MoD 'has £4bn of unwanted supplies'
Published 28/06/2012 | 09:42
The Ministry of Defence is wasting billions of pounds of taxpayers' money on military supplies it does not need, according to a public spending watchdog.
An investigation by the National Audit Office found 54 years' worth of bomb dropping equipment from an old model of the Nimrod aircraft was being held in stock despite it being retired from service in 2010.
It also discovered a 10-year supply, excluding war reserve contingencies, of a particular size of fire-resistant coveralls even though just under 200 a year are being issued. The MoD stopped buying the garment in 2008.
Overall, the critical report found £4.2 billion worth of non-explosive stock, excluding VAT, was being held despite no demand being shown for it over the last two financial years.
Supplies and equipment are increasing and the MoD is failing to dispose of the stock it does not need, the NAO added.
Storing the supplies and spares, known as inventory, which covers everything from ammunition and missiles to clothing and medical supplies, costs £277 million in one year.
Plans to bring back the armed forces from Afghanistan by 2015 and from Germany by 2020 will heap further pressure on storage, the NAO warned. It criticised the MoD for spending money on "unnecessary" stock when the cash could be used elsewhere in government.
The NAO report found £2.9 billion went on supplies in 2010/11 and the MoD is expected to spend between £1.5 billion and £2 billion each year for the next five years.
Amyas Morse, head of the National Audit Office, said: "In the current economic climate where the department is striving to make savings, it can ill-afford to use resources to buy and hold unnecessary levels of stock, and it clearly does so.
"The root cause of excess stock, which the department is seeking to address, is that management and accountability structures currently fail to provide the incentives for cost-effective inventory management."