Challenger tank: replacement delayed two years

Report Reveals Huge Inefficiencies in Defence Procurement

The report, published by the National Audit Office, underlines the importance of getting to grips with defence procurement. While costs for the Trident nuclear system are down, those for Eurofighter are up. And taken together, the costs of the 23 remaining programmes highlighted in the study have risen by 8.7% or £1.375 million.

Eurofighter costs are sky-high

The average delay in entry into sevice of the equipment, is now 40 months - up five months from last year's study. The new Challenger Two battle tank is some two-and-a-half years late.

The NAO also raises doubts about the effectiveness of the Royal Navy's two ageing assault ships, which are being forced to sail on well into what should have been their retirement.

The Ministry of Defence insists that new procedures are beginning to get a handle on costs, but critics say that nothing short of a cultural change must happen to prevent this latest defence review turning into a wasted opportunity.

Lord Gilbert assures listeners of BBC's Today programme that the Government will review procurement procedures Dur: 2'49"

Lord Gilbert, Minister for Defence Procurement, admits that the situation needed to be addressed urgently. He told BBC Radio's Today programme: "My boss, the Secretary of State, announced in his evidence to the House of Commons Defence Committee very recently that we were going to have a drive for what is called 'smart' procurement and see if we can bring some better business practices to bear."

Robertson: planning "ruthless examination"

The Defence Secretary, George Robertson, announced two weeks ago a "ruthless examination" of ways to improve the annual £9 billion equipment procurement programme.

The "smart procurement" initiative is designed to eliminate the cost overruns and delays that plague many equipment projects.

Procurement procedures are to be simplified, with greater reliance on commercial technologies and more emphasis on "lean" manufacturing. A special "learning from experience" cell has already been created to analyse where things have gone wrong in the past.

Liberal Democrat defence spokesman Mike Hancock blamed the last administration for the massive overspend and delays and insisted the current Labour Government should tackle the issue within six months.

The Liberal Democrat defence spokesman attacks the MoD for "bungling incompetence" on BBC Radio Dur: 2'15"

He pointed out that the £1.3 billion overspend mentioned in what he called a "devastating" report was equivalent to the extra money the Government was to spend on education over the next five years.

"We have to think that something has gone dramatically wrong here, that there is bungling incompetence in the MoD that these projects haven't been better and more strictly controlled," he told the BBC.