Accounting trick will undermine national security

November 29, 2011 11:54 AM

The decision to buy the F35 Lightning II C variant instead on the B model as a result of the 2010 Strategic Defence Review (SDR) has led to a cost increase that will not be known until December 2012. The decision to change the type of aircraft was taken to achieve a cost saving £3.4bn, the Public Accounts Committee (PAC) says this is just a smokescreen that will produce actual savings of £600m, deferring the other 80 per cent of costs past the department’s 10 year accounting window.

Instead of two carriers equipped with state of the art aircraft, HMS Queen Elizabeth will be equipped with aircraft and will be available at sea for just 150-200 days a year and HMS Prince of Wales is unlikely ever to launch an aircraft being mothballed when built. Since the SDR retired the previous generation of carriers earlier this year, the UK will be without a carrier capability until 2020 and will not be fully operational until 2030.

The Royal Navy recently took delivery of its first F35 for testing; unfortunately it is no longer the modal that will be used on the aircraft carriers. While the type of aircraft on order has been changed, only one of the carriers will be fitted out for use with that type of aircraft, this means the other will not only be mothballed but completely useless for the current generation of aircraft without a costly refit.

The two Queen Elizabeth class ships were originally expected to cost £3.65bn and be delivered in 2016 & 2018. The PAC says the final cost will now be more than £6bn, nearly double the original cost and the chair, Margaret Hodge, has said the final cost of the project could be £12bn over budget.

In what appears to be a worrying attempt to hide details of this failure from the public, the National Audit Office was originally blocked from receiving information they had requested to evaluate the value of the project by the MoD. The personal intervention of the Prime Minister later overturned this decision.

The MoD has been guilty for many years of ordering a large number of expensive projects at optimistic prices before deciding what they really want delivered. This has led to cancellation after heavy costs have already been incurred for some, huge cost overruns for others and delivery, in many cases, year later than planned.

The Royal Navy describes the two Queen Elisabeth class aircraft carriers as the future flagships of the nation but they represent the very worst of government procurement.The decision to buy the F35 Lightning II C variant instead on the B model as a result of the 2010 Strategic Defence Review (SDR) has led to a cost increase that will not be known until December 2012. The decision to change the type of aircraft was taken to achieve a cost saving £3.4bn, the Public Accounts Committee (PAC) says this is just a smokescreen that will produce actual savings of £600m, deferring the other 80 per cent of costs past the department’s 10 year accounting window.

Instead of two carriers equipped with state of the art aircraft, HMS Queen Elizabeth will be equipped with aircraft and will be available at sea for just 150-200 days a year and HMS Prince of Wales is unlikely ever to launch an aircraft being mothballed when built. Since the SDR retired the previous generation of carriers earlier this year, the UK will be without a carrier capability until 2020 and will not be fully operational until 2030.

The Royal Navy recently took delivery of its first F35 for testing; unfortunately it is no longer the modal that will be used on the aircraft carriers. While the type of aircraft on order has been changed, only one of the carriers will be fitted out for use with that type of aircraft, this means the other will not only be mothballed but completely useless for the current generation of aircraft without a costly refit.

The two Queen Elizabeth class ships were originally expected to cost £3.65bn and be delivered in 2016 & 2018. The PAC says the final cost will now be more than £6bn, nearly double the original cost and the chair, Margaret Hodge, has said the final cost of the project could be £12bn over budget.

In what appears to be a worrying attempt to hide details of this failure from the public, the National Audit Office was originally blocked from receiving information they had requested to evaluate the value of the project by the MoD. The personal intervention of the Prime Minister later overturned this decision.

The MoD has been guilty for many years of ordering a large number of expensive projects at optimistic prices before deciding what they really want delivered. This has led to cancellation after heavy costs have already been incurred for some, huge cost overruns for others and delivery, in many cases, year later than planned.

The Royal Navy describes the two Queen Elisabeth class aircraft carriers as the future flagships of the nation but they represent the very worst of government procurement.

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