Report slams MoD stock control

5 July 2011

5 July 2011 | Angeline Albert

The Ministry of Defence (MoD) has lost military assets worth £6.3 billion and does not know whether they still exist, according to a report out today.    

The House of Commons’ Defence Select Committee’s The performance of the Ministry of Defence 2009–10 highlighted inventory control as a major concern.

The report said insufficient evidence was provided for inventory of military equipment, which included £568 million of assets such as firearms. The MoD could not confirm the location of 13 per cent (5,961) of Bowman radios, representing £184 million in 2009-10.

It said: “It is alarming that the department should be unaware of the location, usability or indeed the continued existence of assets to a total value of £6.3 billion, including radios worth £184 million.”

Committee chairman James Arbuthnot MP said: “The MoD’s inability to manage existing resources makes it harder for it to request additional funding. The committee finds it wholly unsatisfactory that the MoD expects that its stock control problems will probably continue for another two to four years.”

The select committee report said that when a National Audit Office (NAO) report found similar issues in 2008/09, the previous secretary of state told the same committee “if a vehicle fitted with a Bowman radio is broken in theatre...a soldier is able to take the Bowman radio out and keep that in theatre and the vehicle comes back to the UK...without the radio. That gives us a great degree of flexibility in theatre”.

The select committee report raised wider concerns about inventory accounts and warehouse systems in general. It said, following the NAO’s audit in 2008/09,the MoD had implemented key controls over inventory that were operated by the Defence Storage and Distribution Agency (DSDA).

However, the NAO told the Defence Select Committee: “While the routine inventory checks now carried out by DSDA comply with the department’s mandated requirements, these checks indicated that inventory recorded on the system did not match the stock count at 29 per cent of locations.” The NAO’s audit work identified “significant levels” of stock recorded on the system that could not be found on the shelves, and items on shelves that were unrecorded.

The MoD’s failure to adhere to International Financial Reporting Standards has resulted in the NAO’s decision to check the department’s accounts for the fourth successive year. Under the comprehensive spending review, the MoD must save £8 billion over the next four years.

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