Concerns raised by MoD's moce to review finances of major projects '˜internally'
WHITEHALL is axing ties with a key independent watchdog just days after it revealed the Ministry of Defence would need to find almost Â£6bn worth of extra saving to achieve its 10-year equipment plan.
Last week, the National Audit Office (NAO) said the UK’s military was buying more equipment than it could afford.
In its report on Friday, the NAO said the possibility of running out of available cash – budgeted money and emergency funds – was greater than at any point since 2012.
And now it has been revealed the government will no longer be using the body to oversee its most expensive defence plans.
The arrangement had been in the pipeline for more than a year, with the NAO saying it oversaw the transfer.
But the move has concerned armed forces campaigners and politicians.
Andy Smith, chief executive of the Portsmouth-based UK National Defence Association, said: ‘At a time when the MoD is being heavily criticised over poor handling of procurement it seems unwise, and perhaps even suspicious, for the ministry to be doing this.
‘The NAO is an independent body and it seems to me the more independent oversight of MOD spending the better.’
Defence procurement minister Harriett Baldwin said the MoD has decided to review its budgets ‘internally’ instead of having the NAO looking over the figures for major projects.
She told the UK’s defence select committee: ‘I think that in terms of the working relationship that we have had with the National Audit Office it’s been one that we’ve found very helpful and very valuable.
‘We now have our own internal way of measuring and approaching these projects on a quarterly basis and I think they (the NAO) are comfortable that that process is working well.
‘But we will obviously always be able to engage the NAO if we think that would be something that we could supplement what we’re doing internally.’
Committee chairman Dr Julian Lewis was stunned by the news. He said: ‘This just seemed rather surprising given the centrality of that report normally to keeping an eye on what goes on with the most expensive equipment projects.’
Councillor Gerald Vernon-Jackson, deputy chairman of the Local Government Association, has since voiced his concerns.
He said: ‘The Ministry of Defence is disastrous with money. Their procurement process is a disaster and has been for years.
‘This move seems like madness.’
The NAO said it is comfortable with the new arrangement – which it suggested to the MoD some 15 months ago.
The watchdog said it will continue to scrutinise government expenditure and would maintain a keen eye on various other defence projects but that the MoD would scrutinise its own major project reports (MPR).
A spokesman said: ‘We assessed that MoD’s internal controls are strong enough for them to validate the MPR work themselves, using their cost assurance and analysis service. This frees up our resources to do other defence work.’