The Ministry of Defence (MoD) is unaware of the location of radios worth £184 million, and is unable to provide evidence of the existence and condition of assets worth £6.3 billion, says the Defence Select Committee in its report, published today, on the performance of the Ministry of Defence 2009–10. This shortfall in accounting is reflected in the decision by the National Audit Office to qualify the MoD accounts for the fourth successive year.
The committee finds it "surprising and worrying" that this year's qualification should not have been foreseen by the previous Permanent Secretary, given that it was a clear requirement on all Government departments to adopt the relevant reporting standards from 2009–10.
Chair of the Defence Committee, Rt Hon James Arbuthnot, MP, commented,
"The MoD's inability to manage existing resources makes it harder for them to request additional funding. It is also worrying that the work carried out so far to address previously-raised concerns has simply revealed how big these problems are."
The committee finds it wholly unsatisfactory that the MoD expects that their stock control problems will probably continue for another two to four years. Chair James Arbuthnot, noted,
"This is not some abstract problem existing only on paper: equipment is needed by troops in the field and proper logistics are an essential part of effective military operations."
The report notes the period of intense change that the MoD is going through. It recommends that any cuts to staffing levels must be appropriate for future business need and managed with care. The committee will study the outcomes of the report of the Defence Reform Unit - published after the report was agreed - to ensure that the MoD retains the right skills. This will need to be reflected in decisions on redundancies through voluntary exit and otherwise so that the Department is not left without the right skills and experience required for effective performance.
The committee wishes to be assured that decisions on the scrapping of assets before the end of their useful life have been made on the basis of a sound cost-benefit analysis, taking into account the savings to be achieved and the effect of the loss of capability.