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National Audit Office Press Releases
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Carrier Strike: Supplementary Report
The NAO has today issued a supplementary report on the Carrier Strike project, having been given access to briefing papers held by the National Security Secretariat in the Cabinet Office.
As a result of its examination of this documentation, the NAO has revised the relevant part of its original value for money conclusion on the project, concluding now that the strategic policy decision to refocus investment in both the carriers and the linked combat aircraft was well-informed.
Today's report notes that it will become apparent whether the Ministry of Defence can secure value for money in implementing the strategic policy decision only when the Department fully develops and costs detailed delivery plans to support robust investment decisions, probably in late 2012.
The NAO had been denied access to the briefing papers when preparing its first report on the project (published in July 2011). Following concerns raised by the Committee of Public Accounts and in Parliament more generally, the Secretary to the Cabinet wrote to the NAO in September agreeing that it should have access to four key National Security papers relating to the Strategic Defence and Security Review decisions on Carrier Strike. The papers examined the implications for affordability, military capability and interoperability with allies of each option and were supported by detailed analyses of the industrial implications and the choice between retaining Harrier or Tornado aircraft.
Notes for Editors
National Audit Office Value for Money Conclusion on Carrier Strike (the revised part in italics)
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The Strategic Defence and Security Review was conducted over a period of five months. Relatively early on during the Review, the National Security Strategy provided a policy baseline against which to plan future force structures. The Review was conducted in parallel with the Spending Review and the likely level of funding was only agreed at the end of the process. The Ministry of Defence therefore had to identify, cost and prioritise alternative capability options in an environment of considerable uncertainty. In our view, this is not an ideal situation in which to have to take strategic decisions - including those relating to Carrier Strike. The outcome of the Strategic Defence and Security Review affects Carrier Strike in two ways, both of which could adversely affect the achievement of value for money. First, the Review is unaffordable unless there is a real terms increase in defence funding in the latter half of the decade. We are worried that the continuing difficulties the Ministry of Defence is facing in balancing its budget leaves Carrier Strike vulnerable to further changes in strategic direction as a result of broader corporate decisions taken to address this generic problem. Second, the Review decision radically changed the Carrier Strike concept and introduced a decade long capability gap. The Carrier Strike decision was part of a wider set of strategic decisions on force structures and affordability. We do not question the merits of this policy judgement and note that it was taken on an informed basis which could have given Accounting Officer for defence confidence that the overall strategic direction was sound and could offer value for money. As we look forward, taking these two elements together, we are deeply concerned, however, about the risks to the achievement of value for money on what were previously relatively mature projects with understood risks and funded mitigation plans. The Strategic Defence and Security Review decision introduced significant levels of technical, cost and schedule uncertainty, thinking on the way the carriers will be used in operation is still evolving and there are major risks reconstituting Carrier Strike capability after a decade without it. We note that the Ministry of Defence will not have matured its understanding of the consequences of implementing the Review decision until two years after it was taken. At that point, it will more fully understand whether it has been able to develop delivery plans which will enable it to achieve value for money from an investment in Carrier Strike which will significantly exceed £10 billion. |
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The NAO report Ministry of Defence: Carrier Strike (HC 1092, Session 2101-2012, 7 July 2011) is available at www.nao.org.uk/publications/1012/carrier_strike.aspx
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Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
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The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 880 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.
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