Feeds

Costs go sky high at MoD

£2.6bn budget blowout

Website security in corporate America

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.

Internet Security Threat Report 2014

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
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?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.