Public Accounts Committee report summary: The cost-effective delivery of an armoured vehicle capability

Public Accounts Committee
Posted: 12/08/2011

Armoured vehicles such as tanks, reconnaissance and personnel-carrying vehicles are essential for a wide range of military tasks. Since the 1998 Strategic Defence Review, the Ministry of Defence (the Department) has attempted to acquire the vehicles it needs through a number of procurement projects. However, none of the principal armoured vehicles it requires have yet been delivered, despite the Department spending £1.1 billion since 1998, including £321 million wasted on cancelled or suspended projects. As a result there will be gaps in capability until at least 2025, making it more difficult to undertake essential tasks such as battlefield reconnaissance.

Partly as a result of this £1.1 billion failure to yet deliver any armoured vehicles, and to meet the specific military demands of operating in Iraq and Afghanistan, the Department was provided with a further £2.8 billion from the Treasury Reserve to buy Urgent Operational Requirements (UOR) vehicles. The Department has used the faster UOR process to deliver mine-resistant vehicles for operations. However, these vehicles are expensive and are designed for specific circumstances, so will not meet the wider requirements identified in the recent Strategic Defence and Security Review (SDSR). Delays to the delivery of the principal armoured vehicles have meant that other equipment, such as helicopters and other vehicles, have been used more frequently to undertake tasks such as battlefield reconnaissance and transporting personnel. Using helicopters and other vehicles in this way can be less effective and may divert expensive military assets from other essential tasks.

Over the past six years, the Department has removed £10.8 billion from armoured vehicle budgets up to 2021. Armoured vehicles projects have suffered more severe budget cuts than other equipment projects, largely because they involve lower levels of contractual commitment and are therefore easier to cut. This has left £5.5 billion available for the next ten years, which is insufficient to deliver all of the armoured vehicle programmes which are planned. The Department needs to be clearer about its priorities, and stop raiding the armoured vehicles chest every time it needs to make savings across the defence budget.

The Department acknowledges that it has been both indecisive and over-ambitious in setting vehicle requirements, and that the ways it has sought to procure armoured vehicles have been too complicated. The Department will need to set more realistic requirements in future if it is to deliver projects on time and to budget. We are also concerned that the Department was unable to identify anyone who has been held to account for the clear delivery failures. It is critical the Department has named senior staff with the necessary powers and sufficient time in post to take proper responsibility for and be held accountable for such projects.

The Department has yet to balance its defence budget fully and devise a plan to close capability gaps, despite having conducted the SDSR and two subsequent planning exercises. The Department needs to determine its armoured vehicle equipment priorities and deliver these as rapidly and cost-effectively as possible, including making an assessment of which of its existing vehicles should be retained after combat operations in Afghanistan cease.

Public Accounts Committee
Posted: 12/08/2011

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