By Richard Johnstone | 10 May 2013
The Ministry of Defence moved quickly to cancel an order for fighter aircraft when costs soared but the change still cost taxpayers £74m, auditors said today.
The MoD was going to buy a variant of the Joint Strike Fighter that would have required catapults and arrestor gear to be fitted to aircraft carriers to accommodate the planes taking off and landing.
But in early 2012 the cost of the additional equipment was revealed to be £1.2bn more than originally thought. The department quickly stopped the procurement and decided instead to purchase a Short Take-Off and Vertical Landing version, which would not need changes to the aircraft carriers and would cost £600m less over 30 years.
The National Audit Office report, Carrier Strike: the 2012 reversion decision, said the change was made promptly after the MoD had realised the original decision to order the carrier variant had been based on flawed assumptions.
The department expected to write off £74m as a result, but this cost could have been ten times higher if the decision had been delayed, the auditors said.
However, they added that there must now be consistent decision making from the MoD – something that had not always been apparent in the past – if the Carrier Strike programme were to deliver value for money.
Successful delivery of the programme, which also includes new aircraft carriers and radar systems, required the MoD to manage ‘significant affordability and technical risks’, the NAO said. The highest risk phases of carrier construction and integration were yet to come, and complicated negotiations with commercial partners had yet to be concluded.
Auditor general Amyas Morse said it was good that the MoD acted promptly once it became clear that pursuing the option to buy the carrier variant aircraft would cost a lot more money.
He added: ‘But to achieve value for money in this project, the department will have to manage significant technical and affordability risks and be consistent in sticking to the present plan.’
Responding to the report, Defence Secretary Philip Hammond said the NAO had supported the switch. ‘The decision to act quickly, once more information was available, is evidence of the department’s decisive efforts to keep our equipment budget in balance while delivering state-of-the-art capability for our armed forces,’ he added.
