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MoD 'wasted billions on unused supplies'
28 June 2012
The value of the ministry's 'non-explosive' inventory has increased by some £2.3bn between 2009 and 2011, and now stands at around £19.5bn, but the NAO said the MoD had failed to dispose of unused spares and supplies.
Equipment still stored included a 54-year supply of bombing equipment for the Nimrod MR2, which was retired in 2010, and six controllable propellers, worth £1.1m, for the remaining three Type 42 destroyers – all of which are due to be decommissioned in coming years.
Over £4.2bn of the MoD's non-explosive inventory has been left untouched in warehouses for at least two years, and a further £2.4bn of supplies will last at least five more years, leading to fears the storage facilities will lack capacity if spending continues unabated and equipment is returned from Afghanistan and Germany quickly.
While the MoD identified £1.4bn of inventory that could be sold or destroyed in 2010 and 2011, it was unable to say how much had been disposed of.
The NAO also found that of the £4bn of raw material and clothing inventory bought between April 2009 and March 2011, some £1.5bn has not been used.
The MoD is said to have some 710 million items in its inventory, made up of 900,000 different item types and spends around £277m storing and managing inventory every year.
While improvements are being introduced and inventory management is under review, the department is not yet focused on efficiency and lacks qualified staff, the report found. There are also said to be too few targets for managers to reach, encouraging inefficiency.
Amyas Morse, head of the National Audit Office, said: "In the current economic climate where the department is striving to make savings, it can ill afford to use resources to buy and hold unnecessary levels of stock, and it clearly does so.
"The root cause of excess stock, which the department is seeking to address, is that management and accountability structures currently fail to provide the incentives for cost-effective inventory management."
Shadow Armed Forces Minister Kevan Jones MP, said: "Ministers should be cutting from the backroom not the frontline.
"This is unacceptable waste at a time of deep defence cuts."
Defence Equipment, Support and Technology Minister Peter Luff said: "The challenge of managing and maintaining vast amounts of equipment, including explosive materials, around the world, should not be underestimated but I know that the MoD's assets must be more efficiently managed.
"That is why we are undertaking a number of initiatives to address this long-standing issue.
"We are changing the way we buy, store and dispose of equipment stocks and investing in IT systems to help us record the hundreds of thousands of items in our inventory."
HAVE YOUR SAY
28 June 2012
I would rather have too much spare kit and spares than too few.
Fears that storage facilities will lack capacity is rich considering they closed DSDC Stafford, DSDC Llangennech, and now want to close DSDC Ashchurch.
That dreaded word "efficiency" will now probably give them all the excuse they need to privatise DSDA and its vital DM group and put it out to privatisation. Crazy, like selling off DMC Marchwood.
Daniele Mandelli - Guildford
28 June 2012
Imagine the scandal in the newspapers, if an urgently required piece of equipment was not available to the Armed Forces, especially if it led to loss of life. I can understand it if a piece of equipment is not in stock (Nimrod MR2 for example), but the Type 42's (three of them) are still inservice.
Rob - Telford
28 June 2012
Why don't we hear stuff like this for other areas of public service? There's real poison going on about the MoD it seems to me.
Is it right, for example, that the (theoretically more efficient) privatised rail network receives a far greater subsidy from the public than it ever did in state control and yet the general public are fleeced year after year by increased fares under the label of "improved performance, reliability and rolling stock" yet which never delivers a better service?
I am tiring by the day of this government's "price of everything, value of nothing" approach and its deeply disturbing anti-British procurement policies which will do nothing but destroy our future industrial potential.
Oh yes, but of course, our industrial base is inefficient isn't it? At least that's what we're told to believe by ministers who wouldn't know a factory if they saw one...
Michael - Hertfordshire
28 June 2012
So what's new?
JC - UK
28 June 2012
Big sale coming up at the Army & Navy then???
Norman - UK
28 June 2012
Many of the most expensive items in the inventory are the major components procured as part of a lifetime buy when the main equipment enters service. The Type 42 propellors sound like a prime example. Tornado canopies were another, thrown up by a financially-driven asset reduction exercise in the '90s when RAB was brought in. It may well be that there's been no consumption in two years but where would you source the item if you disposed of the stock and suddenly found that it WAS required? We're not talking about tins of beans but expensive, bespoke items that may have rolled off a production line shut down many years ago. What are you going to do if a Type 42 grounds and writes off both propellors - just scrap it forthwith? The figures being bandied about here are meaningless, and yes - there is real poison going on about the MOD.
Stan - York
29 June 2012
It is easy with hindsight. What would be the loss of capability is insurance or long lead time spares where not available?
P Winter - Australia
06 August 2012
What the NAO and others have apparently failed to understand is that applying private sector standards and practices would simply lead to some very long, perhaps permanent, supply gaps. Another problem for NAO and others is identifying which items are surplus to requirements. Unless one understands ALL the uses of an item, you can't tell how important it is. No piece of multi-million £ 'kit' is much use without the operator, so getting the basics (clothes, boots, food, water etc) right is just as vital as the high-priofile kit itself.
muddler - UK