By Vivienne Russell | 25 January 2012
MPs have criticised the repeated qualification of the Ministry of Defence’s accounts and the department’s failure to fully comply with International Financial Reporting Standards.
The Commons defence select committee is so concerned it has asked Chancellor George Osborne to outline his policy on Whitehall departments that flout accounting rules. His lack of response is ‘dismaying’, the MPs say in a report published today.
Committee chair James Arbuthnot said: ‘The repeated qualification of the MoD accounts reflects badly on the MoD’s financial management. The situation is unsatisfactory and the MoD and the Treasury need a clear plan to address the shortcomings in the MoD’s accounting systems.’
Responding, an MoD spokeswoman said IFRS had been in place at the department since 2009/10.
‘Within the timescales of the 2010/11 accounts, it was not possible to review all current single source contracts. In all other respects, the accounts are compliant with IFRS,’ she said.
The select committee report also draws attention to the ‘grotesque’ disparity between compulsory redundancies for different personnel – amounting to 40% of military staff but none of the civilian employees, who will all be leaving voluntarily.
Arbuthnot said: ‘The stark and shocking differences between redundancies in the MoD require an exceptionally persuasive explanations, which we are yet to hear.
‘Look at the areas where the armed forces are undermanned. Why cannot the MoD retrain service personnel, who face redundancy, to fill those many trades where there are shortages, such as combat medical technicians or intelligence gatherers?’
Defence Secretary Philip Hammond said: ‘The select committee’s report is simply wrong in what it says on military redundancies. Every opportunity is being given for military personnel to retrain either for alternative roles in the armed forces or in civilian life, but the simple fact is we have to tackle the massive deficit we inherited from Labour and the huge black hole in the defence budget.The 2010 Strategic Defence Review said the armed forces needed to shed 17,000 posts by 2015. The latest round of military redundancies were announced last week.
