Feeds

Costs go sky high at MoD

£2.6bn budget blowout

5 things you didn’t know about cloud backup

Skynet 5 and other military equipment projects are running a total of £2.6bn over budget, a report from the official spending watchdog reveals.

Restructuring of Skynet 5, the Ministry of Defence PFI project to develop the next generation of military satellite communication services, will cost an extra £885m, says the National Audit Office's (NAO) latest report.

The original deal for Skynet was signed with contractor Paradigm in 2003 with a forecast cost of £2.77bn. But problems with insurance led the ministry to restructure the deal two years later. The length of the project has been extended and, as a result, costs are now forecast at £3.66bn.

The NAO's Major Projects Report 2006, published on 24 November 2006, reveals that the cost of the 20 biggest military equipment projects is now £2.6bn higher than agreed at the outset. Thirty-three months of delay to these projects occurred in the year 2005-06, but the NAO points out that this is a better performance than in any of its major projects reports since 2002.

Edward Leigh, chair of Parliament's Public Accounts Committee, commented: "When news of an additional 33 month delay in the delivery of big defence projects is called a step in the right direction, that tells us plenty about the MoD's track record in managing those projects."

Although the Ministry of Defence appears to be making progress in controlling costs, the reality is that it has done this largely by juggling costs between budgets, said Leigh.

The ministry has recognised the concerns expressed by the committee and the NAO about the need for better cost control and is making changes to its purchasing procedures, according to NAO head Sir John Bourn. These changes include better management of commercial and contractual arrangements and more cost effective means of delivery.

"To provide more public information to Parliament we are working with the MoD to make sure that the major projects report evolves in parallel to ensure it provides a more complete account of the progress of defence equipment projects," Bourn added.

This article was originally published at Kablenet.

Kablenet's GC weekly is a free email newsletter covering the latest news and analysis of public sector technology. To register click here.

Build a business case: developing custom apps

More from The Register

next story
The police are WRONG: Watching YouTube videos is NOT illegal
And our man Corfield is pretty bloody cross about it
China hopes home-grown OS will oust Microsoft
Doesn't much like Apple or Google, either
UK government accused of hiding TRUTH about Universal Credit fiasco
'Reset rating keeps secrets on one-dole-to-rule-them-all plan', say MPs
Fast And Furious 6 cammer thrown in slammer for nearly three years
Man jailed for dodgy cinema recording of Hollywood movie
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
Don't even THINK about copyright violation, says Indian state
Pre-emptive arrest for pirates in Karnataka
Yes, but what are your plans if a DRAGON attacks?
Local UK gov outs most ridiculous FoI requests...
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?