MoD spending billions on goods it doesn’t need, says PAC

1 Mar 13
The Ministry of Defence has wasted significant amounts of public money buying more military supplies than it needs, resulting in a £4.2bn stockpile of goods, MPs have found.

By Richard Johnstone | 1 March 2013

The Ministry of Defence has wasted significant amounts of public money buying more military supplies than it needs, resulting in a £4.2bn stockpile of goods, MPs have found.

The Ministry of Defence has wasted significant amounts of public money buying more military supplies than it needs, resulting in a £4.2bn stockpile of goods, MPs have found.

In Ministry of Defence: Managing the defence inventory, the Public Accounts Committee criticised the ministry for failing to improve its purchasing practices, despite being aware of problems as long ago as 1991. The MoD remained unable to provide ‘effective accountability’ for ordering, retaining, and disposing of raw material and items such as clothing, the PAC report concluded yesterday.

Poor information systems and weak professional inventory skills also meant the department was unaware of the scale of the problem and could not manage its inventory efficiently. For example, between April 2009 and March 2011 the department purchased 38% more of materials, including clothing and ammunition, than it used, at a value of £1.5bn.

In evidence to the committee, the MoD accepted there was a need to reform its procurement practices. It highlighted new control measures being put in place to prevent over-ordering. It plans to reduce spending on inventory by £300m in 2012/13 and by £500m in the next three years. It also wants to reduce the volume of stock it holds by 35% in advance of the anticipated return of stock from Afghanistan and Germany.

However, PAC member Richard Bacon said the problem with excess stock could get worse unless the department acted now to get rid of existing supplies. It needed to act quickly as some central depots for non-explosive items were already 90% full, he added.

‘It is unacceptable that the Ministry of Defence is wasting significant amounts of public money buying equipment and supplies that it doesn’t need.

While it is perfectly understandable that the department would want to ensure troops on the front line have the equipment they need, it is simply not good enough for the MoD to blame the Treasury for not incentivising it to deal with the issue. The MoD should set targets to reduce unnecessary ordering and regularly review its progress to see where else money could be saved.’

The department is currently spending more than £1bn on a new computer system to manage its supplies. Bacon said this would be ‘only as good as the information put into it’ and there was currently a lack of detail on what has been procured.

‘Before getting its new system up and running, the department needs to perform a full cleansing and reconciliation exercise, to ensure it doesn’t waste even more public money,’ he added.

Responding to the report, defence equipment minister Philip Dunne said he was determined to reverse ‘decades of lax inventory management’ to ensure assets were managed much more efficiently in the future.

‘Considerable progress has been made since 2010 – the size and value of our holdings are now heading in the right direction and we plan to spend almost £2bn less on inventory over the next four years,’ he added.

‘Support for military operations is, and must continue to be, our first priority. Appropriate reserves of equipment are essential to be able to deploy our armed forces at short notice and sustain them on operations around the world.’

Spacer

CIPFA logo

PF Jobsite logo

Did you enjoy this article?

AddToAny

Top