MoD must end its equipment-buying failures, say MPs

The Nimrod A4 was cancelled as part of the government's defence review

The Ministry of Defence must prove it has sorted out its equipment-buying programme or continue its "cycle of failure", MPs have warned.

The Commons public accounts committee said procurement delays and overspending had to be addressed.

It urged the MoD to provide its forecast for implementing government money-saving demands by April.

In a speech later, Defence Secretary Liam Fox will promise that lax spending habits "will no longer be tolerated".

Last autumn's Strategic Defence and Security Review urged savings of billions of pounds by cutting back on warships, fast jet fighters and thousands of soldiers, sailors and airmen.

It included the decisions to cancel the Nimrod MRA4 plane, withdraw the Sentinel surveillance aircraft and to mothball an aircraft carrier when it has been built.

'Black hole'

The committee said the changes involved "greater operational risks" and writing off nearly £5bn of taxpayers' money.

It added: "Such decisions are never desirable. The fact that the department has been pressured to make them offers a compelling argument why it must address the problems which have affected defence procurement for decades and on which our predecessors have commented extensively.

"If it does not, the cycle of failure will continue, with badly needed capabilities being delivered later than planned and cost increases crowding other capabilities out of the equipment programme."

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.

The department has started to renegotiate a large number of contracts.

'Unrealistic'

But the committee's chairman, Labour MP Margaret Hodge, said: "In the wake of the defence review the MoD still has to spell out whether and how it has got its defence procurement budget under control.

"The MoD must demonstrate the same discipline in its defence procurement that our forces demonstrate in the field."

The MoD has not yet provided data to back up its opinion that fitting catapults and arrester wires to the Royal Navy's new aircraft carriers to allow them to carry a different type of plane will save money, said the report.

The two ships are being built at a cost of £5.2bn but as a result of decisions made in the defence review there will be no planes available for 10 years and one carrier will be mothballed almost immediately.

The committee's report said the carrier contract, signed in 2008, had set "a new benchmark in poor corporate decision-making".

During his speech to the Civitas think-tank in London on Tuesday Dr Fox is expected to "explain the dilemmas we face and outline the guiding principles of defence policy in a tightly constrained financial environment".

He will criticise the "conspiracy of optimism" at the MoD and in industry which is "based on poor cost-estimation" and "unrealistic time-scales".

Dr Fox will warn: "These practices in the MoD would simply not be tolerated in the private sector, and they will no longer be tolerated in the MoD."

He will also call for a "new, frank and honest relationship between government and industry."