Page last updated at 11:45 GMT, Tuesday, 15 December 2009

MoD delays 'driving up costs' of forces' equipment

Quentin Davies: ''We have to decide on priorities''

Short-term delays are driving up the cost of major military procurement projects by billions of pounds, the National Audit Office has said.

The public spending watchdog warns of a £36bn deficit over the next 10 years if the defence budget is not increased.

It criticised the Ministry of Defence's "save now, pay later" approach to try to clear the potential deficit.

Defence minister Quentin Davies said delays and yearly managed budgets were "an inescapable fact of life".

Budgetary 'black hole'

Among the delays highlighted by the National Audit Office was the project for the new Queen Elizabeth Class aircraft carrier.

It has been put back to save £450m over four years - but auditors say that will eventually increase costs by £1.12bn.

Its report said the cost of the 15 biggest military projects had increased by £1.2bn in 2008-9 alone, and £733m of that was down to deliberate delays.

This constant failure to contain cost and keep to timetable means that taxpayers' money is being wasted
Shadow defence secretary Liam Fox

Auditor general Amyas Morse said: "The MoD has a multi-billion pound budgetary black hole which it is trying to fix with a 'save now, pay later' approach."

It represented "poor value for money" and heightened the risk that equipment would not be available when needed, or in the quantities promised, he added.

The Conservative chairman of the Commons public accounts committee, Edward Leigh, said the MoD was "building up trouble for the future".

'Shambolic'

Shadow defence secretary Dr Liam Fox added: "This constant failure to contain cost and keep to timetable means that taxpayers' money is being wasted and our armed forces are being denied vital equipment which has meant a reduction in capability.

"It is shambolic."

Defence minister Quentin Davies accepted the need to "address shortcomings in our long-term equipment planning" and said a strategy to reform the process would be published in the New Year.

But he said: "There are always these time substitution decisions in any investment programme and one has to face that fact. It's an inescapable fact of life."

He insisted the government was committed to the aircraft carriers but said they would not be needed as quickly as they were being built and delaying them would have no cost for defence capability.

Mr Davies claimed the Conservatives were "clearly planning to cancel them if they get into power" and said the government's priority was ensuring frontline troops in Afghanistan had the required equipment.



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