Feeds

Costs go sky high at MoD

£2.6bn budget blowout

Secure remote control for conventional and virtual desktops

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.

Secure remote control for conventional and virtual desktops

More from The Register

next story
GCHQ protesters stick it to British spooks ... by drinking urine
Activists told NOT to snap pics of staff at the concrete doughnut
Britain's housing crisis: What are we going to do about it?
Rent control: Better than bombs at destroying housing
What do you mean, I have to POST a PHYSICAL CHEQUE to get my gun licence?
Stop bitching about firearms fees - we need computerisation
Top beak: UK privacy law may be reconsidered because of social media
Rise of Twitter etc creates 'enormous challenges'
Redmond resists order to hand over overseas email
Court wanted peek as related to US investigation
Ex US cybersecurity czar guilty in child sex abuse website case
Health and Human Services IT security chief headed online to share vile images
NZ Justice Minister scalped as hacker leaks emails
Grab your popcorn: Subterfuge and slur disrupts election run up
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
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.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.