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MoD savaged over £35bn order overrun

A report on the way the Ministry of Defence buys equipment has condemned the government department for pursuing an “unaffordable” budget that has resulted in a £35bn overrun.

The report by former Labour ministerial adviser Bernard Gray is so scathing that the MoD has only now finally agreed that it should be released after a series of substantial leaks.

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The document said of the military acquisition programme: “The problems, and the sums of money involved, have almost lost their power to shock, so endemic is the issue, and so routine the headlines. It seems as though military equipment acquisition is vying in a technological race with the delivery of civilian software systems for the title of ‘world’s most delayed technical solution’. Even British trains cannot compete.”

It warned that the system could not cope with the demands of fighting the sort of agile enemies Britain was now facing in theatres like Afghanistan.

The MoD last night rejected its central recommendation, to contract out the acquisition of equipment for the Armed Forces. Defence Secretary Bob Ainsworth acknowledged that the report had highlighted “problems” and “shortcomings” but decided against setting the Defence Equipment and Support (DE&S) organisation at arm’s length from the MoD.

“We are not convinced that such a change would ultimately lead to better outcomes for the armed forces or defence generally,” Mr Ainsworth said.

The report heightened fears that many major defence projects, like the supercarriers and the Trident renewal project, may be cut back.

Mr Gray laid bare an equipment programme that “is unaffordable on any likely projection of future budgets”.

At best, the MoD will be unable to buy up to one-third of the equipment it plans to purchase over the next decade. In the worst-case scenario, by 2020 the MoD would have about £5bn to spend and about £10bn of commitments.

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