09/12/2011 03:27 GMT | Updated 09/12/2011 05:17 GMT

Ministry Of Defence Wasted £1.1bn On Undelivered Armoured Vehicles

The Ministry of Defence has spent more than £1bn since 1998 on armoured vehicles that have never appeared, a parliamentary committee has found.

The Public Accounts Committee said is "extremely concerned" in a report released on Friday, which found that £1.1bn was spent procuring multi-functional armoured vehicles, which have never surfaced.

Among the chief causes of this vacuum of money were over-specified vehicle requirements, swathing budget cuts and money being wasted on equipment purchased to fill holes left by missing projects.

One key cause, the report said, was the MoD removing a large portion of its budgets for armoured vehicles, a total of £10.8bn until 2021. These cuts have seen the department become increasingly less capable of seeing through commitments, exemplified by the £321m spent on cancelled procurement deals since 1998.

Removing money from the budgets was a method of balancing the department books, but committee chair Margaret Hodge said that the department needed to "stop raiding the armoured vehicles chest every time it needs to make savings."

The MoD have also been given an extra £2.8bn in 'urgent operational requirements' (UORs) in order to obtain equipment to fill the gap left by the non-existent vehicles in those 13 years. The committee report states that: "The Department must avoid introducing UORs to compensate for its own poor programme and financial management," and only use them in genuine cases of emergency.

The committee also blame the MoD's current procurement strategy, with vehicles being ordered that are over-specific and not adaptable enough to be used in various combat scenarios.

Overly-specified vehicles, if not made swiftly and appropriately, become redundant and need to be replaced earlier. Buying vehicles 'off the shelf' is a cheaper and faster way to acquire technology, and the committee encouraged the MoD to do this whenever possible.

In response the report, Peter Luff, Minister for Defence Equipment, Support and Technology, said: “The armoured vehicle programme was left in a mess by the previous government. We are now sorting out their unrealistic and unaffordable plans by balancing the budget, investing real money in equipment and reforming outdated procurement practices."