MoD wastes millions on 
equipment it does 
not need

Between 2009 and 2011, the MoD bought £1.5bn worth of raw materials and consumable supplies – like uniforms and ammunition – more than it used, the Commons Public Accounts Committee found.

In a report yesterday, the cross-party committee of MPs found that the department was “wasting significant amounts of public money” and urged it to sell off supplies with a total value of £3.4bn which it has identified as appropriate for disposal.

By the start of last year, the department had built up an inventory of supplies with a gross value of £40.3bn and a net value of £16.8bn, and it was running out of storage space to put equipment due to come back from Afghanistan and Germany, found the report.

The MoD does not always dispose of items it no longer needs, the MPs found. Over £4.2bn worth of non-explosive supplies had not moved for at least two years, and storehouses held other items in sufficient quantities to last for the next five years.

The massive stockpile has grown up over a number of years, despite warnings as far back as 1991 by spending watchdog the National Audit Office of the need for action.

The MPs said they were “disappointed” that the MoD had failed to act over the past 20 years and “surprised” that it had only recently developed a strategy to tackle the problem.

Committee member Richard Bacon said: “It is unacceptable that the Ministry of Defence is wasting significant amounts of public money buying equipment and supplies that it doesn’t need.”

The MoD purchases, holds and uses more than 710 million items of 900,000 different types, from bullets and missiles to medical supplies, clothing and spare parts for vehicles, ships and aircraft.

But the report found that, for years, the department’s purchasing system had focused on ensuring it had enough supplies to meet demand, rather than preventing over-ordering. Project teams had no incentive to limit purchasing because they were only billed for equipment when they used it.

The department is now introducing internal controls expected to reduce spending on inventory by £300m in 2012/13 and £500m a year by 2015.