UK taxpayers spend £195m on fees for aircraft carrier project

The controversial project to build two Royal Navy aircraft carriers has cost the taxpayer £195m before a single formal contact has been signed with the private sector.

The controversial project to build two Royal Navy aircraft carriers has cost the taxpayer £195m before a single formal contact has been signed with the private sector.

The project is supposed to be an example of so-called "smart procurement" by the Ministry of Defence, putting an end to cost overruns and delays.

But the £3bn scheme has become one of the Government's most contentious defence programmes, dogged by delays, design changes and infighting between the companies involved - which is thought to have contributed to the costs.

Details of the amount of money spent on the project were revealed by the MoD's Defence Procurement Agency, in response to a Freedom of Information request lodged by The Independent on Sunday.

The £195m was spent on hiring consultants, paying fees to the various companies expected to build the ships, and holding conferences and events associated with the project.

However, the figure has raised eyebrows in the defence industry because the MoD is still months away from signing the formal contracts with BAE Systems, Thales, VT Group, Babcock International and Swan Hunter, which will build the vessels. This process, known as "reaching main gate", is now expected late this autumn.

By contrast, the £13bn Private Finance Initiative project to supply the Royal Air Force with a fleet of air-to-air refuelling planes, which was signed last Monday, has so far cost the tax- payer just £26.25m, according to a separate Freedom of Information disclosure.

A spokesman for the MoD pointed out that one reason for the disparity in costs was that the aircraft carriers had to be designed from scratch, whereas the air tankers were based on the existing Airbus A-330.

Despite this, concern is growing within the industry that the cost of building the aircraft carriers could spiral. The MoD had originally said it would spend under £3bn; that figure has now risen to around £3.3bn.

One insider said: "If we build what the Royal Navy wants then we are looking at £5bn. Someone has got to step up and say 'forget about the fancy over-the-horizon radar and go for the basic ship'."

Meanwhile, it has emerged that the Department for Work and Pensions spent £46.8m setting up the failing computer system at the Child Support Agency. According to a Freedom of Information disclosure, the money was paid to consultants and suppliers before the 10-year Private Finance Initiative contract was agreed with the Texan computer company EDS.

The disclosure also shows that EDS has so far been paid £149.5m, although the Government has withheld £12.1m due to the poor performance of the system.