MoD 'wasting money storing unnecessary supplies'
- 28 June 2012
- From the section UK
The Ministry of Defence is spending billions of pounds on storing "unnecessary" military supplies, according to the National Audit Office.
Among the stockpiles is a 54-year supply of bombing equipment for an old model of Nimrod aircraft that was retired from service in 2010, it says.
Some £4.2bn of non-explosive stock is also being held despite no demand for it in the last two years, the NAO said.
Defence Minister Peter Luff said assets "must be more efficiently managed".
In May, Defence Secretary Philip Hammond announced that the MoD had balanced its budget for the first time in a decade.
Withdrawal from Afghanistan
The NAO said storing "inventory" - everything from ammunition and missiles to clothing and medical supplies - costs £277m a year.
It said the MoD was failing to dispose of stock it did not need, citing the example of a 10-year supply, excluding war reserve contingencies, of a particular size of fire-resistant coveralls - even though fewer than 200 a year are being issued.
The MoD did stop buying the garment in 2008.
The NAO also said an estimated £12.5m was spent in 2010/11 on non-explosive inventory, even though central depots already held five years' worth of that stock.
Plans to bring UK troops - and all of their equipment - back from Afghanistan by 2015, and from Germany by 2020, will heap further pressure on storage, it warned.
Amyas Morse, head of the NAO, said: "In the current economic climate where the department is striving to make savings, it can ill-afford to use resources to buy and hold unnecessary levels of stock, and it clearly does so.
"The root cause of excess stock, which the department is seeking to address, is that management and accountability structures currently fail to provide the incentives for cost-effective inventory management."
Mr Luff said "appropriate reserves" were "essential to be able to deploy our armed forces at short notice and sustain them on operations across the world".
"The challenge of managing and maintaining vast amounts of equipment, including explosive materials, around the world should not be underestimated but I know that the MoD's assets must be more efficiently managed," he said.
"That is why we are undertaking a number of initiatives to address this long-standing issue.
"We are changing the way we buy, store and dispose of equipment stocks and investing in IT systems to help us record the hundreds of thousands of items in our inventory."
But shadow armed forces minister Kevan Jones said the NAO had uncovered "unacceptable waste at a time of deep defence cuts".
"This is yet another example of where ministers could be making real savings through reform of the MoD, but they are failing to do so due to the flawed, rushed defence review," he added.
Labour's Margaret Hodge, who chairs the public accounts committee, said: "Out of the £19.5bn of inventory the NAO reviewed, they found stock worth £6.6bn was either unused or over-ordered.
"With the planned return of armed forces and their inventory from Afghanistan by 2015, and from Germany by 2020, the ministry needs to act quickly to resolve its problems.
"But the ministry's strategy does not fully address the issues, and they lack suitably qualified staff."
The NAO report found £2.9bn was spent on supplies in 2010/11 and the MoD was expected to spend between £1.5bn and £2bn each year for the next five years.