MoD major project costs increase by £466 million

17 November 2011

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17 November 2011 | Adam Leach

Poor central planning decisions, technical issues and currency fluctuations have resulted in a cost rise of £466 million for the Ministry of Defence’s 15 largest projects, according to an audit report.

The Major Projects Report 2011, published yesterday, by the National Audit Office (NAO) concluded that completing the 15 projects, which include delivering the Astute Class submarine and Watchkeeper unmanned aerial vehicle, would now cost £6.1 billion, an increase of 0.9 per cent.

NAO chief Amyas Morse, said: “The Ministry of Defence has been hampered by a legacy of poor planning and performance on some past projects and the resulting cuts and delays are not value for money.”

The study noted that while cost overruns in specific projects contributed £53 million to the cost rise, the level of increase was lower than in the previous year, suggesting improved efforts by the department to counter the “legacy of poor planning”. Morse, said: “It is welcome news that the department has finally accepted that the financial position it is in is serious and is actively working towards balancing its books in the longer term.”

Margaret Hodge MP, chairwoman of the Committee of Public Accounts, said: “The report highlights continuous poor planning and performance with the result that the Ministry of Defence’s largest military equipment projects are delivering less, at a greater cost than planned, and taking longer to be completed.”

In September, a report by the Labour Partyproposed that the MoD make defence procurement a career path for militaryofficers and create a Weapons Engineering Service to manage the development, career and pay of defence procurement staff to narrow the gap between financial and technical expertise. It said: “This would be a mixed civilian and military organisation and provide the opportunity for officers to enter as a permanent career move.”

Labour said this would maximise the expertise of military personnel in the procurement process.

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