MoD faces claims of “poor value for money” purchasing

15 October 2010

16 October, 2010 | Angeline Albert

Purchasing decisions at the UK’s Ministry for Defence (MoD)  are ‘poor value for money’ according to the National Audit Office.

In the report, the NAO criticized the decision to put off spending on equipment to balance books.

“Central departmental decisions were taken to balance the defence budget which had the effect of driving very significant additional cost and delay into the equipment programme; this represents poor value for money for the taxpayer," said Amyas Morse, head of the NAO.

The forecast cost of the MoD’s 15 largest projects for 2009/10 is £67.1 billion, but the cost of these projects has increased by £3.3 billion.

“The reasons for the cost increase illustrate both the causes and effects of the department’s inability to manage its budget effectively and represent poor value for money for the taxpayer,” said the report.  

Another MoD decision to reduce the number of support vehicles bought by 1,303, because a change in operational requirements, increased the unit costs incurred.

As a result of the MoD’s decision to reduce the number of Nimrod MRA4 reconnaissance aircraft purchased from 21 to nine, the unit cost is now three times the figure that was expected when the investment decision was made.

The NAO’s report said: “Perpetuating the cycle of over-committed plans, short-term cuts and re-profiling of expenditure would mean the continuation of poor value for money for the taxpayer on the projects affected and a reduction in the funds available to support front-line activities.”

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