MoD wastes £25m on lost gear, cancelled contracts and tax penalties

The Ministry of Defence has wasted more than £25m of taxpayers’ money on failed equipment deliveries, administrative errors and cancelled contracts over the past year, figures obtained through Freedom of Information laws by the Scottish National Party reveal.

“Fruitless” payments — where the department “receives nothing useful in return and should not have incurred the liability” — included more than £100,000 on hotel accommodation for a conference defence staff did not attend, and more than £2m in accounting blunders: fines and interest to HMRC for late or unpaid tax and national insurance, incorrect invoice categorisation, and hundreds of thousands of pounds in unclaimed recoverable VAT.

A further £5m was sunk on a cancelled plan to transport the damaged minehunter HMS Bangor aboard a heavy-lift vessel after its collision with HMS Chiddingfold off Bahrain in January 2024. The plan was cancelled “for operational reasons”, an MoD source said, amid the declining security situation in the region.

Another £1m was lost on equipment bought from an overseas supplier that was seized by foreign authorities before delivery to the UK.

The single largest item was £5.4m in “in-service support costs” for a discontinued capability, while £4.4m went to a contractor because the unavailability of government equipment and facilities delayed Submarine Delivery Agency training.

The £25m total dwarfs recent years: the MoD averaged £11m a year in fruitless payments between 2020 and 2024, and lost £9m in total between 2016 and 2019.

Dave Doogan, the SNP’s Westminster leader, said the armed forces “have been hollowed out all the while Whitehall is throwing taxpayer money up the wall”, adding: “Over £25m of our money has been blasted on payments that have delivered absolutely nothing — this is very serious and requires proper explanation.”

The MoD said it is “delivering the largest sustained increase in defence spending since the end of the Cold War, investing £298bn over the next four years”, adding that “every pound of taxpayers’ money must be spent wisely to deliver the maximum possible impact for our armed forces”.