Major projects of the Ministry of Defence are three years late and in total £3b over budget. In its Annual Report the National Audit Office details where the slippage and cost escalation has taken place and analyses the causes.The Report shows a decline in the effectiveness of project management. The cost variance over the last five years shows an average increase from 2.6 to 7.5 per cent of approved costs. The time variance has moved from an average delay of 32 months to 37 months.