Minister signals end to MoD 'fantasy projects'

Published on Tuesday 22 February 2011 16:27

DEFENCE Secretary Liam Fox has said that "fantasy projects" will have to end as he outlined plans to tackle financial mismanagement that blew a £36 billion hole in his department's budget.

His comments came as the Commons public accounts committee said procurement delays and overspending had to be addressed because of the Ministry of Defence's "cycle of failure".

A report from the committee said that the decision to cancel the Nimrod and withdraw the Sentinel surveillance aircraft involved the MoD accepting "greater operational risks" and writing off nearly 5bn of taxpayers' money. The committee was responding to a National Audit Office report, published in October, which said the "black hole" in MoD procurement had increased by 3.3bn in Labour's final year in office to reach around 36bn.

Dr Fox said that the defence budget had to be brought "back into balance" and senior MoD officials will ensure projects that are not properly costed do not go-ahead.

He said the decision to scrap the Nimrod MRA4 aircraft at RAF Kinloss was necessary. "These aircraft were nine years delayed. They still weren't airworthy and they still had cost the taxpayers billions of pounds. What I am doing today is to make we sure don't get another Nimrod project like that because we need to have real-time control of these projects."

Dr Fox laid the blame for overspending on the last UK Labour government, saying it had created a "conspiracy of optimism".

He said: "I have asked the MoD to ensure that no projects begin unless we're sure that there's a budget for development and in procurement and deployment, because otherwise we end up with fantasy projects which are not much more than a wish list, and that has to stop."

Committee chair Margaret Hodge warned that the MoD had to get its spending "under control" and show the "same discipline" as the UK's armed forces.