NAO reports MoD projects still 'late and over budget'

1 December 2005
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01 December 2005 | Anusha Bradley

The Ministry of Defence is failing to apply principles of a procurement programme adopted six years ago.

That is the verdict of the National Audit Office's Major Projects Report 2005. It says the MoD has also fallen a further 45 months behind on delivery dates and is over budget.

While costs of the MoD's 20 largest ventures are projected to be £699 million less than last year, the NAO said this is because it is buying fewer, and less sophisticated, pieces of equipment. It added that projects were still expected to be £29 billion in the red on completion.

The NAO said the implementation of Smart Acquisition, introduced in 1999, is an "ongoing process, which the department is actively trying to embed fully".

"We are concerned at the extent to which factors that should have been identified as risks, such as technical issues or the contracting process, contribute to time and cost increases each year," the report said.

Speaking at a press conference, defence procurement minister Lord Drayson said there was a "trend of improvement".

But NAO head Sir John Bourn said in a statement: "It's too early to judge whether this is the start of a sustained improvement."

Edward Leigh, Conservative chair of the Public Accounts Committee which described the MoD's 2004 performance as "woeful", added: "There have been too many false dawns. Congratulations or celebrations would be premature."

Asked why the MoD consistently failed to deliver major projects on time and to budget, Lord Drayson said the procurement challenge was a "very hard one".

He said the complex network of threat, changing technology and working with global partners added to complications.

SMdec2005

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