Leasing RAF planes wastes nearly £500m

#1
From The Sunday TimesAugust 31, 2008

Leasing RAF planes wastes nearly £500m
Michael Smith
The government squandered almost £500m by leasing RAF transport aircraft that it could have bought outright for less money.

The Ministry of Defence wanted to buy the four Boeing C17 Globemasters for £520m but was told by Gordon Brown, then the chancellor, to lease them because it would be cheaper.

New figures show the MoD paid a total of £769m to lease the aircraft and then had to buy them anyway for an additional £220m. The final payment was made last month, putting the total price over eight years at £989m.

The MoD’s financial problems are now so great that the prime minister has still not signed off on its spending plans for this financial year.
More on the link
http://www.timesonline.co.uk/tol/news/politics/article4641415.ece
 
#2
Skynet said:
From The Sunday TimesAugust 31, 2008

Leasing RAF planes wastes nearly £500m
Michael Smith
The government squandered almost £500m by leasing RAF transport aircraft that it could have bought outright for less money.

The Ministry of Defence wanted to buy the four Boeing C17 Globemasters for £520m but was told by Gordon Brown, then the chancellor, to lease them because it would be cheaper.

New figures show the MoD paid a total of £769m to lease the aircraft and then had to buy them anyway for an additional £220m. The final payment was made last month, putting the total price over eight years at £989m.

The MoD’s financial problems are now so great that the prime minister has still not signed off on its spending plans for this financial year.
More on the link
http://www.timesonline.co.uk/tol/news/politics/article4641415.ece
Arrse it was ever going to be cheaper! The only reason they want things on the never-never instead of outright purchase is they can have the debt offbook, allowing them to pretend that the public sector borrowing requirement is under control. Ha! These lousy twats have sold this country down the river and we and the next 2 generations will be paying off the debt. PPP? You can fucking poke it. :x
 
#3
deSTABlised said:
Skynet said:
From The Sunday TimesAugust 31, 2008

Leasing RAF planes wastes nearly £500m
Michael Smith
The government squandered almost £500m by leasing RAF transport aircraft that it could have bought outright for less money.

The Ministry of Defence wanted to buy the four Boeing C17 Globemasters for £520m but was told by Gordon Brown, then the chancellor, to lease them because it would be cheaper.

New figures show the MoD paid a total of £769m to lease the aircraft and then had to buy them anyway for an additional £220m. The final payment was made last month, putting the total price over eight years at £989m.

The MoD’s financial problems are now so great that the prime minister has still not signed off on its spending plans for this financial year.
More on the link
http://www.timesonline.co.uk/tol/news/politics/article4641415.ece
Arrse it was ever going to be cheaper! The only reason they want things on the never-never instead of outright purchase is they can have the debt offbook, allowing them to pretend that the public sector borrowing requirement is under control. Ha! These lousy twats have sold this country down the river and we and the next 2 generations will be paying off the debt. PPP? You can fucking poke it. :x
Yep - our grandchildren will be paying for these basrtewards c0ckups. We are well and truly fcuked. Link this with the Navy story and we will be lucky to play any significant part in NATO when the planet goes pear shaped! Si vis pacem para bellum!
 
#5
<Moved from other thread>

At the time I, like many others on this site and elsewhere, questioned the wisdom of leasing - it was fcuking barking and also limited IIRC our use to paved surfaces etc. Unbelievable. :x Perhaps Brown can do the decent thing, admit he was wrong and compensate the MoD's £500 million loss? (Although I would accept him falling on a very blunt and rusty sword) I suppose that really would open a can of worms given what has been squandered due to the treasury's supposed thrift. Cnuts.

Edited to add:

Reminds me of the Air Tanker thing. When we leased the C17 the argument was along the lines of not needing them for very long etc. Now we have some fcucked PFI for replacement tankers that will see them doing charter work 'when they are'nt needed by us.' Does anyone foresee that firstly we will need them an awful lot (if not tanking then on the Afghan pax run) and there won't be a spare minute. Secondly in the contract will be some small print that MoD fail to see or ignore stating:

'Each a/c will be available for charter for a minimum of xx xxxx hours per year; if this is not acheived then the MoD will compensate Theiveing Bastewards PLC at the rate of £xxx xxx per hour lost; in addition, any unscheduled use outside of the 30 day agreed notice period will incur a further £xx xxx penalty.'

All supposition of course (like many people's opposition to leasing C17...) but I am certain of one thing, MoD will get themselves shafted again. :x
 
#6
The good thing about leasing the C17, is it came with fancy anti-missile equipment and fuel tank protection. Such is the cultural mindset at the MoD, there would have been savings to have been made and careers enhanced by going at the unnecessary protection when military risk could have been used instead.....
 
#7
Flot_gear said:
Reminds me of the Air Tanker thing. When we leased the C17 the argument was along the lines of not needing them for very long etc. Now we have some fcucked PFI for replacement tankers that will see them doing charter work 'when they are'nt needed by us.' Does anyone foresee that firstly we will need them an awful lot (if not tanking then on the Afghan pax run) and there won't be a spare minute. Secondly in the contract will be some small print that MoD fail to see or ignore stating:

'Each a/c will be available for charter for a minimum of xx xxxx hours per year; if this is not acheived then the MoD will compensate Theiveing Bastewards PLC at the rate of £xxx xxx per hour lost; in addition, any unscheduled use outside of the 30 day agreed notice period will incur a further £xx xxx penalty.'

