Public Accounts Committee
Ministry of Defence: Managing The Defence Inventory
HC 745, Thirty-second Report of Session 2012-13 - Report, Together with Formal Minutes, Oral and Written Evidence
- House of Commons - Committee of Public Accounts
- TSO (The Stationery Office)
'Ministry of Defence: Managing The Defence Inventory (HC 745)' reports that the Ministry of Defence has not consistently disposed of stock it no longer needs or does not use regularly; the Ministry purchased an excess 38% of raw material and consumable inventory, such as clothing or ammunition, at a value of £1.5 billion, between April 2009 and March 2011.
The National Audit Office identified the need for the Ministry to improve its management of inventory as long ago as 1991, but the root causes of the problem have not been addressed.
The Ministry has failed to provide effective incentives or accountability for those responsible for ordering, retaining, and disposing of inventory. A lack of investment in information systems and professional inventory skills is also limiting the Ministry's visibility of the problems, and its ability to manage its inventory efficiently.
Internal control measures have already been introduced to prevent over-ordering of inventory, some of which are showing early signs of success. The Ministry is on track to reduce spending on inventory by £300 million in 2012-13, and aims to reduce this by a further £500 million a year within the next three years. It also plans to reduce the volume of stock it holds by 35%, to relieve pressure on central depots in advance of the anticipated return of inventory from Afghanistan and Germany.
The report concludes that the Ministry must drive change through the inventory management system, and address the root causes of ordering and holding excess stock.
|Format||Paperback||Published||28 Feb 2013|
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