The 16 largest projects for the Ministry of Defence have overrun by a combined total 39 years and cost of £6.6 billion more than the original contract.
The contracts for military jets, submarines and advanced missiles have cost 12% more than what was approved, rising from £56.5bn to £63.1bn.
The 16 contracts increased by £468m in the last 12 months. An extra 11 years worth of delays were added during this period.
With the Ministry of Defence facing a difficult task striking a balance between delivering the capabilities it wants and those it can afford, Amyas Morse, head of the National Audit Office, said that the MoD “must do more to learn from previous projects.”
“If it is to make the most of the money available, the Department has more to do to address its longstanding issues on project performance,” he said.
There were manufacturing, testing and order issues with two-thirds of projects. Further delays on the Queen Elizabeth aircraft carrier built and designed by BAE Systems, Thales and Babcock added £217m to the projected cost of the project in 2012.
The Major Projects Report stated that the increased cost “is due to the MoD and industry having greater understanding of the costs and not being able to fully deliver agreed cost reduction opportunities.”
Project delays reflect a range of technical problems, such as software development, which has created turbulence and uncertainty for the UK’s equipment plan for the military, reducing the MoD’s ability to plan and manage a shrinking defence budget.
The UK has had to cut equipment numbers to bridge the gap between estimated funding and the forecast cost of the defence budget, such as cutting the number of the A400M military transport aircraft from 25 to 22.
Manufactured by Airbus Military, the MoD has had to reduce the size of its order after costs spiralled by £770m, with continued delays preventing the planes being delivered in February 2008, as scheduled. Airbus Military now expect the aircraft to be available to the MoD by March 2015.
The planes to be used in Afghanistan, allowing operations from rough landing areas in extreme climates. David Cameron has since announced that all soldiers will be withdrawn from Afghanistan by the end of 2014.
The delay of vital equipment for Afghanistan forced the MoD to spend billions of pound upgrading existing equipment. The UK spent £787m extending the life of existing aircraft and purchasing four extra planes to transport troops as a result of the A400M aircraft not being delivered on time.
The MoD also approved an additional £946m upgrade on helicopters, including new engines for 22 Lynx helicopters, to allow them to operate year-round in Afghanistan because new equipment wasn’t available.
The Major Projects Report branded the 16 largest orders “not value for money.”
