Ministry of Defence : major projects report 2006, forty-sixth report of session 2006-07, report, together with formal minutes, oral and written evidence

This report from the Committee of Public Accounts provides information on the time, cost and performance of the 20 largest projects of the Ministry of Defence where the main investment decision (known as Main Gate) has been taken.

This report follows on from a two volume NAO report published in November 2006 (HC 23-I/23-II, 06/07 - ISBNs 0102943745 and 0102943737: both of which are available below), into the major projects of the Ministry of Defence.Evidence was taken by the Committee based on the NAO report, covering three main issues: the impact of the cost saving measures identified by the Departmental reviews in 2005-06; the performance of individual projects; and the Department's initiatives to improve acquisition performance.The Department undertook a review of the 20 post-Main Gate projects, which reduced costs by GBP 781 million with GBP 91 million a HM Revenue & Customs rebate and GBP 242 million the result of better management of commercial and contractual arrangements.

However, GBP 448 million of the costs were reclassified as expenditure in other procurement or support budgets or towards corporate management. The re-allocations have - according to the Committee - achieved cost reductions for individual projects but do not represent a saving for the Department as a whole.Total forecast costs for the approved projects amounts to GBP 27 billion, some 11 per cent over budget.

Forecast in-service dates slipped 33 months in-year and there is a cumulative delay of 433 months for projects over their lives so far.

The Department is now placing increased emphasis on through life management of Defence projects, involving the life-cycle management of the projects, services and activities.