“There are two broad principles to be followed in the MOD review…The second is a cultural shift which will see a leaner and less centralised organisation combined with devolved processes which carry greater accountability and transparency.”
Liam Fox, 13 August 2010
The news that the Ministry of Defence allegedly paid a private courier more than £700 to send a a £45 pair of boots to a soldier in Northern Ireland provided a brief distraction from the phone hacking saga in this week’s Prime Minister’s Questions.
Waste at the MoD has already been in the headlines this month after the Defence Select Committee revealed that an auditor’s report had found that civil servants had lost track of equipment worth £6.3bn.
The missing assets included £184m of battlefield radios, the MPs noted.
Like their colleagues in other departments, MoD Ministers have held up the practice of outsourcing to private contractors – something pioneered by the previous Government – as the way forward in getting better value for money.
In 2007, Labour closed the MoD’s network of Regional Distribution Centres and began outsourcing the delivery of equipment to private courier firms.
The aim of the reforms were “to reduce the cost of ownership, while maintaining or improving service levels, and enhancing operational capability”.
It was something of a surprise then, when Plaid Cymru MP Elfyn Llywd told Parliament about a pair of boots ordered from an MoD logistics centre in Bicester, Oxfordshire, which were then sent by courier to Kinnegar Barracks in Northern Ireland.
The total bill presented to the taxpayer for the delivery of this “non-urgent” item? £714.18.
FactCheck contacted Mr Llwyd, the leader of the Welsh nationalist group in Westminster, and he let us see the original invoices that he says back up the story.
Mr Llwyd said the invoices were passed to him by a whistleblower keen to point out how expensive private sub-contractors can be.
The same source told him about another courier dispatched on a similar resupply mission. On that occasion, the driver didn’t know the way to the barracks that had ordered the equipment, so he drove behind a half-empty MoD truck that was making exactly the same trip.
When the MP took the matter up with Defence Minister Peter Luff in the Commons back in April, he received a surprising answer.
Despite having seen thousands of invoices submitted by private couriers over the last few years, Mr Llwyd was told that no money had paid to them since the 2007/08 financial year.
The MP disputed the figures, and on Tuesday Mr Luff issued a correction, saying: “I regret that because of an administrative error, some of the figures for payments to private couriers were omitted.”
The columns that had previously read “0” now showed that £4m has in fact been paid to the kind of people who delivered the boots over three years.
The full extent of the missing millions was not immediately clear, however, because the numbers didn’t add up: separate figures of £0.880m, £2.179m and £1.440 were said to total just £3.707m, rather than the £4.499m totted up by the FactCheck calculator.
Mr Luff repeated the assertion that he gave in his first, incorrect answer: “As a direct result of the decision to close the regional distribution centres and centralise distribution activities at Bicester and Donnington with greater use of third party logistics contractors, annual net savings of around £4m have been achieved.”
FactCheck was keen to find out whether that was still true, since the sudden appearance of more than £4m worth of courier’s bills on the books appeared to cancel out the saving.
But we were assured that, on this occasion, the Ministry really had got its sums right.
An MoD spokesman said: “”The Defence Secretary has made it very clear that we must ensure we get taxpayers’ value for money and has recently announced defence reforms to ensure we cut out waste and ensure we spend our tight resources efficiently.
“Our priority is to ensure that our Armed Forces receive the kit that they require, when they need it. If a unit needs an item urgently then we make use of couriers. We are committed to making the department more efficient and as part of this we have streamlined our distribution centres which has resulted in savings of £4 million a year.”
Mr Llywd said: “It’s quite obvious to me that there is huge waste going on here. When we are being asked to take cuts everywhere, this is not a good thing.”
At Prime Minister’s Questions, David Cameron invoked the spirit of the first Minister to take charge of the NHS, Nye Bevan, who famously remarked that a bedpan falling on a hospital floor should echo around the Palace of Westminster.
Mr Cameron said: “I know former Health Ministers wanted to hear the rattle of every bed pan and maybe I need to see the order of every pair of boots in the military.
“But I recognise the point you make and one of the things we are trying to do in the Ministry of Defence is recognise that there’s a huge amount of cost in terms of back office and logistics and we want to make that more efficient so we can actually spend money on the front line.
“The example you give is a good one. I will check it out and see if we can save some money.”
Until then, a soldier somewhere in Northern Ireland is sporting a lovingly-polished pair of boots that may be the most expensive in the Army.
By Patrick Worrall