Ministry of Defence : major projects report 2008, twentieth report of session 2008-09, report, together with formal minutes, oral and written evidence

"The Major Projects Report 2008" provides information on the time, cost and performance of 20 of the largest military equipment projects being undertaken by the Ministry of Defense (the Department), where the main investment decision has been taken, as well as the top 10 projects in the earlier Assessment Phase.

The Committee's conclusions include: in the last year, the 20 biggest projects suffered a further GBP 205 million of cost increases, and 96 months additional slippage.

This is the worst in-year slippage since 2003. The total forecast costs for these projects have now risen to nearly GBP 28 billion, some 12 per cent over budget.

Total slippage stands at over 40 years, a 36 per cent increase on approved timescales.

The number of Key User Requirements reported as being 'at risk' of not being met has also increased from 12 to 16 in the last year.

This is a disappointing set of results, particularly because the problems are being caused by previously identified failures such as: poor project management; a lack of realism; not identifying key dependencies; and underestimating of costs and timescales. The re occurrence of these problems suggests that the Department's latest acquisition reforms, introduced in 2001, are not yet resulting in the Department making better investment decisions or improving the execution of its defense projects.

Project delays also have a detrimental impact on operational capability and costs, in some cases forcing the Department to buy interim vehicles and continue using equipment suffering from obsolescence in Afghanistan.

Either older Hercules aircraft will have to serve beyond their planned out of service date, or other transport aircraft will have to be bought or leased to address a growing gap in capability.