MoD under fire for spending on luxury offices

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Westminster Correspondent

The Ministry of Defence was lambasted by an influential committee of MPs yesterday for allowing delays - costing the taxpayer up to pounds 2m a week - to a prestige building project.

Labour was quick to link the criticism from the Commons Public Accounts Committee, to the departure of the MoD's head of defence procurement, Dr Malcom McIntosh. His job, paying between pounds 90,000 and pounds 125,000 a year, was advertised at the weekend.

MoD officials strenuously denied Dr McIntosh's leaving had anything to do with the committee report, which followed an earlier study from the National Audit Office, the public finance watchdog, and was the latest in a series of attacks by the committee and the NAO on overspending and delays to defence contracts.

In yesterday's report, the focus was on Abbey Wood, the new pounds 248m headquarters for Dr McIntosh's procurement executive, at Bristol. The committee said it was "concerned that the Abbey Wood project is significantly behind schedule." Each week of delay is estimated to cost the taxpayer pounds 2m.

The sheer scale of Abbey Wood has raised eyebrows at Westminster, not least because it is intended as the base for the civil servants charged with obtaining the best deal for the taxpayer on defence orders.

Extending to 98 acres, the complex, which is to house 5,700 procurement officials, embraces an ornamental lake, 5,000 trees, 28,000 shrubs, 230 bathrooms, 26 lifts; a specially constructed railway station, a 100-pupil nursery, an Italian suspension bridge and covered walkways.

Critics point out that while the design can be justified because the project is intended to save pounds 100m a year by bringing together civil servants from all over Britain on one site, none of the luxury was necessary. Even more money could have been saved, they maintain, if the project had not been so extravagant.

The PAC said it was "most unsatisfactory that some of the Department's investment appraisals had weaknesses which might have made a material difference to the results".

MPs were particularly concerned that contractors had said they could have submitted lower bids if the MoD had allowed them more time. That, plus the fact that "in [the contractors'] view, the department were unwilling to consider alternative solutions

Dr McIntosh has been chief of defence procurement since 1991. Before joining the MoD he was Secretary of Australia's Department of Industry, Technology and Commerce.

Appointed on a five-year contract, much of his time has been spent answering criticism of expenditure on major defence projects. These included the Eurofighter programme and the new nuclear submarine dry dock and missile facility at Faslane on the Clyde.

He is understood to be returning to Australia to become chairman of the Commonwealth Scientific and Industrial Research Organisation.

An MoD spokesman denied that Dr McIntosh's departure had anything to do with overspending: "He has been here for five years and is moving on to pastures new."