PM breaks MoD’s main accounting rules

Prime Minister Gordon Brown has broken one of the
Ministry of
(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’

MoD aims to recruit qualified finance chief

the Financial Times story

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