MoD's accounting could threaten British defence capability

Failures in MoD accounting could threaten Britain's long-term defence capability, MPs have warned in a report mounting a devastating attack on the department's latest report and accounts.

The Commons Defence Committee said poor performance in the administration of service personnel and sensitive equipment is "unacceptable" after examining the third successive qualification of the department's annual accounts by the National Audit Office.

The main area of concern related to problems associated with the new Personnel Administration system, with errors delivering specialist pay totaling £268 million and a lack of evidence to show errors in accommodation and food charges of £83 million had been made good.

A key worry was the inability of the MoD to account for certain items of expensive and sensitive equipment; only 89% of the army's new £1.3 billion BOWMAN tactical communications system could be traced at year end due to problems accounting for radios in use on the battlefield.

Committee chairman James Arbuthnot said: "That the MoD could not, at a given time, account for the whereabouts of radios worth £155 million is unacceptable.

"The security implications associated with losing equipment such as this are significant; having an effective audit trail is the only way to ensure that all equipment is accounted for."

MPs asked the NAO to continue to monitor the MoD's management of stock closely.