MoD loses track of £6bn worth of equipment

Gavin Cordon,Pa
Tuesday 05 July 2011 08:55 BST

The Ministry of Defence has been urged by MPs to get a grip of stock control problems which have left it unable to account for billions of pounds-worth of military equipment.

The Commons Defence Committee said it was "dismayed" that the National Audit Office had qualified the MoD's accounts for the fourth year in succession after it lost track of assets worth £6.3 billion - including £184 million-worth of radios.

It said the MoD must speed up its plans for sorting out the problems with its stock control system - currently expected to continue for another two to four years.

"It is alarming that the department should be unaware of the location, usability or indeed the continued existence of assets to a total value of £6.3 billion," it said.

"We recommend that the department take whatever measures are necessary to expedite the process of ensuring that it knows how much stock it has, where it is and in what condition.

"We expect to see an abbreviated timetable for achieving this, and an explanation of the measures taken to achieve it, in the response to this report."

Defence Secretary Dr Liam Fox said: "As I have repeatedly said, the Ministry of Defence has not managed its resources well for many years.

"We inherited a multi-billion pound deficit in defence from the previous government that was characterised by waste and inefficiency under Labour. That must change.

"While there are specific difficulties in managing assets in war zones across the globe, we must have better systems in place to accurately track what resources are held and where.

"I announced major defence reforms last week to deliver clearer structures and financial responsibility across the department.

"This will be implemented at pace and I wish to see demonstrable improvement in the MoD's inventory management."

Later, Mr Hammond said: "Any job losses are highly regrettable. However, Bombardier had previously advised my department that they expected to make over 1,000 redundancies at this time - regardless of the outcome of the Thameslink procurement - as several of their existing orders reach completion.

"The Thameslink procurement was set up and designed by the previous government and we are legally bound by the criteria set out at the beginning of that process. Going forward, however, we recognise that there is a need to examine the wider issue of whether the UK is making best use of the application of EU procurement rules.

"The Business Secretary (Vince Cable) and I have written to the Prime Minister on this issue and we plan to look into this issue as part of the Government's growth review."

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