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PAC

PAC – THE COST-EFFECTIVE DELIVERY OF AN ARMOURED VEHICLE CAPABILITY

09 Dec 11. The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said: “Armoured vehicles play an essential role in a wide range of military operations, especially in Iraq and Afghanistan. So we are extremely concerned that, despite spending £1.1 billion of taxpayers’ money since 1998, the Department has failed to deliver any vehicles from its core procurement programme.

“The reason for this extraordinary failure is all too clear. Seeking to balance its overall defence budget, the MOD raided the armoured vehicles chest and removed £10.8 billion from budgets up to 2021.

“Matters were made worse by an overly complex procurement process and an unrealistic culture of always demanding cutting edge technology. The MOD was simply not able to afford what it was asking for.

“Faced with a gap in armoured vehicle capability, the Department was forced to ask for an additional £2.8 billion from the Treasury to buy extra vehicles under the so-called Urgent Operational Requirements process. While designed for the specific tasks in hand and delivered rapidly, these vehicles are expensive and are not the flexible and adaptable military equipment that our armed forces need in the long term.

“The MOD seems as far away as ever from establishing a clear set of affordable defence priorities. The problem for the armoured vehicle programme is that the Department has yet to say how it is going to find the money to buy the vehicles it needs in future to carry out the full range of military tasks.

“It was no surprise to the Committee that the Accounting Officer of the Department could not name who was responsible for this serious failure of procurement or whether anyone had paid the penalty.”

Margaret Hodge was speaking as the Committee published its 59th Report of this Session which, on the basis of evidence from the Ministry of Defence (the Department), examined its progress in delivering armoured vehicles.

Armoured vehicles such as tanks, reconnaissance and personnel-carrying vehicles are essential for a wide range of military tasks. Since the 1998 Strategic Defence Review, the Department has attempted to acquire the vehicles it needs through a number of procurement projects. However, none of the principal armoured vehicles it requires have yet been delivered, despite the Department spending £1.1 billion since 1998, including £321 million wasted on cancelled or suspended projects. As a result there will be gaps in capability until at least 2025, making it more difficult to undertake essential tasks such as battlefield reconnaissance.

Partly as a result of this £1.1 billion failure to yet deliver any armoured vehicles, and to meet the specific military demands of operating in Iraq and Afghanistan, the Department was provided with a further £2.8 billion from the Treasury Reserve to buy Urgent Operational Requirements (UOR) vehicles. The Department has used the faster UOR process to deliver mine-resistant vehicles for operations. However, these vehicles are expensive and are designed for specific circumstances, so will not meet the wider requirements identified in the recent Strategic Defence and Security Review (SDSR). Delays to the delivery of the principal armoured vehicles have meant that other equipment, such as helicopters and other vehicles, have been used more frequently to undertake tasks such as battlefield reconnaissance and transporting personnel. Using helicopters and other vehicles in this way can be less effective and may divert expensive military assets from other essential tasks.

Over the past six years, the Department has removed £10.8 billion from armoured vehicle budgets up to 2021. Armoured vehicles projects have suffered more severe budget cuts than other equipment projects, largely because they involve lower levels of contractual commitment and are therefore easier to cut. This has left £5.5 billion availabl

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