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£13bn red alert for the MoD
Public sector projects, Issue 1478
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SINKING FEELING: BAE Systems’ ability to deliver boats 5-7 in the Astute class of nuclear submarines on time has attracted a ‘red warning’ from the IPA
THE government’s watchdog overseeing big public sector projects has issued warnings over the progress of several Ministry of Defence schemes, between them costing more than £13bn.

The Infrastructure and Projects Authority (IPA) published its annual report in July, complete with its “traffic light” warnings. While the red lights (indicating that “successful delivery… appears to be unachievable”) for some MoD schemes might not reflect well on our political and military decision-makers, they hardly need worry: many of the firms involved in the failing schemes are quick to hire political insiders.

The IPA gave a red mark to the Marshall programme to replace, update and run the military’s UK air traffic control. The £1.8bn, 22-year scheme missed targets and is more than two years behind schedule. French arms firm Thales runs it in conjunction with UK civil air traffic firm NATS, in the Aquila consortium.

‘Revised schedules’
According to the IPA, which reports to Number 10 and the Treasury, Aquila is struggling to do the work as planned. But it has had no trouble hiring influential peers. Lord (James) Freeman, a defence minister under John Major in the 1990s; Lord (James) Arbuthnot, a former MP and chair of the defence select committee until 2014; and Lord (Charles) Powell, a former adviser to Margaret Thatcher, all serve on Thales’s UK advisory board. Former Labour defence minister Baroness (Ann) Taylor sits on the main board of Thales.

The IPA also gave a red mark to BAE Systems’ £9.9bn Astute Boats nuclear subs scheme. Four subs have been launched since 2001 (late and over-cost), and the IPA is now warning about boats 5-7. BAE Systems hopes to deliver them to “revised but realistic schedules”.

BAE Systems is closely linked to the political and military establishment. Its head of government relations is Liam Fox’s former special adviser Oliver Waghorn, and it employs many top brass after they leave service (Eyes passim).

Warrior worries
Armoured Infantry 2026 is another project to earn a red mark. The 14-year programme’s overall cost is secret, but annual costs are between £60m and £80m. Precisely what armoured infantry is part of the plan is also secret, but one identified issue is the “Warrior capability sustainment” project. This involves Lockheed Martin modernising Warrior armoured vehicles with new turrets. It’s costing too much, and there is speculation that half the 380 vehicles might be scrapped instead of upgraded. Lord (Peter) Ricketts, who was David Cameron’s national security adviser from 2010-12, now advises Lockheed. Former Labour defence secretary Lord (John) Hutton was a Lockheed adviser until January.

The IPA also had a red mark for the £1.5bn Core Production Capability – the Rolls-Royce contract to build new nuclear reactors to power Royal Navy Dreadnought subs. The IPA says there will have to be changes to “overall funding”.

The reddest face of all surely belongs to the prolific 77-year-old Lord Powell. He advises not just Rolls-Royce and BAE Systems but Thales too, giving him an unwelcome hat-trick. Treble foul-ups all round!

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