From todays Telegraph MoD damned over project delays By Michael Smith, Defence Correspondent (Filed: 28/07/2004) The armed Forces face "unacceptable" cuts, cancellations and delays in vital equipment projects because of cost overruns of more than £3 billion in the past year alone, the Commons defence committee said yesterday. In a damning report, the MPs denounced attempts to change the way in which the Ministry of Defence procures new equipment as "woeful" and said the Armed Forces were being let down by "endemic" and "systemic" failings. Eurofighter: delivery of second batch of planes still uncertain The report comes only days after Geoff Hoon, the Defence Secretary, announced wholesale cuts in the forces, estimated to be worth between £1.2 billion and £2 billion, including the loss of the RAF's entire fleet of Jaguar ground attack aircraft, 14 Royal Navy vessels, four Army battalions and more than 20,000 jobs. The committee expressed concern at the progress of a series of equipment projects, including the Royal Navy's aircraft carriers and submarines, the Army's armoured vehicles and the RAF's Eurofighters. The MPs' criticism is particularly damaging to Mr Hoon because he justified last week's cuts on the basis that "older" pieces of equipment were being got rid of in order to provide funds to ensure that the new projects went ahead. Further cuts are expected over the next year after a series of reviews of training bases and airfields, and the release of details of reductions in the services' helicopter fleets. The MoD had been far too optimistic in announcing in-service dates for new equipment, including aircraft carriers and Future Rapid Effects System armoured vehicles, the MPs said. They expressed concern about possible delays to the introduction of the Joint Strike Fighter which will fly off the carriers and is currently too heavy to carry out its short take-off, vertical landing role. The committee told the MoD that it must act now to place the order for the second tranche of 89 Eurofighters, amid veiled threats from within the multinational consortium building the aircraft to sue the UK over delays. Britain is already committed to buying the fighter but is holding up production by refusing to pay, a decision the manufacturers say could lead to costly redundancies which, under the contract, the UK would have to fund. The report, written before last week's cuts were announced, said that even on "the somewhat optimistic assumption" that there were no further slippages the major new equipment projects would be delayed on average by 18 months. "The performance of the Defence Procurement Agency in 2002-2003 can only be described as woeful," it said. "We are forced to conclude that our Armed Forces have been let down by the organisation tasked with equipping them." The MPs were scathing of the MoD's attempts to implement a system known as "smart acquisition" to save money and improve the procurement process, saying that only one of seven parts of the procedure had been put in place. They bluntly dismissed MoD claims that it had saved £2 billion by introducing "smart acquisition", saying that they had "no confidence in the reliability of this estimate". Lord Bach, Defence Procurement Minister, admitted to the committee that there were "some things that have been endemically wrong for some time that we have still not sorted out". There was a "climate of fear" among the project leaders at the Defence Procurement Agency that had led to many not reporting the full extent of the problems they faced, the committee concluded. Combined with an "ineffective" internal review system, this had resulted in serious problems and delays with important projects such as the new Astute submarines "being hidden or going undetected". The report criticised the MoD over the damage done to its relationship with companies such as BAE Systems, widely seen as at an all-time low, and warned that smaller defence companies would go out of business if not treated more fairly. It also warned that protectionist measures being proposed in America were likely to damage the UK defence industry, with a real risk that relations between Britain and its closest military ally could also be harmed. Bruce George, the committee chairman, said the report highlighted "some quite staggering problems in the way that the procurement of vital defence equipment has been handled". "Our Armed Forces are having to deal with many new security challenges in conditions where they are already overstretched and under-staffed. "The last thing they need is to worry about is whether or not critical equipment will turn up on time or at all." As a man of integrity is there any doubt that this time he will resign.