CONFIDENTIAL
From: Mr N Bevan CB, Assistant Under Secretary of State
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MINISTRY OF DEFENCE
Main Building, Whitehall, London SW1A 2HB
Telephone (Direct Dialling) 01-218
(Switchboard) 01-218 9000
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AUS(C) 4/3/2 (345/91)
W D Reeves Esq Cabinet Office 70 Whitehall London SW1
Dear Bill,
ICE PATROL VESSEL
Mr Baker Bats
Mr. Goulden
Mr. Dew RMD
22 November 1991
One brife for this mB. with need to deal effecting with the theology +practice of Whan accounting convention
22/x1
Mr Griffithes
1/991 Friance Dr. Heap
Thank you for your letter of 12 November. I look forward to seeing the contributions you have sought from FCO, DES and DOE, on which I may wish to comment prior to your planned meeting.
You asked the MOD, consulting the Treasury, to provide advice about the precedents for the costs of a defence capability of marginal military value being borne elsewhere than on the defence budget.
First I should confirm that the current defence programme, on which this year's PES settlement was based, contains no provision for the replacement of HMS ENDURANCE. The capital costs (£25 million) and running costs (£6 million pa) of a replacement are thus unfunded (although the Defence Secretary agreed to meet the short term costs of POLAR CIRCLE's charter).
A variety of established arrangements are in place under which the MOD is reimbursed in one way or another for the cost of activities or commitments undertaken on behalf of other Government Departments. I attach at Annex A a comprehensive schedule of activities where charges are levied on OGDS in accordance with the principle that Defence Votes should not bear the costs of requirements stated by other Departments. addition to these examples, it is the case that from time to time additional funds are provided to the Defence Budget to meet the cost of unbudgeted activities. Thus the extra costs of Ops.
In
CONFIDENTIAL
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