Ministry of Defence Annual Report and Accounts 2010-11 - Defence Committee Contents

5  Conclusion

71. For the fifth successive year, the Comptroller and Auditor General qualified the Ministry of Defence (MoD) accounts for 2010-11 for non-compliance with international reporting standards on the treatment of some contracts. He also expressed concern that the MoD could not provide adequate audit evidence for over £5.2 billion worth of certain inventory and capital spares. These problems are likely to persist until, at the very earliest, 2014-15. We believe that the repeated qualification of the MoD accounts reflects badly on the MoD's financial management. The MoD needs a clear plan or a timetable as to how and when it will achieve a clear audit opinion from the C&AG.

72. In its Annual Report and Accounts 2010-11, the MoD presented information on its performance in line with changes to government-wide reporting requirements. We found that we and the public were less well-informed than in previous years, partly because there was as yet no performance information for some indicators but also that the information provided was less useful. The MoD should review its performance reporting to identify further and more useful information which can be made available to Parliament and to the public.

73. We are shocked that 40 per cent of the redundancies of Armed Forces personnel were compulsory whereas all those of civil servants have been voluntary. We were not convinced by the reasons given for this situation by the MoD—that civil servants had generic skills and could be more readily transferred. We recommend that all those members of the Armed Forces targeted for compulsory redundancy should be given the opportunity to retrain for trades needed in the Armed Forces, in particular, pinch point trades.

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Prepared 25 January 2012