NAO criticises late and expensive defence projects

27 November 2006
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27 November 2006 | Paul Snell

The total cost of the Ministry of Defence's (MoD) 20 largest procurement projects rose by 11 per cent over the past year, according to a report by the National Audit Office.

The Major Projects Report 2006, published last week, reveals the total cost of the deals reached £27 billion.

The schemes, which include the Astute-class submarine (Features, 16 November), slipped a further 33 months behind schedule last year, an average of 1.7 months per project. They have now been delayed by up to 36 years.

Edward Leigh MP, chairman of the public accounts committee, said: "When news of an additional 33 months delay is called a step in the right direction, it tells us plenty about the MOD's track-record in project management."

The MoD has identified £781 million of savings that can be made on the work, according to the report. This will partly be achieved by buying fewer items and better contract management. The bulk of the savings will, however, be made by transferring costs away from procurement and into other budgets, such as project support.

Sir John Bourn, head of the NAO, described allocating costs to budget holders who can manage them more effectively as a sensible step.

SMnov2006

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