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. This table includes expenditure on Conflict Prevention (RfR2).

Please refer to the Resource Accounting & Budgeting section to view important information relating to the introduction of the International Financial Reporting Standard (IFRS), the implementation of the Clear Line of Sight (CLoS) Alignment project and recent (and planned) accounting changes resulting from the publication of the Strategic Defence & Security Review (SDSR) which have led to significant presentational changes in the reporting of the 2010/11 accounts.

Further information about the quality of data and methods used in the production of these statistics, along with details of their intended use can be found in the Background Quality Report - Departmental Resources Statistics.
Inclusive of non-recoverable VAT at Current Prices (£ million)
  Outturn   Outturn   Outturn   Outturn   Outturn   Outturn     Outturn
  2004/05   2005/06   2006/07   2007/08   2008/09   2009/10     2010/11
Defence Spending
 32 515   33 164   34 045   37 387   38 579 || 40 246 r || 39 461
 
Departmental Expenditure Limits
 38 323   39 751   40 654   43 634   45 473 || 47 647   || 48 463
 
Resource DEL
 31 798   32 911   33 457   35 689   36 715 || 38 572   || 39 084
of which:
                            
      Expenditure on Personnel
 10 996   11 255   11 204   11 474   11 723 || 12 231   || 12 766
      of which: for Armed Forces
 8 047   8 263   8 423   8 646   8 937 || 9 481   || 9 888
                      for Civilians
 2 948   2 992   2 781   2 828   2 786 || 2 750   || 2 878
 
      Depreciation/Impairments1
 5 808   6 587   6 609   6 247   6 894 || 7 496 r || 4 075
      Cost of Capital2
 3 026   3 106   3 242   3 371   3 626 || 3 828   || *
      Equipment Support3
 3 623   3 542   3 793   4 272   4 292 || 4 212   || 4 689
      Stock Consumption4
 1 079   1 039   1 140   1 071   1 181 || 1 112   || 1 154
      Property Management5
 1 509   1 367   1 258   1 523   1 508 || 1 625   || 1 629
      Movements6
 711   729   774   858   975 || 929   || 856
      Accommodation & Utilities7
 581   735   786   750   866 || 688   || 692
      Professional Fees8
 565   553   482   471   391 || 308   || 316
      Fuel9
 239   369   416   537   695 || 482   || 628
      Hospitality & Entertainment
 6   5   4   4   4 || 4   || 2
      PFI Service Charges
 *   870   1 148   1 276   1 482 || 1 133   || 1 077
      IT & Communications
 678   643   719   655   852 || 886   || 996
      Research and Expensed Development
 996   994   988   952   1 115 || 1 222   || 1 125
      Rentals Paid Under Operating Leases
 229   72 r 138   152   148 || 254   || 229
      Fixed Assets Written Off/Written On10
 - 86   - 302   730   870   424 || - 95   || 4 927
      Movement in Stock Related Provisions
 *   *   *   137   - 250 || 322   || 341
      Stock Written Off
 704   759   95   432   130 || 374   || 638
      Other Costs10,11
 1 134   588 r - 69   637   659 || 1 560 r || 2 945
 
Capital DEL
 6 525   6 840   7 197   7 945   8 758 || 9 075   || 9 379
of which:
                            
      Expenditure on Fixed Asset Categories
                            
 
      Intangible Assets12
 1 580   1 550   1 744   1 756   1 311 || 1 271   || 1 365
      Land and Buildings
 388   31   45   126   163 || 246   || 324
      Single Use Military Equipment13
 435   402   404   657   552 || 504   || 699
      Plant, Machinery & Vehicles
 124   64   32   36   30 || 299   || 51
      IT & Communications Equipment
 134   180   206   361   336 || 347   || 320
      Assets Under Construction14
 4 335   4 879   5 099   5 450   6 515 || 6 277   || 6 596
      Transport
 73   13   33   55   239 || 73   || 79
      Capital Loan Repayment
 - 25   - 53   - 8   - 10   - 65 || - 8   || - 11
      Capital Income15,16
 - 519   - 225   - 358   - 486   - 323 || - 111   || - 92
      Other Costs17
 *   *   *   *   * || 176   || 49
 
AME
 908   890   582   510   214 || 2 417   || 7 881
of which:
                            
      War Pensions
 1 110   1 067   1 038   1 014   1 000 || 980   || 935
      Other18,19,20
 - 202   - 177   - 456   - 504   - 785 || 1 437   || 6 946
Source: DASA(Defence Expenditure Analysis) and Defence Resources
1. Under HM Treasury guidance, from 2009/10 elements of Impairments are now scored under Annually Managed Expenditure (AME). Impairments are defined as an unexpected or sudden decline in the service utility of a capital asset, such as a factory, property or vehicle. This could be the result of physical damage to the asset, obsolescence due to technological innovation, or changes to the legal code. Impairments can be written off. By their nature, Impairments are market driven and cannot be controlled hence why they are scored in AME. The increase in RDEL Depreciation in 2009/10 is due to the write-off of a number of MOD fixed assets.
2. More information on the removal of Cost of Capital from the 2010/11 Resource DEL figures can be found in the Resource Accounting & Budgeting section.
3. Internal and contracted out costs for equipment repair and maintenance.
4. Consumption of armament, medical, dental, veterinary, oil, clothing, and general stores.
5. Estate and facilities management services and costs for buildings' maintenance.
6. Cost of transportation of freight and personnel.
7. Charges include rent, rates, gas, electricity, water and sewerage costs.
8. Fees, such as legal costs, paid to professional organisations.
9. Relates to fuel consumption by military vehicles, ships and aircraft.
10. Figures in 2010/11 include a large increase in Fixed Assets Written On/Off and "Non-cash Accounting consequences of cancelled projects" following the SDSR. More details can be found in the Resource Accounting & Budgeting section.
11. Other Costs (RDEL) can include Grants-in-Aid, Exchange Rate Movements, Provisions, Receipts, Welfare, Medical and Legal Costs. Movement in Stock Related Provisions previously shown under 'Other Costs', are now shown separately.
12. Intangible Assets comprise the development costs of major equipment projects and Intellectual Property Rights.
13. Single Use Military Equipment (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.
14. 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.
15. The figure in 2004/05 includes proceeds from the partial redemption of QinetiQ preference shares.
16. Capital income is receipts for the sale of fixed assets.
17. Other Costs (CDEL) includes long term debtors and movement on derivatives previously included in Capital Income.
18. This category contains only demand led payments, such as Cash Release and Cost of Capital Credit on nuclear provisions and QinetiQ loan repayments.
19. The large increase in Other AME in 2009/10 is mainly due to the movement of Impairments from Resource DEL to Annually Managed Expenditure following guidance issued by HM Treasury. The negative figures in previous years have largely been due to fluctuations in the level of Derivatives, which are a set of financial instruments whereby MOD buy forward contracts at a certain rate to lock into a level of payment. The value of Derivatives recorded in the Accounts is the difference between what the Department would have paid if it had bought at a spot exchange rate against what it actually paid buying a forward rate. In 2008/09 the Department made large gains (scored as a negative in the Accounts) in Derivatives due to fluctuations in US Dollar and Euro exchange rates: in 2009/10 the gain was not significant.
20. Further details of the large increase in AME in 2010/11 can be found in the Resource Accounting & Budgeting section.