Vigilance can report that Defence Secretary Philip Hammond has reacted to the National Audit Office’s Major Project Review 2011 saying: “This Government inherited a black hole in the Defence budget, and the NAO has rightly welcomed the fact that we are now balancing the MOD’s books. We have got a grip on the equipment programme through the difficult decisions taken in the SDSR and radical reform of the Department.”
Secretary Hammond reveals that the trend of vast cost increases seen under the last Government has been halted, noting the 0.9 per cent overall increase this year is still too much, but it is seven times lower than the last year of the previous administration.
According to Hammond it was right to take tough decisions in the SDSR to deal with an equipment programme that was out of control. He said the Nimrod MRA4 was over eight years late, almost £800 million over budget, and had seen the unit cost of each aircraft soar by 200 per cent; with no clear idea of when the capability would be delivered.
Secretary Hammond said: “We do not agree with the NAO that the additional cost of ensuring a seamless build for both Astute and the Successor submarines could have paid for an eighth Astute. Once build and through life costs are taken into account, an extra boat would cost £1.4bn; more than stretching the programme has cost.”
He added: “So, overall, much progress has been made, but more work is needed to achieve better value for the taxpayer while providing the Armed Forces with the equipment they need. Getting this right is key to securing Britain’s defence for the future. The introduction of the Major Projects Review Board is helping ensure our biggest programmes remain on track. I intend to take a leading role in ensuring this agenda is delivered.”