Providing the UK's Carrier Strike Capability - Public Accounts Committee Contents

Conclusions and recommendations

1.  We hold departments to account for delivering value for money by considering the reports of the Comptroller and Auditor General. Our ability to do this was hampered in this case by the fact that the National Audit Office did not have access to all the information it needed when preparing its first report to the House. Ultimately access to the relevant material in the Cabinet Office was provided after sustained pressure from this Committee and others in the House of Commons. We welcome this decision. Government departments must not hinder the Comptroller and Auditor General's ability to report to Parliament by denying him prompt access to evidence he considers necessary to conclude on value for money, and the Treasury's guidance, Managing Public Money, should be revised to make this clear.

2.  To convert the ship has changed the profile of risks and costs, and the costs are not yet fully understood. The switch from the Short Take-Off and Vertical Landing (STOVL) variant of the Joint Strike Fighter to the carrier variant has reduced the technical risks associated with the STOVL aircraft. But the costs of converting the carrier for the carrier variant aircraft will not be known until December 2012, leaving the project at risk of cost growth and slippage, and there are new technical risks and challenges integrating the new aircraft with the carriers. The Department should fully understand the risks and costs within 18 months and have appropriate mitigation plans in place.[3] We will seek a further report from the National Audit Office on the project in 18 months' time.

3.  In the past the Department has entered into commercial agreements without ensuring it has sufficient budget to meet its commitments, leading to a shortfall of up to £38 billion over the next ten years. Having overcommitted its budget the Department has had to delay projects resulting in increased costs over the longer term. We welcome the assurance from the Accounting Officer that the Department will only commit to the purchase of equipment/capability when there is a confirmed allocated budget both in the short and long-term. We will hold her to this promise.

4.  In preparing options, the Department concentrated on immediate cash savings and short-term affordability, and did not focus strongly on long-term value for money. The Department's strategic planning ahead of the next SDSR in 2015 should give more weight to through-life costs and long-term value for money in evaluating procurement and delivery options.[4]

5.  The decision to withdraw the current carriers and Harrier aircraft has introduced a nine-year gap when the UK will have no Carrier Strike capability. While two carriers will be built, only one will be converted for the new aircraft. The UK will therefore have one operational carrier with a significantly reduced availability at sea. In future we expect the Department to offer us a clear explanation as to why it has reached judgements on which individual capabilities it will procure, retain or delete and for these judgements to be underpinned by robust cost and operational analyses.[5]

6.  There is no one person responsible for delivering the Carrier Strike project below the Accounting Officer. The Senior Responsible Owner (SRO) has a co-ordinating role, rather than real budgetary and implementation authority. This Committee has consistently identified the Department's weak SRO role as a systemic problem. The Department should give SROs the authority and information they need to manage the delivery of the equipment and capabilities for which they are in theory accountable.[6]


3   A similar recommendation was made in: The Major Projects Report 2009, 23rd Report of Session 2009-10, HC 338, paragraph 4. Back

4   A similar recommendation was made in: The Major Projects Report 2009, Twenty-third Report of Session 2009-10, HC 338, paragraph 6.  Back

5   Similar recommendations were made in: Management of the Typhoon Project, Thirtieth Report of Session 2010-12, HC 860, paragraphs 3 and 4. Back

6   Similar recommendations were made in: Management of the Typhoon Project, Thirtieth Report of Session 2010-12, HC 860, paragraph 8, and Accountability for Public Money, Twenty-eighth Report of Session 2010-11, HC 740, paragraph 6. Back

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© Parliamentary copyright 2011
Prepared 29 November 2011