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Published on Tuesday, 27 June 2006 15:10
Massive cost
overruns and delays on major procurement projects for
the armed forces were attacked bya Committee of MPs who
called on the Ministry of D efence to stop
\"hand-wringing and get a firm grip\".
The
Commons Public Accounts Committee said the total
forecast cost of the largest projects remained £3bn over
budget at £29bn, while the average delay was 20 months
with some equipment, such as the Nimrod MRA4
reconnaissance aircraft, running more than seven years
late.
In its defence, the MoD blamed the cost
overruns on a small number of \"toxic legacy\"
programmes and told the MPs that the forecast cost of
its 19 largest projects had been cut by £700m last
year.
But the Committee said this cost reduction
had been achieved largely by reducing the amount of
weaponry on order or the capability of the kit. Edward
Leigh, the Committee\'s Chairman, said: \"This
hand-wringing has gone on far too long. It is now time
for the Department finally to get a grip on these
projects and provide truly realistic performance, time
and cost estimates.\"
The Astute submarine is
running 43 months late, while the Navy\'s new Type 45
destroyers will be two years late entering service. The
number required has been cut from 12 to 8.
The
Committee said that in deciding how to live within its
overstretched budget the MoD should not make short-term
cuts in equipment programmes for the sake of expediency
without first spelling out the longer-term negative
impact on capability and value for money.
It also
said that although the Ministry had got better at
setting meaningful in-service dates, these did not
always reflect when useable equipment would reach the
front line.
The Committee also served notice that
the £3.5bn collaborative project with France to build
three new aircraft carriers for the Navy should not turn
into a re-run of the pan-European Eurofighter Typhoon
programme. This has been offset by chronic cost and time
overruns and \"lack of management direction\" caused
by work being handed out on the basis of the number of
planes each country is buying rather than which
contractors can provide the best value for
money.
The MPs said that on joint defence
projects with the US, the UK\'s influence had been
reduced because it was the junior partner. But the
opposite was the case with large pan-European programmes
where a lack of leadership had stymied
progress.
The Ccommittee also said that the MoD
needed to do more to improve the performance of its
second and third-tier suppliers if it wanted to bring
its procurement budget under better control rather than
concentrating as it does on its 18 largest suppliers.
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