'Money wasted at no benefit to the public' by MoD as millions lost in cancelled Royal Navy military projects
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The total amount of government waste across the departments reached several billions of pounds
Millions of pounds has been wasted by the Ministry of Defence (MoD) due to cancelled projects.
The Public Accounts Committee (PAC) has determined that £6.6bn of taxpayers money was lost across government departments. This was due to cancelling or retiring assets, write-offs, debts no longer being pursued, and fraud.
PAC said they consider losses incurred from cancelling projects after large sums have already been invested to be very poor value for money, and is calling on the government to analyse the root causes of recent large reported losses to identify how they can avoid these situations in the future.
The MoD was singled out for losing £1.6bn for the 2024-2025 period. PAC said this was “simply through cancelling projects due to changes in government policy and retiring assets from use”. High-profile examples include the cancellation of Project Watchkeeper, a programme that aimed to build an un-crewed aerial vehicle to process imagery for the British Army was cancelled in November 2024 to the tune of just over £734m.
These constructive losses were listed in the 2024-2025 annual report and accounts. The retirement of Landing Platform Docks HMS Albion and Bulwark were also listed as constructive losses of just over £428m. Cutting HMS Northumberland resulted in a book value loss of £66.7m, while slashing the RFA Wave Knight and Wave Ruler tankers to the tune of just over £58m. Other changes in direction included scrapping planned upgrades to HMS Iron Duke at the cost of £4.76m.
Clive Betts MP, Deputy Chair of the Public Accounts Committee, said: “We who serve in the public sector, both at the political and official level, are appointed as guardians of taxpayer money. At a time of such straitened financial circumstances for so many, we should never, ever be satisfied with time or money wasted at no benefit to the public. Yet here our report finds £6.6bn last year simply boiled off into the atmosphere as a loss, the victim of cancelled projects or changed priorities. Those who work hard to pay their dues should be rightly aggravated by this figure.”
The Home Office incurred a £290m loss related to cancelling the planned programme to relocate asylum seekers to Rwanda. The Department for Transport issued a £472m loss by cancelling eight road schemes, including the planned A303 tunnel under Stonehenge. Government departments also made special payments outside normal activities in the same period totalling over £293m.
PAC recommended that HMS Treasury should analyse the root causes of large reported losses, and report back to the committee by the end of the year. Mr Betts, Labour MP for Sheffield South East, said: “Our report holds up the Environment Agency and the Bank of England as exemplars which demonstrate that the judicious shepherding of public funds is possible, and that the government can and must improve in this area.
“Scoping out a well-governed project from the outset to avoid cancellations and huge public losses, looking to other countries for examples of best practice, and attracting and retaining the right skills are just a few of the recommendations in our report which could save billions if followed. Above all, we must reject the argument that high levels of fraud and waste are simply the cost of doing business in the public sector. They are not - they are the cost of complacency.”