New RAF drones will cost the taxpayer an extra £300 million because of delays by the MoD, a report by the public accounts committee (PAC) on military waste has found.
Parliament’s spending watchdog said “broken” systems for purchasing military kit by the MoD meant billions of pounds were being wasted by officials who “continually fail to learn” from their mistakes.
In a report published on Wednesday, MPs on the PAC criticised military chiefs and officials over their handling of taxpayers’ money and a tendency to “throw good money after bad”.
The report highlighted the programme to buy the RAF’s next generation drone, called Protector, of which the MoD has committed to buying 16 with a possible purchase of a further 10. They are equipped with day and night cameras and are capable of carrying missiles and bombs.
The MoD deferred parts of the programme due to “affordability pressures”, although this had increased the overall cost of the drones and is expected to cost the taxpayer £326 million.
The ministry’s permanent secretary told the committee the continuing practice of incurring higher costs overall in order to reduce expenditure in the short term was “sub-optimal”.
The report also highlighted the early rise in costs of nine out of 12 major programmes – three by more than 50 per cent. The MPs said they were “not assured” that the MoD would not “simply throw good money after bad”.
The committee warned that failures to get a grip on procurement means the extra £16.5 billion announced for the department last year to boost Britain’s military could instead go on plugging gaps in the defence budget rather than delivering new equipment.
The Government has refused to say how big the MoD’s 10-year spending “black hole” is, but estimates are around £10 billion.
The report accused MoD staff of blocking attempts to uncover why equipment programmes go over budget or run years late.
Dame Meg Hillier, the chairman of the committee, said the watchdog was “deeply concerned about departmental witnesses’ inability or unwillingness to answer basic questions and give a frank assessment of the state of its major programmes”.
“MoD senior management appears to have made the calculation that, at the cost of a few uncomfortable hours in front of a select committee, they can get away with leaving one of the largest financial holes in any government department’s budget, not just for now, but year after year,” she said.
The Labour MP added that despite the “years” of inquiries into the issues and “promises of learning and change”, nothing had improved at the MoD.
The report cited “catastrophes” such as the £5.5 billion Ajax armoured vehicle as an example of failings. Almost 600 Ajax vehicles were ordered from contractor General Dynamics in 2014, with the vehicles due to be in service by this summer. So far, only a handful have been delivered.
Testing of the vehicles was halted after it emerged that troops were suffering hearing loss and injuries because of vibration. Further concerns have been raised that the Ajax’s hull cracks when its main gun is fired and that it is unable to reverse over even small obstacles.
‘Absolute clarity’ needed on what extra £16.5bn will deliver
MPs attacked the MoD’s “refusal” in a committee hearing to explain the “magnitude of its financial exposure in the event of [Ajax’s] contract termination” which they said showed its “disregard for Parliament and taxpayers”.
A series of recommendations were set out in the report, including the Treasury and Cabinet officer reviewing how the MoD works, more detailed and transparent information about value for money of contracts, and a formal plan on how to learn from past mistakes to avoid them in the future.
The watchdog also said it wanted contractors to share more of the risks from projects instead of putting them on the MoD and taxpayer, recruiting better skilled staff and keeping those in charge of programmes in place for longer.
The PAC said it wanted “absolute clarity” on what new military capabilities the extra £16.5bn will deliver, while Dame Meg added that this would end the cycle of officials believing that additional funding is the only solution to their problems.