Liam Fox 'must tackle failings at MoD or risk disaster'

Liam Fox was today accused of not doing enough to sort out problems at the Ministry of Defence.

Defence experts warned that national security could be put at risk unless financial mismanagement, infighting between service chiefs and civil service shortcomings were brought to an end.

The black hole in MoD procurement grew by £3.3 billion to £36 billion in Labour's last year in office, and the Commons Public Accounts Committee has now given the department two months to prove that last year's Strategic Defence and Security Review has got spending under control.

Dr Fox, the Defence Secretary, has vowed to get a grip on "fantasy projects", but senior MPs said the "cycle of failure" would continue unless the MoD addresses problems that have blighted procurement programmes for decades.

Lib-Dem former leader Paddy Ashdown argued that inadequacies at the department would be "cruelly exposed" if Britain faced a security challenge in the next three years.

"That would be very dangerous for our country," Lord Ashdown wrote in The Times, insisting the MoD was "no longer fit for purpose".

Kees van Haperen, chief executive of the UK National Defence Association - a group that lobbies for British military personnel to get the best available equipment - called on the Prime Minister to intervene.

"From a national security perspective we cannot afford for this to continue to happen," he told the Standard.

"The world is becoming more insecure by the day with events in the Middle East. It requires serious leadership by Liam Fox and David Cameron to deal with this."

Dr Fox today announced reforms to bring order to MoD finances, blaming a "culture of optimism" under Labour where projects were approved at unrealistically low prices only for costs to "mushroom" later on.

Faced with an immediate overspend of about £8.8 billion, a new Major Projects Review Board will examine the top 20 equipment programmes every three months to ensure they are on budget and on time. Firms failing to deliver could be named and shamed.

In a speech to the think tank Civitas, Dr Fox said the MoD would no longer accept "practices that the business world would not put up with for a minute".

Commons Public Accounts Committee chairwoman Margaret Hodge said: "The MoD must demonstrate the same discipline in its defence procurement that our forces demonstrate in the field."

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