December 13 2013 Latest news:
Annabelle Dickson, Political Editor
Tuesday, September 3, 2013
An influential group of MPs will today publish a report warning that its contract for the new Joint Strike Fighter aircraft which will be based at RAF Marham is out of control. Political editor Annabelle Dickson reports.
When the new Joint Strike Fighter Lightning II jets land on the runway at RAF Marham it will not be without a hefty price tag.
Britain’s aircraft carrier programme, which has already had a troubled road thus far, has had the rule run over it by the influential Public Accounts Committee (PAC) which concludes today the project faces further spiralling costs and is a “high risk”.
The MPs warn they are “still not convinced” that the Ministry of Defence (MoD) has a grip on the project and suggested it has “little control” over the costs of acquiring the aircraft
The Ministry of Defence has been criticised for providing “deeply-flawed information” which led to plans to switch the type of aircraft to be flown from the carriers. The move was later abandoned at a cost to taxpayers of £74 million, the National Audit Office revealed earlier this year.
Margaret Hodge MP, chair of the committee said: “This U-turn, which will cost the taxpayer at least £74 million, is the latest in an ongoing saga that has seen billions of pounds of taxpayers’ money down the drain.
“When this programme got the green light in 2007, we were supposed to get two aircraft carriers, available from 2016 and 2018, at a cost to the taxpayer of £3.65 billion.
“We are now on course to spend £5.5 billion and have no aircraft carrier capability for nearly a decade.”
But what does this mean for the Norfolk base?
Richard Bacon, MP for South Norfolk, who is a member of the committee said it was hard to answer while the aircraft was in the development process.
“In timetable terms, probably at some point it will have some impact, but it is very difficult to say exactly what the impact will be,” he added,
He said that the ability of the Ministry of Defence to do defence procurement had been a long standing problem for many many decades.
He said that it had been a “tortuous, drawn-out and expensive” process to get the Typhoon Eurofighters, which he said most people now said was a good aircraft.
“I suspect that is going to happen with the Joint Strike Fighter. The Americans will get it right eventually and we will get it right eventually.”
“All the major Western counties wrestle with the problems of defence procurment, There is something almost endemic about it. “What you are trying to do is over quite a long timescale and so by the time you have delivered it you very often want something else. So you are trying to move the goalposts as you go along.”
But what is the solution?
The PAC report said that despite having some 400 staff working on Carrier Strike project there was a risk the department was not managing the programme effectively.
In 2010 the MOD believed the cost of converting the carriers for the new aircraft would be between £500 million and £800 million. By May 2012 it had realised that the true cost would be as a high as £2 billion.
The MOD admitted that the 2010 decision was based on deeply flawed information, generated under time pressure and in secret. Officials also made incredibly basic errors such as forgetting to include the costs of VAT and inflation.
Mr Bacon said: “There are no simple solutions, But there is an enduring concern that the MOD does not have enough of the right people to help us doe these things right.
“When you read some of the mistakes, such as the cost-estimate so badly wrong that it turns out that over half the increase was due to something entirely predictable like the VAT. It does not leave one feeling comfortable that they have got a grip. There is a lot more to do.”
But he added that he did believe the MOD was fully aware of its shortcomings.
Defence Secretary, Philip Hammond, said he welcomed the PAC report.
He added: “We are currently negotiating with industry to seek to secure proper alignment between industry and the MoD over the balance of the project and so bring the costs under control, but we are doing so within the context of a contract that gives us very little negotiating leverage.”
“As the National Audit Office recognised in their report in May, the MOD acted swiftly to switch back to Short Take Off Vertical Landing Aircraft as soon as it became clear that the alternative would cost more money. In doing so, we did incur some costs, as the PAC records, of £74 million – but we did so in order to save £1.2 billion, a clear demonstration of our commitment to safeguard taxpayers’ money.”