Ministry of Defence forced to pay £1.4bn to company responsible for faulty tanks
21 February 2023, 18:59
The Ministry of Defence has been told to pay a US defence company £1.4bn for the long-delayed Ajax programme.
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The Ministry of Defence (MoD) has been told to hand over £1.4bn to a US defence company for the long-delayed Ajax programme.
It comes after Defence Secretary Ben Wallace demanded up to £11 billion extra for his military budget after claiming the government had "hollowed out and underfunded" the army.
The MoD signed a £5.5 billion contract with General Dynamics in 2014 in exchange for the delivery of 589 tanks.
However, Mr Wallace paused the payments two years ago after noise and vibration problems caused hearing damage to troops during trials of the vehicles.
General Dynamics said last month they were owed “roughly $1.7bn” by the end of 2022 and that it expected payments to resume in March. The American defence company claim to have fixed the noise and vibration problems.
The company was last paid in December 2020 and according to a report by the House of Commons public accounts committee, has been paid £3.2bn despite not receiving a single working vehicle since the programme began 13 years ago.
READ MORE: Government has 'hollowed out and underfunded' the British army, defence secretary Ben Wallace admits
Chancellor Jeremy Hunt is facing added pressure to invest billions more in the defence budget ahead of his Spring budget announcement on 15 March, Ben Wallace told Sky.
The British armed forces have suffered cuts for years, with Russia's invasion of Ukraine highlighting an increased need for investment and upgraded capabilities.
The Ministry of Defence listed the Ajax programme as an example of procurement scandals that indicate wasteful spending within the ministry.
Tobias Ellwood, chairman of the defence committee told the Financial Times: “The MoD pledged to only resume payments once they are satisfied with the programmes’ future trajectory. If payments are to recommence the MoD should explain to parliament and the committee exactly what has changed.”
“Russia’s invasion of Ukraine has underscored the importance of maintaining a combat-ready fleet of armoured vehicles. Our severely diminished and rapidly ageing fleet leaves us vulnerable,” he added.
