MoD condemned over extra supplies
The Ministry of Defence has come under fire from a parliamentary committee for buying billions of pounds of equipment that it does not need.
Between 2009 and 2011, the MoD bought £1.5 billion of raw materials and consumable supplies - like uniforms and ammunition - more than it used, the Commons Public Accounts Committee found.
In a report, the cross-party committee of MPs said the department was "wasting significant amounts of public money" and urged it to sell off supplies with a total value of £3.4 billion which it has identified as appropriate for disposal.
By the start of last year, the department had built up an inventory of supplies with a gross value of £40.3 billion and a net value of £16.8 billion, and it was running out of storage space to put equipment due to come back from Afghanistan and Germany, found the report.
The MoD does not always dispose of items it no longer needs, the MPs found. Over £4.2 billion worth of non-explosive supplies had not moved for at least two years, and storehouses held other items in sufficient quantities to last for the next five years.
The massive stockpile has grown up over a number of years, despite warnings as far back as 1991 by spending watchdog the National Audit Office of the need for action. The MPs said they were "disappointed" that the MoD had failed to act over the past 20 years and "surprised" that it had only recently developed a strategy to tackle the problem.
Committee member Richard Bacon said: "It is unacceptable that the Ministry of Defence is wasting significant amounts of public money buying equipment and supplies that it doesn't need. It is particularly galling at a time when funding is tight and when one considers that the National Audit Office has been warning about these issues for over 20 years."
The MoD purchases, holds and uses more than 710 million items of 900,000 different types, from bullets and missiles to medical supplies, clothing and spare parts for vehicles, ships and aircraft.
But the report found that, for years, the department's purchasing system had focused on ensuring it had enough supplies to meet demand, rather than preventing over-ordering. Project teams had no incentive to limit purchasing because they were only billed for equipment when they used it.
The department is now introducing internal controls expected to reduce spending on inventory by £300 million in 2012/13 and £500 million a year by 2015. It also plans to reduce the volume of stock held by 35% in order to make room for equipment returning from Afghanistan and Germany in central depots, some of which are already at 90% capacity.
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