MoD slammed over shortfalls.

Equipment is still not arriving with the armed forces on time with 13 projects suffering from capability shortfalls, according to the government watchdog’s annual report.

Sir John Bourn’s report also revealed changes in accounting rules led to a #233m cost increase on 11 programmes, but stressed these were not linked to a rise in costs. The average delay on the MoD’s top 20 programmes rose by 12 projects, delayed by a total of 63 months.

The report showed three Royal Navy Type 45 destroyers will be pushed into service without sonar systems to meet new procurement rules, which sparked widespread criticism from defence experts. The MoD has shaken up the way it organises and goes about purchasing new equipment under its smart procurement programme, which the NAO report said had begun to improve performance.

Devolved project teams run by the Defence Procurement Agency now have to decide how to juggle between capability, cost and time to meet order requirements.

The DPA last year adopted resource accounting and budgeting in a bid to bring government accounts in line with the commercial sector.

The cost of the 20 biggest programmes had fallen by 0.2% or #78m in the year up to 30 March, but ran #2.4bn over budgets agreed by ministers.

The cost of recent projects over-ran across the year less than older projects, while reductions over the year were linked to future expenditure, with #62m saved on the Eurofighter.

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