under Stage 2 of RAB, this category now contains only demand led payments, such as cash release and cost of capital credit on nuclear provisions and
      QinetiQ loan repayments.