Significant risks for front-line armed forces caused by MoD inventory failures

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The Ministry of Defence (MoD) does not have the powers needed to deal with the fragmentation of its inventory management. In a report published today, the Public Accounts Committee (PAC) warns that long-standing weaknesses remain in the management of the UK armed forces’ supplies and spares for immediate and potential use (collectively described as ‘inventory’).

Problems with inventory management can have serious knock-on consequences for those serving in the armed forces. For example, the PAC’s report highlights that the MoD failed to consider the needs of its medical operations as part of outsourcing commodity procurement to the ‘Team Leidos’ consortium. Units faced poor availability of medical inventory as a result and were supplied with items without the shelf life for longer deployments. The Royal Navy in 2022 assessed the situation as presenting a significant risk to life for its personnel if left unresolved, and in 2023 performance for medical had still not improved to the required level.

The report highlights serious issues with the MoD’s outdated inventory management systems, some of which are nearly forty years old. For instance, the Royal Navy’s base inventory system can record that an item is unserviceable, but not for what reason, meaning the MoD will not know what degree of repair it may need to be useful. The report calls for updates on measures the MoD is undertaking to improve the quality of its inventory data.

The PAC is concerned that new posts established by the MoD to bring coherence to inventory management do not have the powers needed to deal with the fragmented system, instead relying on influencing to improve the situation. While a £2.5bn project aimed at resolving historic issues faced in managing inventory is in place, the PAC is sceptical about MoD’s ability to realise these complex and ambitious plans in time, given both its patchy track record and staffing gaps of around 25% in the relevant programmes.

Given that future conflicts may require sudden surges in demand and industrial capacity, which industry may need support to provide, the report also seeks information on how the Government intends to work with industry to ensure greater resilience in its inventory management.

Chair's comments

Dame Meg Hillier MP, Chair of the Committee, said:

“Our brave armed forces personnel put themselves in harm’s way in defence of our nation, and deserve to expect that the equipment they require to do so will be there when they need it. Our Committee warned over a decade ago of waste and fragmentation in the MoD’s supply systems, and our report finds that many of those problems remain unresolved and without the right powers to address them.

We were also concerned to hear as part of our inquiry that a contract for a £515 million programme to address data gaps was awarded to a large defence prime contractor without a competitive tendering process. The MoD must of course continue to do everything in its power to address these issues at pace while ensuring value for money. Blind spots in the system must be brought into sharp focus, and lessons from the war in Ukraine and the pandemic urgently implemented to ensure resilient supply. We live in an increasingly volatile and unpredictable world. The future must not find us under-prepared.”

Further information

• Inquiry: Improving defence inventory management
• Public Accounts Committee
• About Parliament: Select committees
• Visiting Parliament: Watch committees

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