THE Ministry of Defence has been urged by Westminster's spending watchdog to get a grip on the "ongoing fiasco" of the Royal Navy's aircraft carrier programme after it emerged that another £74million of taxpayers' money has been lost on the project.
Last May, Defence Secretary Philip Hammond performed a U-turn and decided to revert to the plans of the former Labour government and acquire the jump jet version of the US-built Joint Strike Fighter as part of the carrier programme.
The two warships, HMS Queen Elizabeth and HMS Prince of Wales, are being built on the Clyde.
In its original defence review, the Coalition had intended to switch to a variant design, but Mr Hammond discovered the costs of fitting the necessary catapults and arrester gear – so-called "cats and traps" – had more than doubled to £2 billion.
In a report to the Commons Public Accounts Committee, the National Audit Office (NAO) said that, although the MoD had acted quickly once it had realised the problems with switching, the decision made in the defence review was based on "immature data and flawed assumptions". The subsequent work cost about £74m.
The NAO warned successful delivery of the scheme would now require the MoD to "manage significant affordability and technical risks".
Labour's Margaret Hodge, who chairs the committee, said the Coalition's U-turn was the result of "wildly over-optimistic assumptions" made in the defence review and called for the MoD to "get a grip on this ongoing fiasco".
She said: "The saga of the terrible waste of public money on the Carrier Strike project continues. This report shows that a further £74m at least has been thrown away on top of the billions of pounds of notes already torn up."
She explained that when the programme was approved in 2007, two aircraft carriers, available from 2016 and 2018, were ordered at a cost to the taxpayer of £3.65bn.
Ms Hodge said: "We are now on course to spend £5.5bn, get one operational carrier and have no aircraft carrier capability for nearly a decade.
"We are also now looking at a further delay of another two years because the Ministry has decided to postpone the early-warning system that is a key part of the carrier programme. This means the UK will have no Carrier Strike operating capability until 2022."
According to the MoD, the 2012 decision to switch back to jump jets will be £1.2bn cheaper than the cat-and-trap variant over the next decade.
The NAO found that between 2005 and 2012 there was a 55% increase in the MoD's procurement estimate for the two aircraft carriers while the cost of each aircraft had gone up by 100% from 2001 to 2012.
Amyas Morse, head of the NAO, said: "It is good that the MoD acted promptly once it became clear that pursuing the option to buy the carrier variant aircraft would cost a lot more money and add another three years to the whole programme.
"But to achieve value for money in this project, the department will have to manage significant technical and affordability risks and be consistent in sticking to the present plan."
Jim Murphy, the Shadow Defence Secretary, said the report had laid bare the UK Government's incompetence.
He said: "Flawed ministerial decisions have wasted millions of pounds of taxpayers' money at a time of mass service sackings and cuts to pensions and allowances."
Mr Murphy said that, despite ministerial claims, part of the carrier capability was still unfunded and "risk remains in the programme".
He added: "There must now be changes to risk assessment and decision-making processes within the department and real lessons learnt for future major project procurements."
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