1 The failure to deliver an armoured
vehicles programme |
1. Since the 1998 Strategic Defence Review, the Department
has tried to acquire armoured vehicles through a number of programmes.
It originally intended to procure around 1,000 vehicles through
two programmes: 'TRACER' (Tactical Reconnaissance Armoured Combat
Equipment Requirement) and 'MRAV' (Multi-Role Armoured Vehicle).
However, in 2002 the Department proceeded instead with the Future
Rapid Effect System (FRES) project, and TRACER and MRAV were cancelled.
FRES aimed to supply 3,700 vehicles at a cost of £14 billion,
with planned delivery of vehicles from 2008.
2. Despite spending a total of £1.1 billion
since 1998, the Department has so far failed to deliver any of
its core vehicle projects. As well as cancelling the TRACER and
MRAV projects, the Department has, to date, been unable to deliver
FRES. The largest element of that project, FRES Utility, was indefinitely
suspended in 2008, and the FRES Scout variant is also delayed
and not expected to enter service until 2017.
In total, £321 million has been spent on projects cancelled
or indefinitely suspended, and £397 million on projects that
have yet to deliver. Only £407 million of the expenditure
since 1998 has resulted in vehicles being delivered (some 160
3. The Department admitted to us that the delivery
of armoured vehicle projects was undermined by the budget cuts
it made in an attempt to balance the overall defence budget.
Over the past six years the Department has removed £47.4
billion from its equipment programme up to 2020-21. The largest
contribution to these savings has come from reducing forecast
spend on armoured vehicles, which has fallen by £10.8 billion
over the same period.
In addition, the Department has also removed up to £1 billion
from the budget for protected vehicles, which are designed to
offer improved protection against specific threats such as roadside
4. The Accounting Officer acknowledged that if the
overall defence budget had been in balance, it would not have
been necessary to go back and cut funding from the equipment programme.
We heard that armoured vehicles projects were cancelled and delayed
primarily because funds for these projects were not contractually
5. For the procurement of its 'core' armoured vehicles,
the Department used its standard equipment acquisition process.
However, the Department accepted there had been failings in its
procurement of armoured vehicles.
The procurement process was overly complex and the Department
has suffered from a culture of setting over-ambitious requirements
- especially its desire to use cutting edge technology in its
equipment. This led
to projects which were not affordable within the funding available.
The Chief of Materiel (Land) recognised that the procurement and
requirements setting process had been "slow, lumbering and
bureaucratic - it was aiming for the stars when, as it now is,
it should have been much more pragmatic."
6. The witnesses also acknowledged that compared
to other nations, the UK has been particularly indecisive and
poor at making decisions about the equipment it wants.
The Accounting Officer told us that the Department was now starting
to do things differently, and the procurement of the Foxhound
vehicle was an example of improved procurement and requirements
setting. The Department
now accepts it does not necessarily need to use leading edge technology.
It is trying to set more realistic requirements for vehicles which
may deliver a lower capability initially, while allowing for further
upgrades through the life of the vehicle.
7. In our Major Projects Report 2010, we reported
that Senior Responsible Owners for programmes only remain in post
for short periods, typically two to three years.
We heard this was also the case for armoured vehicles.
This has resulted in poor accountability for long-term acquisition
projects, and it is consequently difficult to hold anyone responsible
for failures, delays and overspends. The Accounting Officer was
unable to identify whether anyone had paid a penalty for the failures
in the delivery of armoured vehicles projects.
2 C&AG's Report, Figure 1, p 5 Back
C&AG's Report, Figure 1, p 5 Back
C&AG's Report, para 3 and Figure 1, p 5 Back
Qq 13, 122 Back
C&AG's Report, Figure 5, p 23; Ev 15. The £10.8 billion
in armoured vehicle savings includes the £7.4 billion of
funding reductions identified in Figure 5 of the C&AG's report.
The C&AG's supplementary memorandum identifies an additional
£600 million removed as part of the Planning Round 2011 and
£2.8 billion removed during the subsequent Three-Month Exercise. Back
Qq 20, 77, C&AG's Report, Figure 7, p 32, spending on 'Vehicles
- Protected'. Back
Q 56 Back
Qq 11-12 Back
Q 25 Back
Qq 19, 49, 81-82 Back
Q 13 Back
Q 91 Back
Qq 18-19 Back
Q 55 Back
Qq 54, 87, 92 Back
Committee of Public Accounts, Twenty-third Report of Session 2010-11,
Ministry of Defence: Major Projects Report 2010, HC 687,
conclusion 3 Back
Q 5 Back
Qq 26-29 Back