Sunday, May 17, 2009

Running Sores

Slightly held-up in the Smart Procurement Gateway

Last week brought updates on two of BOM's longest running sores: the interminable scandal of defence procurement, and the moneypit that is the 2012 Olympics.

Defence procurement scandal

The Public Accounts Committee published its annual update on the MOD's 20 largest procurement projects. And the story is all too familiar (see previous posts gathered here). Despite the introduction of a deckchair rearrangement known as Smart Procurement (don't ask), the projects have fallen even further behind schedule and gone even further over budget:

"In the last year, the 20 biggest projects suffered a further £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 £28 billion, some 12% over budget. Total slippage stands at over 40 years, a 36% 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."
A very serious implication of this incompetence is that British servicemen are being forced to fight with equipment that is obsolete and/or past its planned scrappage date. I know we've said it before, but if the Spitfire had been built to this timetable, the RAF would have had to fight the Battle of Britain with Sopwith Camels. Either that, or ask the Luftwaffe to postpone until 1980.

We should note too that the additional cost overrun has only been kept to £205m because the MOD has slashed the number of orders:

"For example, it has trimmed the number of Future Lynx helicopters being bought from 70 to 62, and delayed a number of projects, such as Future Aircraft Carrier, Future Rapid Effect System and elements of the Military Afloat Reach and Sustainability fleet auxiliary programme. We remain deeply concerned that further cost overruns in projects will result in additional reductions in current defence capability and added delays to projects..."

Of course, the scandal of defence procurement isn't just a question of delay and cost overrun: it's much worse than that. There's the whole question of fighting the last war.

As General Sir Richard Dannatt*, the head of the Army, said just last week, the government is "squandering our increasingly scarce resources on those things that are not relevant for today's requirements... At present I can only conclude that much of our planned investment in defence is at the very least of questionable relevance to the challenges we face now and will in the future."

As we've blogged many times, the £20bn we're blowing on the Cold War Eurofighter Typhoon is money that would be much better spent on kit for our boys on the North West Frontier. Along with the £1bn apiece we're spending on the new Type 45 destroyers (which according to ex-Navy man Lewis Page, will simply spend the next 20 years cruising the world hosting cocktail parties - and see BOM vid here).

2012 Olympics moneypit

The government has finally admitted that the £1bn cost of the Olympic Village will all have to come from public sources. Since we never believed their pie-in-the-sky claims that it could be privately funded, this is hardly surprising.

But what it does mean is that the "cast iron" £9.3bn budget has now been breached. Not only has the budgeted contingency fund been raided, but £268m of extra cash is being smuggled in under the guise of social housing support.

Despite this fiddle, and with 3 years still to go, the unused contingency fund is down to a mere £585m. There isn't a prayer it will be enough.

Still, there is now an obvious use for this village post-2012. A few hundred of the 2,900 apartments should be used as London accommodation for our spendthrift MPs. Stratford and Westminster are directly connected by the Jubilee Line, the village will come with built-in security, there'll be an onsite canteen, and the members could keep fit in the abandoned white elephant swimming pool. David Sparkes, British Swimming's chief executive, describes the idea as "excellent".

Could have been built for the job

PS Talking of MPs, would you stand for election as one? "Honest John clean hands" Tyler has been approached by "dissident elements" from a local Tory constituency party, suggesting he seek selection in place of the current member "who will not be standing again". But, protested an immensely flattered Tyler, surely a humble citizen such as his good self could not possibly hope to be selected - he's not even on the Z List, let alone the A List... besides, he's male, heterosexual, white, middleclass, and nearly 60. That doesn't matter at all, said the dissidents. In fact, in the current circs, not being on the Central Office list would be a positive advantage. Trust us, we could get you selected. Yeah, right. But just suppose they were right. Could Tyler possibly contemplate running as an MP? Why would he do it? Why would anyone volunteer for all the brickbats and social work entailed? Because it's a chance to do something about the terrible mess we're in, he was told. But isn't that how they all start?

*Footnote - General Sir Richard Dannatt GCB CBE MC was educated at St Lawrence College, a public school in Ramsgate. And do you know how many of the Army's top 10 officers were privately educated? Hmm? According to the PAC, it's 9. Like we blogged here, looks like the Army will always comprise Ruperts and orphans... or at least, Joannas and orphans. Thank God for the public schools, eh? Otherwise it might be all orphans.

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