REPORT BY THE COMPTROLLER AND AUDITOR GENERAL HC 489-II SESSION 2010–2011 15 OCTOBER 2010 Ministry of Defence The Major Projects Report 2010 Appendices and Project Summary Sheets Our vision is to help the nation spend wisely. We apply the unique perspective of public audit to help Parliament and government drive lasting improvement in public services. The National Audit Office scrutinises public spending on behalf of Parliament. The Comptroller and Auditor General, Amyas Morse, is an Officer of the House of Commons. He is the head of the National Audit Office which employs some 900 staff. He and the National Audit Office 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. Our work leads to savings and other efficiency gains worth many millions of pounds: £890 million in 2009-10. Ministry of Defence The Major Projects Report 2010 Appendices and Project Summary Sheets This volume has been published alongside a first volume comprising of – Ministry of Defence: Major Projects Report 2010 HC 489-I, Session 2010-2011 Ordered by the House of Commons This report has been to be printed on 14 October 2010 prepared under Section 6 of the National Audit Act Report by the Comptroller and Auditor General 1983 for presentation to HC 489-II Session 2010–2011 the House of Commons 15 October 2010 in accordance with Section 9 of the Act. London: The Stationery Office £35.50 Amyas Morse Comptroller and Auditor General National Audit Office 13 October 2010 © National Audit Office 2010 The text of this document may be reproduced free of charge in any format or medium providing that it is reproduced accurately and not in a misleading context. The material must be acknowledged as National Audit Office copyright and the document title specified. Where third party material has been identified, permission from the respective copyright holder must be sought. Printed in the UK for the Stationery Office Limited on behalf of the Controller of Her Majesty’s Stationery Office 2395434 10/10 19585 Contents Appendix Three Cost Performance for Assessment Phase Projects 4 Appendix Four Cost Performance for Support Projects 5 Appendix Five Summary Performance Data for the Wider Population of Projects 6 Appendix Six Project Summary Sheets 12 The National Audit Office study team For further information about the consisted of: National Audit Office please contact: Nigel Vinson, Duncan Richmond, National Audit Office Martin Wheatley, Matt Balding, Press Office Ben Bourn, Kathryn Chase, Claire Fears, 157-197 Buckingham Palace Road Nicola Hewkin, Louise Hunter, Victoria Hannah Kingsley-Smith, Jane Ng, London Rachel Nugent, Anthony Whitehead SW1W 9SP and Sarah Zacal under the direction of Tel: 020 7798 7400 Tim Banfield. Email: [email protected] This report can be found on the Website: www.nao.org.uk National Audit Office website at www.nao.org.uk/major-projects-2010 Twitter: @NAOorguk 4 Appendix Three The Major Projects Report 2010 Appendix Three Cost Performance for Assessment Phase Projects Prior to the main investment decision being made, forecast costs for Demonstration and Manufacture are for internal planning purposes only. Publicly declaring these costs limits the Department’s ability to make trade-offs and conclude satisfactory commercial arrangements. These costs are classified but disclosed to the Committee of Public Accounts to maintain public accountability. Figure 7 shows the approved and forecast cost of each Assessment Phase. Figure 7 Forecast cost of the Assessment Phase Future Rapid Effect System Indirect Fire Precision Attack Future Integrated Soldier Technology1 Helix Dabinett Operational Utility Vehicles System Joint Military Air Traffic Service Search and Rescue Helicopter Sustain Sentry Programme Military Afloat Reach and Support2 050100 150200 250 Cost (£m) Forecast cost of the Assessment Phase Approved cost of the Assesment Phase at Initial Gate NOTES 1 The forecast cost for Future Integrated Soldier Technology is for Assessment Phases 1-3. The approved costs for Assessment Phase 1 only. 2 The forecast cost of the Assessment Phase for the Maritime Afloat, Reach and Support has been classified as the information is commercially sensitive. Source: National Audit Office analysis of Departmental data The Major Projects Report 2010 Appendix Four 5 Appendix Four Cost Performance for Support Projects Although some individual approvals such as C-Vehicles are approved at the ‘not to exceed’ level, the Department continues to plan on the basis of the ‘most likely’ or expected cost. Therefore, the approval figures below represent the ‘most likely’ forecast approved to ensure comparability across each of the support