MoD wasted £13bn of taxpayer money over 12 years, Labour research reveals

New research by the Labour Party released today reveals that the Ministry of Defence has wasted at least £13bn of taxpayers’ money since 2010, a period that has also seen major cuts to government spending on defence.

According to Labour, £4.8bn was spent on cancelled contracts, £5.6bn was invested in overspent projects and a further £2.6bn was simply written off, with a total of £4bn wasted during Ben Wallace’s time as Defence Secretary alone – though he only took up the role in July 2019.

Launching Labour’s ‘Dossier of Waste in the Ministry of Defence’, Shadow Defence Secretary John Healey said the findings show that “the MoD is a uniquely failing department” and that “ministers are failing British troops and British taxpayers”.

“The Ministry of Defence has blown billions of pounds at the same time as cutting back our armed forces,” Healey said. “Ministers have taken no serious steps to secure value for taxpayers’ money. This scale of waste is totally unacceptable.”

Labour has stressed that, if this waste had been reduced, recent and planned cuts to the defence budget could have been avoided. The government last year decided in its integrated review of security, defence, development and foreign policy to cut the Challenger 3 tank fleet by a third, from 227 to 148.

Making the case that the money wasted could have been used to strengthen the UK’s armed forces and reverse cuts, Labour has highlighted that the waste in 2019-20 alone – £406m – would have been almost enough to cover the cost of restoring the Challenger 3 fleet, estimated to cost a total of £430m.

Alternatively, the £4bn wasted during Wallace’s tenure could have been spent on four new Type 45 Destroyers, each valued at £1bn, Labour has pointed out.

The research is the latest in a series of scathing critiques of the government’s defence policy. For the last four years, the National Audit Office (NAO) has declared the defence equipment plan “unaffordable” and warned of a funding black hole in the defence budget of up to £17bn.

The House of Commons public accounts committee concluded in a report published in November 2021 that the Ministry of Defence’s procurement system is “broken” and “repeatedly wasting taxpayers’ money”.

Setting out how a Labour government would do things differently, Healey said: “A Labour government would get to grips with these deep-seated problems from day one. We would commission the NAO to conduct an across-the-board audit of MoD waste and make the MoD the first department subject to our new Office for Value for Money’s new tough spending regime.”

Labour criticised the government’s approach to defence after the integrated review was released in March last year. While welcoming an increase in capital funding and new investment in cyber, Keir Starmer highlighted that the review was built on foundations “that have been weakened over the last decade”.

Addressing the Royal United Service Institute in February 2021, Healey attacked a decade of cuts to defence spending under the Conservatives, arguing that major procurement projects have been left “at the mercy of the illusion that ‘something will turn up’ to pay for them”.