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MoD budget fiddles under fire

Moving budgets not the same as saving money

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The Public Accounts Committee has accused the Ministry of Defence of a "culture of optimism" and of creative accountancy to make it look like it's saving money when often it's not.

The MoD has moved over £1bn into different projects or budget lines in the last two years. The Committee said: "Such transfers mean that the forecast costs reported to Parliament do not give the full picture of the expenditure required to bring equipment into military service."

It said the MoD, despite numerous reforms, seems unable to bring about any lasting improvements to procurement practises.

For example the Department reckons it will cost £305m to subsidise the British shipbuilding industry. But the PAC said: "The Department does not have any mechanism to check whether it is getting value for money from such payments." The Committee also criticised the five and half year delay in signing the contract for two new aircraft carriers, which shipyards are depending on, as likely to increase costs.

The Ministry was advised to "change the culture amongst its own staff and the industry from one of a 'conspiracy of optimism' to one of greater realism".

The full report is available as a pdf here. ®

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