Press Release - Major Projects Report 2004
10 November 2004
Sir John Bourn, head of the National Audit Office, reported
today that in the last year, costs on the MOD’s 20 biggest
equipment projects have increased by £1.7 billion and that these
projects have been delayed by three months each on average. The
problems on these projects show that the sensible principles of
Smart Acquisition have not been consistently applied and the NAO
expects to see more problems on these projects in future. Sir John
supports the MOD’s recent efforts to improve its performance and
warned that all parts of the department will need to work together
to achieve this.
The increase in the last year is less than the £3.1 billion
which the NAO reported last year. The total cost of these projects
is now expected to be £50 billion, which is 14 per cent higher than
originally planned.
There is little evidence that acquisition has been improving.
Many problems can be traced to the fact that the MOD has not spent
enough time and resources in the assessment phase. Projects less
than halfway through their procurement are already expected to be
delivered later or to cost more than approved. The 15 most recent
projects are moving rapidly towards their ‘not to be exceeded’
approvals and six have already breached them.
There have been some individual successes. The Successor
Identification Friend or Foe system achieved its in-service date in
March 2004 ahead of schedule and within cost. The MOD has also
taken sensible measures to address complexities in the delivery of
the Carrier Strike capability.
Sir John Bourn said today:
"There must be greater certainty as to when equipment
will be ready for service and there must be greater control of
costs. If not, some capabilities may have to be foregone or delayed
to compensate for rising costs. It is of particular concern that
newer projects are already showing increases. We are working with
the MOD and industry to identify wider good practice, and I fully
support the renewed efforts by the MOD to improve their
performance. These efforts are as important as ever."
Notes for Editors:
- Press notices and reports are available from the date of
publication on the NAO website at www.nao.org.uk.
Hard copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 64/04
All enquiries to Mark Strathdene, NAO Press Office:
Tel: 020 7798 7183
Mobile: 07748 181693