MPs alarmed by 'missing' £6.3bn defence assets

 
Ministry of Defence Auditors qualified the Ministry of Defence's accounts for a fourth year

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MPs say an auditor's report which found the Ministry of Defence lost track of assets worth £6.3bn is "alarming".

The defence select committee said it was "worrying" that in its efforts to find out more information the MoD had just found more problems.

The MoD was accused of losing track of assets which included £184m worth of Bowman battlefield radios.

Defence Secretary Liam Fox said he had set out plans for clearer structures and financial responsibility.

The defence committee was commenting on the findings of an National Audit Office (NAO) report last year - when the spending watchdog refused to sign off the MoD's budgets for a fourth year - this time due to the department's "failure to adhere to the accounting standards required of government departments".

'Intractable' problems

The NAO flagged up a lack of evidence about the existence and value of some £6.3bn of assets - including £752m of military equipment, which includes firearms and £184m of Bowman radios.

The MPs noted that back in 2008-9, auditors had raised concerns about inventory accounts and warehouse systems and checks had been improved, but they had found that the inventory recorded did not match the stock count at 29% of locations.

Start Quote

It is alarming that the department should be unaware of the location, usability or indeed the continued existence, of assets to a total value of £6.3 billion”

End Quote Defence Select Committee

There were also "significant levels both of stock recorded on the system that could not be found on the shelves, and stock on the shelves that was unrecorded".

"The more digging that is done the more significant and intractable the problem appears to be," the defence committee said.

The MoD's director general of finance, Jon Thompson, told the committee it could be some years before the problem was resolved because of the scale of the MoD's "845,000 lines of stock, spread across 78 IT systems, covering anywhere in the world we currently have bases".

The report notes that the findings did not mean that the equipment did not exist or was not "being used usefully somewhere" - as it could be difficult keeping track of assets being used in war zones.

But the committee said it was "unacceptable, despite the difficulty of tracking assets in theatre, that the MoD cannot, at a given time, account for the whereabouts of radios worth £184m."

The MPs said there were security, as well as financial implications and added: "It is alarming that the department should be unaware of the location, usability or indeed the continued existence, of assets to a total value of £6.3 billion, including radios worth £184m."

They said it would make it harder for the MoD to ask for additional funding if it could not manage its existing assets - and said it was "wholly unsatisfactory" that the MoD expected it to take another two to four years to sort out.

Defence Secretary Liam Fox, said he had repeatedly pointed out that the MoD had not managed its resources well for years.

"We inherited a multi-billion pound deficit in defence from the previous government that was characterised by waste and inefficiency under Labour. That must change.

"While there are specific difficulties in managing assets in war zones across the globe, we must have better systems in place to accurately track what resources are held and where.

"I announced major defence reforms last week to deliver clearer structures and financial responsibility across the department. This will be implemented at pace and I wish to see demonstrable improvement in the MoD's inventory management."

At the time of the NAO report, the department said the issues had no impact on the provision of essential equipment to frontline troops.

 

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  • rate this
    +3

    Comment number 220.

    Being an ex-serviceman (I left the RAF 33 years ago), I am astounded at these figures. Each airman had to account for his issue, each married airman to account for the last single teaspoon, through to the officers holding a much larger inventory. There was an V&A (valuable and attractive) inventoryfrom which items were signed for by the individual regardless of rank, all recorded on paper!

  • rate this
    0

    Comment number 158.

    I used to write stock-control software for a living. It's not hard to keep track of your stuff... it just takes things like discipline and organisation, which one would hope the military were good at!

  • rate this
    +8

    Comment number 154.

    This is shocking and must have be an imbedded problem for a considerable amount of time. Shameful, when so many of our troops have to pay to upgrade their protective equipment from other sources.

    The only good news is that this disgrace has been finally exposed and in the public domain.

  • rate this
    +4

    Comment number 120.

    Bill, I am a serving Desk Officer who is not "killing time until my pension kicks in". The range and scope of assets I manage is immense. A lot of contracts have already been handed over to industry to manage under IOS; unfortunately, they do not fully understand the full scope of what they are taking on and cannot meet our deadlines. Additionally, the MOD has already taken the manpower savings.

  • rate this
    +14

    Comment number 90.

    Throughout the forty years of my adult life I have read this story repeatedly. The government of the day blames the previous administration and feeling smug does nothing. Those who are to blame breathe a sigh of relief.
    It is considered disloyal to critise the MOD, but it is the MOD who attack our country by tolerating this level of dishonesty. I would like to believe things will improve but...

 

Comments 5 of 10

 

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