Ministry of Defence officials were accused of "mismanagement on a grand scale" by a powerful cross-party Commons committee yesterday.
In one of the hardest-hitting reports to have emerged from the Public Accounts Committee in recent years, the MoD was hauled over the coals for the re-building of the submarine base at Faslane on the Firth of Clyde.
Budgeted for pounds 1.1bn when the Government decided to introduce Trident nuclear submarines in 1980, re-equipping and expanding Faslane finally cost pounds 1.9bn. The pounds 800m over-run of the "Trident Works" programme caused the MPs "grave concern". They said they did not regard explanations from the MoD as an adequate excuse for what had occurred.
Refurbishing Faslane to take the massive Trident submarines was a huge project, second only to the Channel tunnel in size. Plans for the base changed radically after the Chernobyl disaster. Officials worried about the impact of an earthquake on the west coast of Scotland. These sudden changes, said MPs, put the MoD in a very weak negotiating position with contractors.
The department used a form of contract rarely adopted in large public- sector programmes, where the building work was allowed to begin before a final design brief had been agreed. On the submarine lift alone, there were 7,200 alterations to the plans. At its peak, 1,000 consultants from 67 firms were working on the project, often on open-ended contracts. Consultancy fees were 194 per cent over budget, at pounds 360m. MPs said they "considered it most unsatisfactory that such costs were not controlled more tightly and looked to the department to ensure that such open-ended consultancy arrangements are not used on future programmes."
Overall, said the committee, they were "most concerned that financial control over Trident Works was so weak."
The MoD said that the work was started in a great hurry - with building beginning before designs were complete and this haste was unwise; risks were under-estimated and risk management was poor. At first, the local district and regional planning authorities did not co-operate. None of these factors, said the committee, could be an adequate excuse for the pounds 800m overspend.
Key lessons, warned the committee, had to be learnt. In future, officials should have "a clear and early perspective of the overall scale and content" of the project. They should establish an integrated management structure with clear lines of communication. The programme should be realistic and based on complete designs. The use of consultants should be tightly controlled.
Alan Milburn MP, a member of the committee, condemned Faslane as a fiasco. "Public money was being thrown around like confetti at a wedding," he said.
David Clark, Labour's defence spokesman, also condemned the Ministry of Defence. "This latest catalogue of disasters quite simply beggars belief," he said. Dr Clark said the ministry, headed by Michael Portillo as from yesterday, "was a sanctuary for incompetence, mismanagement and lack of commercial control".Reuse content