U.K. Has No Idea Where Defense-Kit Savings Come From, Panel Says

The Ministry of Defense underspent on military equipment by 1.2 billion pounds ($2 billion) in the fiscal year ended 2013, and yet has no idea whether that was due to genuine cost savings or whether program delays will lead to increased charges in later years, a panel of lawmakers said.

In a report published today, the cross-party Public Accounts Committee identified “big uncertainties” in how the MoD handles its large-scale equipment programs. It said that underspending leaves the department vulnerable to the U.K. Treasury clawing back cash to be spent elsewhere.

“We are concerned that, despite improvements, cost control of some individual projects remains poor,” the panel said. “The ministry needs to get a grip on understanding costs and risks across the piece.”

In a statement, the MoD said the committee recognized that spending at the department had been brought under control.

“By balancing the budget for the first time in a generation, we are now able to prudently protect our underspend thanks to an exceptional agreement with the Treasury, so we are ready to fund future priority projects and ensure our Armed Forces get the equipment they need at the best value for the taxpayer,” said Philip Dunne, a defense minister responsible for procurement.

In a separate report today, Parliament’s Defence Committee said almost 100 million pounds has been spent bringing back equipment from Afghanistan as Britain prepares to end combat operations in the country by year-end. The U.K. government says kit may be at risk from criminals or terrorists if it were brought back overland.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE