Brown 'buried' report showing £2.5bn wasted on defence

PM accused of hushing up document showing the cost of MoD's poor decisions

The Prime Minister has been accused of hushing up an internal report claiming his government is wasting as much as £2.5bn a year in defence spending.

The report by Bernard Gray, a former Ministry of Defence aide, is thought to accuse the Government of squandering the money by making a number of incompetent procurement decisions. Ministers refused to release the 300-page report last night, which they said was only a draft version.

It had been due to be published last month. However, at the last Prime Minister's Questions, Gordon Brown announced that it would now not appear until after the recess.

According to an investigation by Channel 4 News, the review states that the Government can only afford two-thirds of the defence equipment it has ordered. Huge costs have been incurred when some major projects, such as new aircraft carriers, were delayed. Workers still had to be paid while the work was on hold.

Major reforms of how the MoD budget is managed are said to have been recommended by Mr Gray, including the adoption of a fixed budget so the department can plan ahead. The privatisation of Defence Equipment & Support, which handles procurement, is also suggested.

Liam Fox, the shadow Defence Secretary, said Mr Gray's review should be published in full immediately.

"This is a damning indictment of 12 years of incompetence," he said. "By trying to suppress this report, the Prime Minister has demonstrated that he cares more about the reputation of Labour than he does about the wellbeing of the Armed Forces. The Government has a moral duty to ensure that our Armed Forces have the equipment they need for the war-fighting they are asked to do; instead we have a catalogue of bureaucracy, incompetence and time wasting.

"Gordon Brown, as Chancellor, was never willing to fund Tony Blair's wars; now that he is Prime Minister, he is trying to cover up his mistakes. We also need as full a disclosure of MoD finances as possible, as the next government is already facing a massive shortfall. Labour must not be allowed to operate a scorched earth policy on defence," Mr Fox continued.

Responding to the accusation that about £2.5bn was being wasted, Kevan Jones, a Defence minister, said he "did not recognise" the figure.

Mr Jones added that Mr Gray's report would now form part of a broader review of defence spending and procurement to be announced by the Science minister, Lord Drayson, later this year.