Spending watchdog delivers condemning report on "risky" Army restructuring amid plans to recruit thousands more trained reservists

National Audit Office has analysed further Coalition plans to reduce the number of regular personnel from 102,000 to 82,000

The spending watchdog has released its critical assessment of governmental plans to overhaul the Army, warning that the Ministry of Defence needs a "significant change in performance."

The National Audit Office’s (NAO) delayed report has taken the MoD to task for its plans to raise the number of trained army reservists from 19,000 to 30,000, while reducing regular Army personnel by 20,000.

It said that plans to re-mould the Army come with "significant risks" that could "significantly affect the Army's ability to achieve its objectives and value for money," potentially costing the taxpayer a lot more than anticipated.

Dubbed ‘Army 2020’ by the MoD, the makeover will see the both regulars and reserves integrated for the first time, with the latter used more routinely than in just special circumstances.

The NAO’s analysis, which was due to be published yesterday but was hindered by last-minute clashes over discrepancies, said it would “examine the robustness of the Ministry of Defence’s plans to develop a smaller, more flexible Army.”

The watchdog today warned that the MoD's timeline for the project is off-track, possibly running up to six years behind schedule, amid concerns that its recruitment drive for reserves is well below par.

It said that the decision to almost double the number of trained reserves had been "taken without appropriate testing of feasbility."

Amyas Morse, head of the NAO, said: "The Department and Army must get a better understanding of significant risks to Army 2020 - notably, the extent to which it is dependent on other major programmes and the risk that the shortfall in recruitment of new reserves will up the pressure on regular units."

IT problems have plagued the project, the report said, after software supposed to help external recruiter Capita had failed to be ready in time for its March 2013 launch date. It will not be ready until summer 2015.

Margaret Hodge, chairwoman of the Commons public accounts committee, lambasted the "scandalous" increased £1million-a-month operational cost that the MoD is having to deal with in the meantime.

"The MoD went ahead with plans to reduce the number of regular soldiers and increase the number of reservists from 19,000 to 30,000 by 2019 without even investigating whether it was possible to do this by that time, or even whether it had 19,000 trained reservists to start with.

"Given this, it comes as no surprise to me that just one third of the reservists have been recruited in 2013-14 and the size of the Army Reserve has not increased since 2012.

"The MoD's recruitment contract has been plagued by unreliable data and failure by the department to provide the necessary IT infrastructure.

"Even after all this, I am astounded to find that reducing the size of the Army will not alone deliver the financial savings required for the MoD budget. Unbelievably, it may even mean increased costs to the Treasury if the reservists are deployed."

The Army’s restructuring will see the core base of regular personnel dwindle from 102,000 to 82,000 by 2018.

The findings come as its also revealed that the Major Projects Authority has issued concerns that the plan to recruit another 11,000 reservists should be considered a precarious one alongside HS2 and Universal Credit.

Additional reporting by agencies