Prime Minister Gordon Brown has broken one of the Ministry of Defence (MoD)’ main accounting rules by freeing up hundreds of millions of pounds to give a £4bn contract for two aircraft carriers the go-ahead.
However, in return the MoD has been forced to order a 'no-holds-barred' look at other defence projects which said to create new uncertainty over other contracts, the Financial Times reports.
Under the accounting changes, defence officials will be able to move some funds between the three years of the Comprehensive Spending Review and use funds allocated to annual capital spending for resource spending. This flexibility means officials can more easily delay, cancel or reconfigure commitments.
The ‘examination of the defence equipment programme’ will be ‘short and sharp’ to prioritise topline needs and squeeze savings from industry, according to defence sources.
Further reading:
Departments shun plans for 'shadow'
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