25 July 2008
MPs have accused the Ministry of Defence of moving large sums from one budget to another to camouflage overspends in major procurement projects.
The Public Accounts Committee, in a report published on July 22, charged MoD staff with a 'conspiracy of optimism', which led to unrealistically low estimates for bringing major equipment into service. According to the Major projects report 2007, the MoD reallocated £609m in 2007 — making a total of more than £1bn reallocated over the past two years.
The report said the department must address the 'systemic weaknesses' underlying cost increases and time delays.
PAC chair Edward Leigh said: 'The MoD is trying to persuade Parliament that the forecast costs of major defence equipment projects are under control by moving expenditure from those projects to other defence budgets. This is not acceptable.'
The current estimate for the combined cost of the MoD's 19 largest military equipment projects — excluding the Eurofighter Typhoon, whose costs are not published for commercial reasons — is £28bn, the MoD says.
The report said that this was an increase of more than 10% compared with the 'most likely' cost given when the procurement decisions were announced.
PFjul2008
