The UK Parliament’s Public Accounts Committee says the Ministry of Defence has left the taxpayer to shoulder huge cost increases due to the MoD’s poor contract management.
In a report published today, the Committee say that the MoD was unable to explain why it has repeated past mistakes – many of which have been repeatedly commented on by the National Audit Office and Public Accounts Committee for more than 30 years – and has failed to learn lessons from comparable projects in the civil nuclear sector and in the United States.
“The MoD accepted that it must not operate in the same way in the future”, said the report.
According to the PAC, the Committee heard evidence on three of the most significant projects under construction:
- the AWE plc project MENSA at Burghfield (forecast cost £1.8 billion, completion 2023), where the Department is building a new nuclear warhead assembly and disassembly facility
- the Rolls Royce owned and operated Core Production Capability facilities at Raynesway (forecast cost £474 million, completion 2026), where the Department is replacing facilities so it can produce the latest nuclear reactor core designs
- the BAE Systems-owned Barrow shipyard facility (forecast cost £240 million, completion 2022) to allow modular build of Dreadnought-class submarines
Meg Hillier MP, Chair of the Public Accounts Committee, said:
“To utterly fail to learn from mistakes over decades, to spectacularly repeat the same mistakes at huge cost to the taxpayer – and at huge cost to confidence in our defence capabilities – is completely unacceptable. We see too often these same mistakes repeated.The Department knows it can’t go on like this, it knows it must change and operate differently. The test now is to see how it will do that, and soon.
We expect the MoD to report to us later this year, in its 2020 update on the Dreadnought nuclear submarine programme, on how it is working with industry and other departments to develop and keep in place the skills it badly needs to take forward nuclear work. We also expect a detailed assessment, of whether the current ownership arrangements for nuclear regulated sites are in the best interests of the taxpayer, to be provided to us by the end of this year.”
The MoD said it “immensely regretted” the huge waste of taxpayers’ money, which was caused by poor management of three nuclear infrastructure projects, resulting in a combined cost increase of £1.35 billion with delays of up to 6 years.