Eurofighter helps push MoD projects pounds 1bn over budget

Ministry of Defence projects are costing the taxpayer pounds 1bn more than they were originally budgeted for, according to a report published today, writes Chris Blackhurst.

A study from the National Audit Office, the public spending watchdog, reveals that excluding Trident, the 24 largest MoD contracts have over-spent by pounds 1bn. Worst offender is the Eurofighter, which has over- run by pounds 573m.

The joint British, German, Italian and Spanish aircraft programme had been reckoned to be pounds 126m over budget. That figure has since risen by a further pounds 447m - due to changes and Germany's withdrawal from part of the project.

Next is the updating of the Tornado combat aircraft with more sophisticated weapons and navigation systems which cost pounds 267m more than envisaged. The job, the NAO says, is proving more complex than thought. Likewise, the Boxer communications network for the RAF and Navy is pounds 125m over-budget.

Equally worrying are delays to the projects. In all, 20 of the 24 orders are running late. Boxer was set to come into service in December 1992 and is now not expected to become operational until June 1996; the new Spearfish torpedo has been delayed by nearly six years; and the Rapier air defence system has been put back five years.

On average, the NAO says, projects are taking 32 months longer than planned. And the delays are getting worse; only 13 per cent of projects are on target this year.

The NAO report highlights over- optimism and calls for 'greater realism' from the MoD when reaching estimates. In future, officials should pay more attention to what happened on previous contracts.