Plans to change the fighter planes on new aircraft carriers wasted up to £74m through “basic accounting errors”, MPs have claimed in a new report.
MPs on the Public Accounts Committee said estimates were rushed through and based on wrong costings, not taking into account increases in inflation or VAT.
Margaret Hodge, chairman of the PAC, said: “The MoD has admitted that the 2010 decision was based on deeply flawed information. Officials also made incredibly basic errors such as forgetting to include the costs of VAT and inflation.
“This about turn, which will cost the taxpayer at least £74 million, is the latest in a saga that has seen billions of pounds of taxpayers’ money down the drain.”
The cost of converting the carriers for new aircraft is expected to be up to £2bn, rather than £500m to £800m, in part because officials thought that VAT would not apply.
The committee also criticised Ministry of Defence (MoD) officials for rushing into a decision to change the type of aircraft before the defence spending review in 2010.
However last year defence secretary Philip Hammond said the MoD was reverting to the jump jet version amid fears that the cost of fitting the necessary equipment was out of control. It said it had adopted the carrier variant of the Joint Strike Fighter, dropping a jump jet version of the same plane which was chosen by the previous Labour government, on cost and operational grounds.
Hammond said the MoD had “acted swiftly” to revert to the jump jets: “We did incur some costs, but we did so in order to save £1.2 billion, a clear demonstration of our commitment to safeguard taxpayers’ money.”
The MPs also found that an early warning radar system to protect the carrier would not be ready until two years after the first carrier and aircraft were delivered.