MoD wrote off a total of £110m last year

The Ministry of Defence wrote off more than £110 million in losses last year, including the cost of settling a dispute over furniture and donating helmets and body armour to Uganda.

The MoD’s annual accounts also show that some £10.2m of spending in 2010-11 was counted as “fruitless payments”.

The losses come as the MoD faces 17,000 job losses due to massive cuts in its £34 billion budget following the strategic defence and security review (SDSR).

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The grounding of HMS Astute in Skye last October is expected to cost another £2.3m, the accounts show. The write-offs include a £1.7m out-of-court settlement with a furniture company at the end of a contract.

A crash involving a warhead at the Naval Air Warfare Centre at China Lake, California, cost more than £1m. This year’s losses also include a “gift” of fibre-glass helmets and body armour to the Ugandan government. It cost almost £1.7m.

Just over £57m was written off as “constructive losses” – mainly cancelled projects.

As well as the £110m lost in 2010-11, the accounts recorded further losses of £6.5m which will be signed off in future years.

They include the cost of scrapping Nimrod and the withdrawal of the Harrier fleet of jets – both announced by Defence Secretary Liam Fox in the SDSR.

An MoD spokeswoman said: “As we acknowledged in our response to the NAO’s [National Audit Office] report in June, the Ministry of Defence has not managed its resources well for many years.

“That said, the NAO has now rightly acknowledged that improvements have been made to the MoD’s inventory processes,” she added.

“The Defence Secretary recently announced major defence reforms that should see marked improvements in the MoD’s inventory management, and while these will be implemented at pace, the situation cannot be fully resolved in the short term.”