4 March 2010 | Jake Kanter
The UK Ministry of Defence (MoD) has been accused of wasting millions of pounds and being “disingenuous” about its £21 billion equipment budget shortfall.
A damaging report published today by the Commons Defence Committee – made up of members of the three main political parties - said the MoD was spending millions on unproductive projects because it had commissioned more work than it could afford.
“It is shocking that the MoD has apparently made no attempt to calculate the extent of such costs and that it has therefore taken decisions to delay projects without understanding the full financial implications,” the report said.
It highlighted programmes, including those for armoured vehicles and aircraft carriers, where delays and strategy confusion meant the MoD was haemorrhaging costs.
The Gray review last year estimated that "frictional costs" to the department of equipment delays ranged from £900 million to £2.2 billion a year.
The committee report said MoD officials do not accept these estimates, but “were unable to provide alternative figures”. It added that during questioning, witnesses from the department were “at best confused and unhelpful and at worst deliberately obstructive” about the £21 billion funding gap.
MoD procurement was operating in “wonderland”, shadow defence minister Liam Fox said.
“Merely tinkering with this failed system is not enough. A radical overhaul is needed, which only a new Conservative government has the energy to provide.
“It would be irresponsible for any large procurement decisions to be made at the tail end of this dying government, and so we hope that the MoD will refrain signing any major non-urgent contracts until the procurement programme is fit for purpose.”
Last month the MoD published the Defence Strategy for Acquisition Reform which included plans to plough £45 million into improving procurement skills at Defence Equipment and Support.
Minister for Defence Equipment and Support, Quentin Davies, said: “We are currently managing some 2,000 projects and over the past two years, nearly 90 per cent have been delivered to cost and over 80 per cent have been delivered to time, but we recognise that further improvements must be made.
“That is why we commissioned the Bernard Gray Review into defence acquisition, accepted the majority of the Review’s recommendations and published the Strategy for Acquisition Reform.”