In the past year alone, the Type 45 destroyer program has slipped by 7 months while its cost has grown by £157 million, NAO said.
(BAE Systems photo)
Major Projects Report 2006
(Source: UK National Audit Office; issued Nov. 23, 2006)
The National Audit Office’s annual report on 20 of the top defence equipment projects shows the Ministry of Defence has responded to recommendations made by the National Audit Office and the Committee of Public Accounts, on controlling increases in forecast expenditure and living within its means.
Faced with the possibility of rising costs in 2005-06, the MoD launched an internal review to halt these and find reductions across its procurement activities. This review identified potential savings of £781 million by buying fewer of particular items, re-assessing military requirements and reviewing existing contracts and commercial arrangements.
Fifty seven per cent of the cost reductions were generated by reallocating costs to different budgets. The rationale behind this change – to attribute more appropriately costs to budget holders who are better placed to manage them - is sensible. But as these costs are being transferred into another MoD budget, they are of no net financial benefit to the Department.
Some of the delays and cost reductions, particularly those made by buying less, as in Guided Multiple Launch Rocket System, may result in a gap in capability or a delay in introducing enhanced capability. The Department recognises the risk and plans exist to mitigate any potential impact.
In 2005-06, twelve projects have progressed to schedule and two were ahead of last year’s schedule. Delays across five projects contributed to the total in-year delay of 33 months. This is an average of 1.7 months per project this year, less than the average of 2.4 months in last year’s Major Projects Report. Beyond Visual Range Air-to-Air Missile is expected to be delayed by 12 months. The Next Generation Light Anti-Armour Weapon has been delayed by 8 months but is still expected to enter service within the timescale set when the project was approved. The delays were caused by technical problems.
The National Audit Office has also confirmed it is working with the MoD to change how it reports on the top defence equipment projects in the future. Increasing emphasis on the management of defence capability through life for projects mean it is necessary for the Major Projects Report to evolve to continue giving the most complete details on the performance, cost and timeliness of defence equipment projects. Proposals for a new look MPR are being developed with the intention of introducing the new report in 2008.
Sir John Bourn, head of the NAO, said today:
“The Ministry of Defence has recognised the concerns expressed by the Committee of Public Accounts and ourselves about the need to tighten its control of costs. A sensible step to achieving this has been to reallocate some costs to budget holders who can manage them more effectively."
“The way in which MoD conducts its acquisition business is evolving. To provide more public information to Parliament we are working with the MoD to make sure that the Major Projects Report evolves in parallel to ensure it provides a more complete account of the progress of defence equipment projects.”
The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office which employs some 850 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.
Click below for the report and its highly detailed programme summary sheets:
Full Report (34 pages in PDF format)
http://www.nao.org.uk/publications/nao_ ... 60723i.pdf
Programme Summary Sheets (178 pages in PDF format)
http://www.nao.org.uk/publications/nao_ ... 0723ii.pdf
-ends-
FONTE
![8-]](./images/smilies/icon_cool.gif "Cool"){kind=icon}