All supposition of course (like many people's opposition to leasing C17...) but I am certain of one thing, MoD will get themselves shafted again. :x
Probably true, however, the RAF has always messed up its tanker procurement. The traditional approach has been to convert obsolete aircraft into tankers. This saves a little on the initial purchase but incurs high operating costs throughout the service life. Particularly important is that one of the high costs is fuel required by the thirsty engines, this reduces the amount of fuel leftover to deliver to the aircraft being refuelled, particularly at long range.

If the RAF had not gone for a PFI this time they would have purchased an inferior aircraft for several times the price of the planned aircraft.

So even if it ends up paying 2 or 3 times the announced cost for leasing, it is probably still cheaper than letting the RAF buy and operate tankers.

Of course, competent procurement would save a fortune. But there is no point in asking for the impossible.
 
#9
Slightly misleading article. It's true that we could have bought them outright for about £600m, but you've then got to add the additional cost of seven years of maintainence and crew training that the £500m lease package covered. That would most likely push the purchase + operating cost for the first seven years up to £700m or so, about the same as the original lease plus the final purchase cost.

Where it went wrong, so I'm told, was when additional payments that had to be made to Boeing due to the increased number of hours due to ops in the sand pits. That money was wasted, but then again, it was due to two large scale multi-year wars taking place during the lease period. Last of the four was delivered in August 2001. They say timing is everything...
 
#10
Good point, J Herc is also being flown into the ground, I am sure there are many other examples. Supply lines are under threat into Afg, stand by for more C17 orders in anticipation of the ground re-supply situation becoming critical.

Let's hope they come with factory fitted protection!
 
#11
Isn't this along the same lines as other RAF aircraft? The training aircraft are civilian owned and registered, is this working out cheaper than buying the aircraft out right?

In the Army, REME are no longer allowed to repair a significant number of vehicles as they are on lease and must be sent to approved company to be repaired.

How the fcuk would we cope with anything even remotely close to WW3 when a good deal of the kit used by the forces isn't owned or looked after by the forces?
 
#13
Over the past decade or so, we in the miltary have got used to privatisation, PFIs etc.

Perhaps, as I grow older, I am getting cynical - however, it is interesting to see how many politicians, civil servants, and (some) senior military officers go on to be employed by the same private companies with whom they have negotiated cosy deals.

Defence is a national business. It is state business. Let us buy, not lease from those whose only priority is profit.
 
#14
I think nigegib has it

nigegilb said:
The good thing about leasing the C17, is it came with fancy anti-missile equipment and fuel tank protection. Such is the cultural mindset at the MoD, there would have been savings to have been made and careers enhanced by going at the unnecessary protection when military risk could have been used instead.....
Plus the not inconsiderable cost of all the servicing, air filters, tyres, brake pads, road fund tax, insurance etc.
 
#16
Winstanley said:
Over the past decade or so, we in the miltary have got used to privatisation, PFIs etc.

Perhaps, as I grow older, I am getting cynical - however, it is interesting to see how many politicians, civil servants, and (some) senior military officers go on to be employed by the same private companies with whom they have negotiated cosy deals.

Defence is a national business. It is state business. Let us buy, not lease from those whose only priority is profit.
The problem is that the system for purchasing aircraft is just as corrupt and inept and the one for leasing them.
 
#17
Biscuits_AB said:
Someone, somewhere, is lining their pockets.
I remember when the MoD told one of my SNCO's to mind his own business.The HDERU (Heavy Duty Explosive Release Unit) on the center belly pylons on the Tornado GR1 & 4's, the is a bolt that has retractable spikes to hold it in place.To remove this bolt you use a thing called an 'Inhibitor'.Now this looks like a large nut with one end closed off & a spike in the center hole.You screw the inhibitor on & the spike retracts the spikes on the bolt,allowing the bolt to be slid out.
Anyway,The MoD decided to put unit prices on all stores ordered,so one of my Sgt's in Bruggens Weapons Training Cell noticed that the price on the one made by BAe was something like £75 each yet the one made by the German company was only DM 15, about £5 in them days.All they were was a metal casting,not precision machined or anything.The only difference between the Brit & German one is the German one is painted dayglo red to make it easier to spot.
So my Sgt queried it.A reply then came down from up high,via Station Commander,OC Supply,OC Arm ect basically telling him to mind it!
Bean counters at work eh?!
 
#18
And don't forget the same thing is about to happen again with the A330 tankers, not only that but we aren't replacing current airframes 1 for 1
 
#20
spike7451 said:
Biscuits_AB said:
Someone, somewhere, is lining their pockets.
I remember when the MoD told one of my SNCO's to mind his own business.The HDERU (Heavy Duty Explosive Release Unit) on the center belly pylons on the Tornado GR1 & 4's, the is a bolt that has retractable spikes to hold it in place.To remove this bolt you use a thing called an 'Inhibitor'.Now this looks like a large nut with one end closed off & a spike in the center hole.You screw the inhibitor on & the spike retracts the spikes on the bolt,allowing the bolt to be slid out.
Anyway,The MoD decided to put unit prices on all stores ordered,so one of my Sgt's in Bruggens Weapons Training Cell noticed that the price on the one made by BAe was something like £75 each yet the one made by the German company was only DM 15, about £5 in them days.All they were was a metal casting,not precision machined or anything.The only difference between the Brit & German one is the German one is painted dayglo red to make it easier to spot.
So my Sgt queried it.A reply then came down from up high,via Station Commander,OC Supply,OC Arm ect basically telling him to mind it!
Bean counters at work eh?!
I'd suggest they stick to bean flicking but they'd probably fcuk that up!
 

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