Headlines: December 15th, 1998

The National Audit Office has recommended that the Ministry of Defence tighten up its systems for spending money when modifying equipment already in service.In one of its regular reports on public spending, it reports lack of control over the scope of spending, lack of clear responsibility for management of such projects, and lack of information systems capable of creating an overview of such costs.

Sir John Bourn, head of the National Audit Office, says the MOD has improved processes and now has a degree of control over the choice and management of modifications to defence equipment. But he says there is scope to better prioritise modifications, to undertake them cheaper and faster and to secure both cost and operational benefits.

To point out the potential savings, he points out that a single percentage point improvement in the use of modification resources would yield savings of more than ten million pounds a year.

The NAO found that responsibility for managing and funding modifications was sometimes shared between several stakeholders, causing delay and a failure to achieve best value for money.

It also found standardisation systems weak enough to allow, for instance, Tornado jets to be fitted with two different types of modifications.

Overall, it found only 20 per cent notification centrally of the true number of equipment defects arising across the service. Lack of this type of information led the MOD to underestimate the cost of bringing the Chinook fleet up to a common design standard by 23.6 million pounds.

‘Ministry of Defence: Modifying Defence Equipment’ is available from the NAO publications centre for 12 pounds 10 pence on 0171 873 9090.