MoD loses £6bn of equipment

Published on Monday 4 July 2011 17:30

THE Ministry of Defence has admitted that it lost £6 billion worth of equipment when it filed its accounts for 2009-10.

The department, which had a 38bn black hole in its finances when the coalition came to power last year, will today be heavily criticised for its accounting in a report by the Commons defence select committee.

Among the losses are 184 million worth of radios and 586m of other military equipment, largely firearms.

Another 5.5bn of capital assets are unaccounted for.

Tory chairman of the committee James Arbuthnot said: "The MoD's inability to manage existing resources makes it harder for them to request additional funding. It is also worrying that the work carried out so far to address previously-raised concerns has simply revealed how big these problems are."

The committee said it found it wholly unsatisfactory that the MoD expected that its stock control problems would probably continue for another two to four years.

Mr Arbuthnot added: "This is not some abstract problem existing only on paper: equipment is needed by troops in the field, and proper logistics are an essential part of effective military operations."

The criticism of the MoD comes at a time when its purchasing strategy has come under scrutiny and there has been anger over admissions, revealed in The Scotsman, that the department wrote off another 6bn of equipment as a result of its strategic defence and security review.

However, this figure is also expected to increase after the MoD gives a full figure for the cost of its decision to scrap the new Nimrod aircraft.

The MoD is also making cost savings by reducing the size of the military by 18,000, which includes 11,000 redundancies. Recently, armed forces minister Nick Harvey admitted to the committee that soldiers who fought in Afghanistan this year could be among those receiving P45s, despite assurances their jobs would be safe.

Yesterday the government admitted work needed to be done to improve the accounting. Defence Secretary 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 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."