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Last Updated: Friday, 24 November 2006, 03:22 GMT
Defence deals 'to be years late'
Soldiers
The MoD said it was negotiating harder with manufacturers
The Ministry of Defence's biggest equipment purchases will be delivered almost three years late on average, a report suggests.

The National Audit Office also found the 19 deals it monitored would cost 27bn - 11% over the original budget.

But its report said yearly increases to delays had "slowed" and that the MoD had recognised the "need to tighten its control of costs".

The Tories said there was a "growing crisis" in the military.

Less increase in delays

The NAO looked at orders for equipment such as air-to-air missiles, armoured vehicles, radios and submarines.

The average delay in delivery would be 33 months, it found.

Orders fell further behind by an average of 1.7 months last year - compared with 2.4 months the year before.

We are going to turn this charity into a business
Sir Peter Spencer, MoD

Five of the 19 deals looked at dropped further behind schedule, with 12 staying the same and two being realised earlier than anticipated.

Forecast costs for the next generation of nuclear submarines - known as the Astute Class - increased by 164m last year because of "technical factors".

Those for the new Type 45 destroyers went up 157m.

'Could leave gaps'

The NAO revealed that the MoD had made savings of 333m over the year, but noted that some of this money had been found by reducing orders.

It warned that this could leave gaps in future fighting capability.

But Procurement Minister Lord Drayson said of the latest report: "I am pleased that the NAO has recognised the work that we have done to tighten our control of costs and live better within our means while continuing to deliver top class equipment to our troops.

"We must trade performance, cost and time to live within our means. We will benefit in the longer term from the tough decisions we have taken now".

Chief of Defence Procurement Sir Peter Spencer said the MoD was refusing to pay "inflated" prices demanded by manufacturers to use Typhoon planes to test the new Meteor missiles.

The missiles are considered vital weaponry for the new European fighter aircraft.

Sir Peter said: "We are going to turn this charity into a business, and a cost-effective business.

"We are not prepared to pay inflated prices for risks we believe should be under the control of industry.

"We have found a less risky way through...until we get a more sensible proposal."

But Edward Leigh, chairman of the Commons public accounts committee, said: "You don't get something for nothing - so it leaves me wondering what cuts have been made in other parts of the military to accommodate this financial reshuffle."

Shadow defence secretary Liam Fox said: "The MoD is resorting to reducing the quantities of equipment on order as a way of saving money for the Treasury.

"With our commitments increasing, this seriously risks hindering the government's ability to provide our forces with the equipment they need to conduct future operations."

The armed forces were 6,330 below their required strength at the beginning of October - with the deficit up from 5,170 in July, MoD figures show.


SEE ALSO
UK armed forces 'below strength'
03 Nov 06 |  UK Politics
MoD 'letting down armed forces'
13 Oct 05 |  UK Politics

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