- 15 procurement projects have overspend of £6.1billion
- £42billion black hold in Ministry of Defence budget
By
Ian Drury
Last updated at 12:00 AM on 10th February 2012
The cost of Britain’s biggest military programmes has soared by £500million in a year because ‘wasteful’ defence chiefs failed to ‘live within their means’.
A withering Commons report today finds that 15 crucial procurement projects are £6.1billion – or 11.4 per cent – over budget.
The spiralling bill for new equipment, including ‘hunter-killer’ submarines, fighter jets, aircraft carriers and transport planes, is revealed as the Armed Forces are ordered to make crippling cuts.
Axed: The decision to scrap the fleet of Nimrod MRA4 maritime surveillance planes led to £3.4billion of taxpayers¿ money being wasted.
Furious commanders are axing 22,000 troops and fleets of warships, ships and armoured vehicles to fill a £42billion black hole in the Ministry of Defence’s budget.
But the woeful state of the sprawling department’s finances mean there are ‘significant risks’ that the military will be forced into more ‘unpalatable’ reductions, said MPs on the Public Accounts Committee (PAC).
The damning report expressed ‘concern’ that despite the swingeing cuts the price tag for largest equipment programmes had risen £466million in the past 12 months.
Since the major projects were originally approved, the cost has rocketed from £54billion to £60billion.
And the timetable for delivering the much-needed equipment has slipped by a total of nearly 27 years.
The increase has been blamed on ministers adopting a ‘save now, pay later’ approach to buying state-of-the-art hardware.
Pushed back: The delay in the completion of seven Astute-class hunter-killer nuclear submarines has increased the bill for them by £1.4billion
The Government has delayed much-needed aircraft carriers and planes and slashed orders for helicopters and trucks in a short-term bid to balance the books, according to the spending watchdog.
The MoD’s controversial decision to scrap a fleet of partially-built Nimrod MRA4 maritime surveillance planes led to £3.4billion of taxpayers’ money being wasted.
Delaying building seven sophisticated Astute-class nuclear submarines increased the bill by almost £1.4billion to £5.7billion.
And pushing back the in-service date of the Royal Navy’s two new 65,000-tonne aircraft carriers has bumped up the price by £1.5billion – to £5.1billion.
Modifying the ships with new landing gear – known as ‘cats and traps’ – so planes could take off and land would add another £1.3billion, the PAC reported.
In a scathing conclusion, the report said: ‘The taxpayer has too often had to pick up the bill when the risk, complexities and therefore costs have been underestimated.’
Cutting equipment numbers after contracts had been signed also represented ‘poor value for money’ because it ‘invariable’ increased the cost of each unit.
The PAC criticised the MoD for having its budget only ‘broadly in balance’ despite the 2010 Strategic Defence and Security Review and two subsequent cost-saving exercises.
MPs also warned that a 1 per cent real terms increase in the equipment budget promised by the Treasury from 2015 might be ‘unrealistic’ because of the current spending squeeze.
‘It is unacceptable that the department still cannot identify the extent of the current gap between resources and expenditure,’ said the report.
‘Until the budget is balanced there remain significant risks to cutting or cancelling existing projects.
‘We remain concerned about the potential consequences to current and future defence programmes if the Department receives lower than expected funding.’
Public Accounts Committee chairman Margaret Hodge, left, said the MoD needed to to be more realistic about the cost of major projects. Defence Secretary Philip Hammond, right, said reforms had done much to get to grips with spending
Committee chairman Margaret Hodge said: ‘Rather than the over-optimism which has held sway at the start of major projects, what is needed is realism: about the complexities of projects, the long-term costs of decisions taken today and the implications down the line of short-term budget cuts.’
Defence Secretary Philip Hammond said: ‘Through a radical reform programme we have taken firm steps to grip the equipment programme and halt the trend of vast cost increases of the past.
‘The overall increase this year was seven times lower than Labour’s last year in office which saw a cost increase of over £3.3bn.
‘Much has been achieved in clearing up the mess left by the last Government and we are now close to eliminating the black hole in the MoD’s finances and will soon set out an affordable, deliverable programme.’
Share this article:
Here’s what other readers have said. Why not add your thoughts,
or debate this issue live on our message boards.
The comments below have not been moderated.
-
Newest -
Oldest -
Best rated -
Worst rated
If they are thieves get rid of them. If they are incompetent with public money get rid of them. Which is it??
Report abuse
defence of the realm is the government number one priority above all else. In these hard times, cutting defence will be seen as a bad move. When we do have to rearm, it will be from a position of significant weakness
Report abuse
The government might have changed but it’s still the same civil servants making all the mistakes! If they can’t do the job, SACK them!
Report abuse
So glad you’ve got the MoD under control Dave. Just like all your other failures, u-turns and lies. lol
Report abuse
Anyone and everyone who wastes taxpayers money, should be sacked. It’s the only way you are going to stop this continuous nonsense, public sector workers, with no responsibility, expecting a golden handshake and a gold plated pension and a gong from the Queen for services to the country.
Report abuse
– The More They Scrap,.. The More They Waste,.. Thankyou Cameron,.. You Idiot…….!
Report abuse
The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.
Related posts:
Views: 0