Ministry of Defence: The Major Projects Report 2011, Sixty-Eighth Report of Session 2010-12, Report, Together with Formal Minutes, Oral and Written Evidence - House of Commons Papers (Paperback)Great Britain: Parliament: House of Commons: Committee of Public Accounts (author), Margaret Hodge (other)
Paperback Published: 10/02/2012
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The Ministry of Defence (the Department) continues to struggle with managing its equipment programme on an affordable basis, resulting in the cancellation or deferral of major projects and a damaging impact on value for money. In 2010-11 the forecast costs to complete the 15 largest defence projects increased by GBP466 million. Since their original approvals the estimated costs of these 15 projects have increased by GBP6.1 billion and now stand at approximately GBP60 billion (an 11.4% increase). In aggregate these 15 projects are forecast to be completed 322 months later than originally planned. Projects approved since 2002 show significantly lower cost growth than those approved before this date, which is encouraging. Now the Department faces unpalatable decisions. Decisions to cancel or slow projects and to reduce equipment numbers have added significant long-term costs to the whole defence programme and to unit costs within the programme. Capability has been affected and this has all resulted in poor value for money. Large defence equipment projects have contributed disproportionately to overall cost growth. In the past, the Department has repeatedly failed to challenge unrealistically low estimates for the largest and most complex equipment projects from suppliers. The Department is still unable to set out openly the extent of the gap between income and expenditure it still faces, and how and by when any shortfall will be resolved. The report notes little progress in reducing the turnover of the Senior Responsible Owners (SROs), who oversee individual projects.
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