The Gulf crisis has brought to light the woeful waste and overspending at the Ministry of Defence over the past decade, reports Daniel Butler.
As Prime Minister John Major watches the country slide into recession while contemplating the prospect of war in the Gulf and the timing of the next general election, he must think ruefully of the waste at the Ministry of Defence (MoD) over the past decade. Reflecting on the "Thatcher years", it seems as if every single year was punctuated by at least one major overspend or lengthy delay with equipment.
Estimates of the cost overruns are almost impossible to pin down firmly, but most experts agree that the taxpayer has had to cough up an extra £1 billion every year over the past decade.
There were three main culprits in running up such huge bills: the Foxhunter radar system, the Nimrod early warning system and the updated Polaris missile warhead, Chevaline. Each has cost £1 billion more than planned, but the true cost is even greater than this. Nimrod has effectively been scrapped. Foxhunter was so delayed that for months the RAF's Tornado squadrons were forced to fly with cement ballast in their nose cones (earning the nickname "Blue Circle"), and the system is still plagued with problems. Last, Chevaline's whole purpose (of a multi-warhead penetration of Moscow's anti-missile defences) now appears dated.
There have, however, been many more overruns than these. Most recently the Ministry of Defence ran into heavy criticism from the House of Commons Select Committee on Defence for failing to protect stores from the risk of fire and for squandering public funds on its submarine fleet. Two Churchill-class hunter killers were suddenly decommissioned halfway through a £200 million refit, supposedly after cracks were found in their reactors. Two more, HMS Courageous and HMS Valiant, spent almost all of 1990 in port, and doubts linger over the rest of the fleet.
A National Audit Office report last March criticised nine projects for overspending. These were the EH101 Merlin helicopter (up £322 million, plus an undisclosed extra figure, five-year delay); the LAW 80 missile (£82 million, plus a classified figure and at least a five-year delay); the Warrior personnel carrier (£190 million, two-year delay); the Bates artillery engagement system (cost classified, but at least 140% over in real terms); JTIDS air defence system (£4.3 million spent on useless equipment, US software up 200% in real terms, delay five years); RAF Tristar (first batch £62 million over, two-year delay; second batch £27 million over, five-year delay); Skynet satellite (£81 million over, four-year delay); Alarm missile (classified, but at least £124 million and a four-year delay); and the Type 2400 submarine (£135 million, two to three years behind).
Most of the delays and overruns are due, according to the experts, to a messianic faith in high technology. All too often problems have been played down at the planning stage, only to emerge later. For example, with Nimrod it transpired that even microtechnology could not get the hardware to fit in the aircraft's nose cone. Political pressures have also persuaded the MoD to "build British", even when a working version exists, only to find that the home-grown model both costs more and underperforms its rival. The Foxhunter radar system, for example, developed for use against Soviet MiGs, is having problems in the Arabian desert, and there are difficulties retaining skilled technicians to maintain all types of high technology.
The cost overruns dwarf the savings that the MoD proudly introduced with competitive tendering in 1983. As Peter Southwood, an independent consultant on defence industry diversification, says: "The extent of overspending, running into billions of pounds, far exceeds the savings brought in by tendering."
While the Gulf crisis shows that Britain needs a strong military capability, it will also, perhaps, concentrate minds on the woeful inability of the MoD to contain costs. The simplest of mental calculations shows that a tighter control on defence spending would have given the Chancellor a valuable reserve to spend on tax cuts in what could well prove to be an election year.