Further Reading
- The Major Projects Report 2010
Member News
The MoD has failed to end the "cycle of failure" which has seen delays and large scale overspending, MPs have warned.
The House of Commons public accounts committee said delays in procurement and overspending by the MoD had to be addressed.
It recommended the MoD provided its forecast for implementing last year's Strategic Defence and Security Review (SDSR) by April.
The report said weapon projects that had been stopped or delayed have cost the taxpayer more than £8bn, with the decision to cancel four major equipment projects.
MPs said cancellation and destruction of the Nimrod and Sentinel surveillance aircraft would jeopardise troops' lives with "increased operational risks" and a £5bn cost to the taxpayer.
The committee was responding to a National Audit Office report which found in October that the "black hole" in MoD procurement had increased by £3.3bn in Labour's final year in office.
The report said: "A balanced and affordable defence programme is vital to achieving value for money from defence acquisition.
"It is an area where the department has failed to deliver, with adverse affects on value for money and military capability."
Committee chair Margaret Hodge said that an good progress made on individual defence projects had been "overshadowed by the MoD's continuing failing" on important major projects.
Speaking to Radio 4's Today programme, she said there had also been evidence that some projects were levered in to budgets in the hope that the Treasury would pick up the bill for extending the schemes.
Hodge rejected defence secretary Liam Fox's claim that Labour were to blame for the financial mismanagement at the department, including the scrapping of Nimrod.
She told the programme: I just think that the Labour government got things wrong but I think it is naive and wrong to presume that you can simply blame a bunch of politicians.
"I think there are cultural issues. There is a culture of optimism that dominates the MoD - get something into the budget, doesn't matter if it costs more over time as long, as we have got it in."
The defence secretary responded to the report by outlining plans to tackle the financial mismanagement that saw a £36bn hole in the department's budget.
Speaking to BBC Breakfast, Dr Fox said "fantasy projects" which make their way into the defence programme have to stop, and the department's biggest projects will be regularly assessed.
Later today, the defence secretary will deliver a speech to the Civitas think-tank in London on procurement.
He is expected to outline the "dilemmas" faced by the department and the "guiding principles" of defence policy in a constrained fiscal environment.
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