Ministry of Defence needs 'strong leadership' to tackle equipment delays, watchdog warns

A review by the National Audit Office (NAO) of the MoD’s 20 largest programmes – worth £120bn – found 13 were behind schedule, with delays totalling 254 months.

Across 12 of the programmes where there was comparable data, nine had seen their forecast costs increase – in three cases by 59 per cent or more.

Among the programmes blighted by delays includes the £1.25bn scheme to build a new series of Type 31 frigates for the Royal Navy, expected to be based in Portsmouth when not stationed abroad.

In last year’s spending review, the MoD was allocated an additional £16.5bn in capital funding over four years – in part to address the ‘affordability gap’ in the equipment programme.

The NAO said it underlined the need for the MoD to address persistent issues, ranging from under-performance by a limited range of specialist suppliers to its own weaknesses in contract management.

It said the MoD and its suppliers regularly underestimated the scope and technical complexity of projects, while the department was forced to prioritise short-term solutions because of its ‘affordability challenges’.

The MoD must, it said, be willing to learn lessons, including ‘being honest in acknowledging and learning from examples of poor value for money when they occur’.

The head of the NAO Gareth Davies said: ‘Too often, the MoD doesn’t deliver its major equipment contracts as planned due to a combination of supplier underperformance, a failure of the MoD and suppliers to get to grips with the technical complexity of projects, and short-term solutions to affordability problems.

‘To ensure defence contracts deliver value to taxpayers, the MoD must follow through on its efforts to embed good practice in its relationship with suppliers.

‘Strong leadership and skilled staff are needed to translate good intentions into results that deliver real benefits for the armed forces and value to taxpayers.’

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The comments come weeks after MPs on the all-party public account committee voiced their concern over the procurement plan.

The committee added that some projects are moving at a ‘snail's pace’, and pointed to delays in building accommodation, new support ships for the navy's two aircraft carriers, and decommissioning older nuclear submarines.

Meg Hillier, committee chairman, said: ‘We've seen over many years, the Ministry of Defence is one of the worst culprits in not managing its budget well,

‘The personal consequences are immense, that means kit delivered late, it means sometimes it's downgraded at a later stage,’

The MoD said it would carefully consider the NAO’s recommendations.

‘Aided by our £24bn spending settlement, we remain committed to delivering value for money through new streamlined processes and developing our industry contracts with a focus on delivery,’ a spokesman said.

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