projects. This is calculated by deducting the ‘Risk Differential’ factor within a support projects’ Project Summary Sheet to arrive at the most likely figure Figure( 8) Figure 8 Forecast cost of the Support Phase Astor Bowman C-Vehicle Support Vehicles 0200 400600 8001,000 1,200 1,400 Cost (£m) Forecast cost of the Support Phase Approved cost of the Support Phase NOTES 1 No formal approval was made for in-service Support Costs for the Titan & Trojan engineering tank project at their main investment decision although a Whole Life Cost of £1,051 million was included. Current forecast costs for Demonstration and Manufacture are estimated at £347 million while Support Costs are forecast at £771 million, both of which were validated by the National Audit Office. 2 C-Vehicles is a Private Finance Initiative contract, therefore the approval and forecast costs includes both Demonstration and Manufacture, and Support Costs. Source: National Audit Office analysis of Departmental data 6 Appendix Five The Major Projects Report 2010 Appendix Five Summary Performance Data for the Wider Population of Projects (Not Validated by the National Audit Office) Figure 9 In-year Cost, Timescale and Performance of the wider population of Projects Project Cost Timescale Performance Expected cost at main Forecast cost at In-Year cost variation Expected Forecast In-Year In-Service Key User Key User Key User investment decision 31 March 2010 In-Service Dates In-Service Date Date variation requirements requirements requirements (£m) (£m) (£m) at main investment at 31 March 2010 (months) Forecast Forecast ‘To be Forecast decision ‘To be met’ met (with risks)’ ‘Not to be met’ Future Strategic Tanker Aircraft 12,326 3 11,917 -46 May-14 May-14 0 9 0 0 Type 45 Destroyer 5,000 6,464 0 May-07 Jul-10 0 8 1 0 Queen Elizabeth Class Aircraft Carriers 4,085 5,900 767 Jul-15 May-16 0 9 0 0 Nimrod MRA4 2,813 3,602 -45 Apr-03 Oct-12 22 4 3 2 A400M 2,628 3,231 -54 Feb-09 Dec-15 0 9 0 0 Astute Boats 1-34 2,578 4,041 108 Jun-05 Jul-10 4 9 0 0 Future Joint Combat Aircraft 2,034 1,827 14 – – – 5 2 0 Lynx Wildcat 1,901 1,689 20 Jan-14 Jan-14 0 15 3 0 Beyond Visual Range Air-to-Air Missile 1,240 1,305 23 Sep-11 Aug-12 0 7 0 0 Watchkeeper 907 889 -6 Jun-10 Feb-11 2 10 0 1 Merlin CSP5 854 829 -17 Feb-14 Feb-14 0 10 0 0 JCA – Production Sustainment and Follow On 638 621 -17 – – – 0 0 0 Development (PSFD) phase of the JSF programme Advanced Jet Trainer 490 460 3 Jul-09 Feb-10 -5 9 0 0 Typhoon Future Capability Programme 444 445 10 Jun-12 Jun-12 0 7 0 0 Next Generation Light Anti-Armour Weapon 377 310 0 Nov-06 Apr-09 0 8 0 0 Advanced Jet Trainer – Ground Based 344 344 0 May-10 Jan-11 1 7 0 0 Training Environment Falcon Increment A 307 270 -15 Jun-10 Dec-10 1 8 1 0 Terrier 294 322 0 Sep-08 Apr-13 0 11 0 0 Seawolf MLU 282 315 -2 Sep-04 Jul-09 0 9 0 0 The Major Projects Report 2010 Appendix Five 7 Figure 9 In-year Cost, Timescale and Performance of the wider population of Projects Project Cost Timescale Performance Expected cost at main Forecast cost at In-Year cost variation Expected Forecast In-Year In-Service Key User Key User Key User investment decision 31 March 2010 In-Service Dates In-Service Date Date variation requirements requirements requirements (£m) (£m) (£m) at main investment at 31 March 2010 (months) Forecast Forecast ‘To be Forecast decision ‘To be met’ met (with risks)’ ‘Not to be met’ Future Strategic Tanker Aircraft 12,326 3 11,917 -46 May-14 May-14 0 9 0 0 Type 45 Destroyer 5,000 6,464 0 May-07 Jul-10 0 8 1 0 Queen Elizabeth Class Aircraft Carriers 4,085 5,900 767 Jul-15 May-16 0 9 0 0 Nimrod MRA4 2,813 3,602 -45 Apr-03 Oct-12 22 4 3 2 A400M 2,628 3,231 -54 Feb-09 Dec-15 0 9 0 0 Astute Boats 1-34 2,578 4,041 108 Jun-05 Jul-10 4 9 0 0 Future Joint Combat Aircraft 2,034 1,827 14 – – – 5 2 0 Lynx Wildcat 1,901 1,689 20 Jan-14 Jan-14 0 15 3 0 Beyond Visual Range Air-to-Air Missile 1,240 1,305 23 Sep-11 Aug-12 0 7 0 0 Watchkeeper 907 889 -6 Jun-10 Feb-11 2 10 0 1 Merlin CSP5 854 829 -17 Feb-14 Feb-14 0 10 0 0 JCA – Production Sustainment and Follow On 638 621 -17 – – – 0 0 0 Development (PSFD) phase of the JSF programme Advanced Jet Trainer 490 460 3 Jul-09 Feb-10 -5 9 0 0 Typhoon Future Capability Programme 444 445 10 Jun-12 Jun-12 0 7 0 0 Next Generation Light Anti-Armour Weapon 377 310 0 Nov-06 Apr-09 0 8 0 0 Advanced Jet Trainer – Ground Based 344 344 0 May-10 Jan-11 1 7 0 0 Training Environment Falcon Increment A 307 270 -15 Jun-10 Dec-10 1 8 1 0 Terrier 294 322 0 Sep-08 Apr-13 0 11 0 0 Seawolf MLU 282 315 -2 Sep-04 Jul-09 0 9 0 0 8 Appendix Five The Major Projects Report 2010 Figure 9 In-year Cost, Timescale and Performance