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By Julian Nettlefold, Editor, BATTLESPACE

29 Nov 07. In its annual review of major defence equipment projects, published
today, the National Audit Office has recognised the actions taken by
the MoD to limit in-year cost increases and minimise delays.

The MoD held a Press Conference today where Baroness Ann Taylor of Bolton, Minister Defence Equipment and Support, General Sir Kevin O’Donoghue KCB, CBE, Chief of Defence Materiel, Mr David Gould CB, Chief Operating Officer – Defence Equipment & Support and Lieutenant General Andrew Figgures CBE, Deputy Chief of Defence Staff (Equipment Capability) were present on the Panel.

David Gould gave the Presentation which covered the progress of 350 Projects worth £65bn. he confirmed that since April 2006 160 UORs had been placed, 60 since March 2007 and 20 since October 2007. Projects highlighted included the Desert Hawk UAV, Tornado Litening Pod fit and the Sea King BURP blade upgrade which enabled this aircraft to fly hot and high in Afghanistan and the Mastiff vehicle. UORs would now be vetted by the Treasury and supported only when these systems were in theatre. When returning from theatre their costs would be met from the existing Budget.

In response to the report Baroness Taylor, Minister for Defence
Equipment and Support said: “The size and complexity of these equipment programmes with their huge challenges in delivery and technology must not be
underestimated. The National Audit Office recognises that we are
moving in the right direction to keep costs down and minimise delays.
But there is more to be done. We are putting the changes in place to
improve the delivery of our equipment programmes to our Armed Forces.

“Today’s report covers progress on our top 20 projects – but we are
also managing some 350 other projects at various stages of concept,
assessment, development and manufacture valued at more than £65
Billion. Our teams are also engaged, with industry, on the crucially
important task of delivering key urgent operational requirements to
Afghanistan and Iraq to counter emerging threats. Some 160 separate
Urgent Operational Requirements have been successfully delivered
since April 2006.”

Thirteen of the top 20 projects have forecast a fall in costs and ten
report either no delay or a cut in the forecast in service date. The MoD continues to take hard decisions about trading cost, time and performance to keep within the limits of budgets and minimise delays, in line with the Committee of Public Accounts recommendations.

Thirteen Projects have seen a fall in costs whilst five Projects have increased costs by £43m out of £29bn total, Type 45, Astute, LAW and Terrier. David Gould said that he could not comment on A-400M as the Project was not covered in this context. However he said that the challenges to develop the largest three-core gas turbine engine were considerable with the propeller diameter being larger than some helicopters. He expected a delay of 12 months to the French Requirement but did not know whether the Programme would be able to make up this time for the later RAF requirement. Richard Norton-Taylor asked whether the requirement to put FRES into the C-130J had been shelved. David Gould confirmed that FRES would go into A-400M as it could carry 36 tonnes. But this poses another question, is it costs effective to carry one FRES vehicle per aircraft or is Maritime Pre-Positioning going to come back into focus?

When asked about the requirement to shift £1bn from the current year and the £603m transferred as mentioned in the NAO Report David Gould confirmed, with Panel support, that these savings had been achieved within existing Programmes either by cutting numbers and stretching Programmes and by streamlining the supply chain and manufacturing processes, particularly in shipbuilding. Andrew Figgures was particularly complementary about the Lockheed Martin GMLRS procurement

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