Capita sign outside offices in Bournemouth. The company has seen its shares plunge to a 15-year low after a warning over profits, January 31, 2018. Andrew Matthews/ Press Association. All rights reserved.What a week. On Tuesday (30
Jan) the UK parliament’s independent financial watchdog described in a
withering report how the Ministry of Defence was up to £4.2bn worse off by
selling married quarters to the private company, Annington Property.
The National Audit Office said
the MoD seriously underestimated the likely rise in house prices when it made
the sale and leaseback deal with the company managed by Guy Hands’
Guernsey-based Terra Firma group. It added that the MoD was paying rent on more
than 7,000 empty houses at a cost of more than £30m a year and some homes had
been receiving “the
minimum acceptable level of maintenance”.
The MoD has an appalling
record of “outsourcing” work to private companies. On Wednesday, it emerged
that one of those companies, Capita, was in serious trouble and its share price
plummeted.
The MoD hired Capita to manage
recruitment to the army. It has repeatedly failed to meet savings targets and
its performance has been sharply criticised by senior army officers worried
about the shortfall in the number of recruits. After a damning report by the
audit office, at least the MoD last year ended its contract with Capita to
manage the country’s defence infrastructure, including airfields and training
bases.
On Thursday the National Audit
Office published another damning report on the MoD. The ministry, it said,
faced a shortfall of more than £20bn in an equipment programme it simply could
not afford. It disclosed that an extra £575m was needed for the four
“Dreadnought” nuclear weapons submarines, already estimated to cost £31bn, that
are due to replace the existing Trident fleet.
Recent record
Here are a few examples of the
MoD’s recent record. In 2010, the coalition government was warned it would cost
more to cancel plans to build a second large aircraft carrier, HMS Prince of
Wales, a sister ship to HMS Queen
Elizabeth, than to go ahead with it. That
year a fleet of half-completed
Nimrod reconnaissance and maritime defence aircraft was scrapped because of
delays and cost overruns wasting £4bn of taxpayers’ money.
A fleet of Chinook helicopters the MoD bought from
the US company, Boeing, for the SAS could only fly in clear weather because
they did not meet British safety standards.
A fleet of nuclear-powered
Astute submarines, the navy’s new Type 45 destroyers, and a secure
communications system for the army, have all been delayed or faced expensive
technical problems at huge and avoidable cost as armed forces chiefs and
weapons companies seduced star-struck ministers and civil servants into
agreeing to over-ambitious, ill-planned, or unnecessary projects. I recall a
memo by a senior but unidentified MoD official buried in the Chilcot report. He
wrote: “MoD is good at identifying
lessons, but less good at learning them”.
Extra cash
On the day last week when we
saw television footage of the horrendous pressure placed on staff at NHS
hospitals and the lack of resources for both emergency care and long-term
social care, the head of the army, General Sir Nicholas Carter, pleaded for
more money for the armed forces. He suggested that the army needed extra cash
to deploy more tanks and long-range guns in Germany.
A few days later, Gavin
Williamson, upped the ante claiming in an interview with the Telegraph that
Moscow could cause “thousands and thousands and thousands” of deaths in Britain
in attacks that would cripple the country’s infrastructure and energy supply –
a possibility that even if true could not be stopped by the two most expensive
items in the MoD’s equipment budget – nuclear weapons and aircraft carriers.
Armed forces chiefs are
desperate to persuade the Treasury and Theresa May that they need more money.
Yet the MoD does not deny estimates that a new nuclear weapons arsenal and its
new fleet of four submarines will cost at least £200bn over its planned 30-year
lifetime.
Meanwhile, more than £6bn is
being spent on the navy’s two carriers, though the MoD cannot afford more than
a handful of the ever more expensive F35 strike aircraft to fly from them.
Britain’s nuclear weapons arsenal is eating up a huge slice of the defence
budget.
Britain’s nuclear weapons are
not a credible deterrent. The aircraft carriers will be increasingly vulnerable
to long-range missiles being developed by Russia and China.
Cyber attack
The real threat facing
Britain’s security, apart from terrorism, is from cyber attacks, as Williamson
suggested albeit with the help of hyped-up rhetoric. Carter’s army is facing an
existential crisis. That is why he speaks about the need for more tanks and
guns, and “boots on the ground”, warning of a pre-emptive Russian attack across
the borderlands of the Baltic and the Balkans, if not the plains of northern
Europe.
The MoD of course has a vested
interest in exaggerating threats, in promoting concerns about a new cold war,
in order to persuade the government, MPs, and the public to give it extra
money.
The armed forces do not need
it. Its existing budget is badly skewed in favour of expensive weapons systems
and platforms irrelevant to the real threats facing Britain. It would be
perverse to spend money so desperately needed elsewhere – for the NHS, and for
education, for example. The MoD, as its persistent mishandling of its budget
has demonstrated, and this week’s reports by the audit office only confirms, is
simply not fit for purpose.
