Still failing: MoD's big-budget spending rocketing upwards

By Alex Stevenson

Costs to the Ministry of Defence's (MoD) biggest projects have increased by nearly £0.5 billion in the last year.

The National Audit Office (NAO) said the 16 biggest defence projects had seen a slippage of 139 months and increase in costs of £468 million over the last 12 months.

Its report acknowledged officials faced a "difficult task" but said the MoD needed to do more to learn from previous projects.

The future strategic tanker aircraft has seen a £336 million increase in cost because of fuel price inflation, but a failure to take advantage of opportunities to cut the overall bill on the Queen Elizabeth aircraft carrier was criticised by the public spending watchdog.

NAO chief Amyas Morse said: "The continuing problems highlighted in my report show that, if it is to make the most of the money available, the department has more to do to address its longstanding issues on project performance."

Defence secretary Philip Hammond said the report showed the MoD had made "very significant strides" in recent years.

"This is like turning around a supertanker – there are years and years of financial mismanagement," he told the Today programme.

"I'm confident we're making strong progress, but we've still got an awful lot of work to do."

Shadow defence secretary Jim Murphy said troops in Afghanistan are using "less efficient equipment" and warned there are "concerning capability gaps" emerging.

"There are now serious questions over government claims to have a costed equipment programme and we must see evidence of their grand assertions," he commented.

"It is really disappointing the government have not been bolder in procurement reform to make lasting changes to provide our forces with the best possible equipment when it is needed on the frontline."

The version of the Falcon communications system being developed for use in Afghanistan, at a cost of £32 million, will now not be deployed to theatre, the NAO said.