MOD savaged for wasting arms billions

• MOD accused of wasting money due to "smart acquisition" strategy failure

• Investigations show projects such as Eurofighter are behind budget

• Defence Secretary argues advances in technology to make up for troop shortfall and prevent further cuts

Key quote: "Given the recent pressures on our armed forces we believe such impacts would be unacceptable," - House of Commons Defence Committee

Story in full: THE Ministry of Defence was yesterday accused of wasting billions of pounds of taxpayers’ money through the botched introduction of new procedures for buying equipment.

The House of Commons Defence Committee said the MoD’s much-touted "smart acquisition" strategy had failed "on almost all counts" to deliver promised efficiency improvements.

The move was part of the government’s hi-tech strategy, which underpins the decision to slash the number of infantry regiments and was introduced in an attempt to cut spiralling defence budgets. But it resulted in average delays on major projects of 18 months and cost increases of some 3.1 billion, which would lead inevitably to cancellations or cuts in projects and delays in ordering equipment upon which the UK’s armed forces depended.

The committee report said the scale of the projected cost overruns was now so great that the impact was likely to go beyond defence procurement and lead to further cuts elsewhere in the forces.

"Given the recent pressures on our armed forces we believe such impacts would be unacceptable," the committee said.

Its investigations revealed that high-profile projects such as the Eurofighter are still likely to burst their budgets and neither the committee nor the defence industry believed that the Future Rapid Effects System of medium-weight vehicles - on which the government has pinned much of its defence planning, but much of which remains on the drawing board - could be delivered by the MoD’s 2009 deadline.

Other embarrassing failures included the new Joint Strike Fighter, destined to be used on the flagship aircraft carriers but still too heavy to be able to take off from their flight decks, and the much-heralded Watchtower system of unmanned drones, hailed by the MoD, but already behind schedule.

Last week, Geoff Hoon, the Defence Secretary, announced dramatic cuts in Britain’s armed forces, including the loss of four infantry battalions - one from Scotland - and thousands of navy and air force jobs. Scotland’s historic regiments have been told that they must reorganise into one or, at best, two new super-regiments, discarding hundreds of years of history.

Mr Hoon argued that advances in technology would make good the shortfall in troop numbers and produce savings which would prevent further drastic cuts in the armed forces, but the report from the defence committee casts serious doubt on this.

Announcing the findings, Bruce George, chairman of the committee, said: "Our report has highlighted some quite staggering problems in the way that the procurement of vital defence equipment has been handled. Our armed forces are having to deal with many new security challenges in conditions where they are already overstretched and under-staffed. The last thing they need is to worry about whether or not critical equipment will turn up on time or at all."

The system of Smart Acquisition was supposed to put an end to projects running over budget and entering service years after their original completion date, but the report suggested it had done little to change the culture of incompetence in the MoD.

Instead, the committee said, the armed forces had been let down as a result of "endemic" and "systemic" problems in the Defence Procurement Agency.

The result was that the armed forces were not receiving the equipment they needed, when they needed it, a problem which came to the fore during the war in Iraq, when troops reported shortages of vital equipment including body armour and equipment to protect them from nuclear, chemical and biological attack. Earlier this year Lieutenant Colonel James Cowan, commanding officer of the Black Watch, went on the record in an interview with The Scotsman to protest about the failure of the government to equip its troops adequately for war.

More shortages and delays could be expected, the committee warned, and it said that the "woeful" performance of the Defence Procurement Agency would take some time to reverse.

Among the specific problems identified by the committee were:

The Joint Strike Fighter, which is still too heavy to take off from the two new aircraft carriers, the design of which is still being thrashed out.

The problems could put back the introduction of the 150 JSFs, which will cost a total of 10 billion, leaving the potentially embarrassing situation of the new carriers setting to sea with no aircraft.

The current force of Sea Harriers is due to be withdrawn from Britain’s existing carriers - including HMS Illustrious, which was handed back to the Royal Navy yesterday after a major refit - by 2006.

The Eurofighter, now known as the Typhoon, which is already 54 months late. The MoD now wants to adapt the second tranche of aircraft, which have yet to be ordered, to take on multiple roles, rather than the Cold War air defence duties that they were initially expected to perform. The committee backs the move, but "finds it surprising" that the MoD considers that the changes will have little impact on the total cost of the programme.

The Future Rapid Effects System. Hailed by the MoD as the future of Britain’s land forces, the medium-weight family of vehicles designed to replace such proven stalwarts as the Challenger II main battletanks and Warrior armoured fighting vehicles - which performed so effectively in Iraq last year - is yet to make it off the drawing board.