The MoD and the 'missing' £33m...

The Ministry of Defence was last night unable to explain why it spent £33m of taxpayers' money on obsolete computer hardware as part of the now infamous Eurofighter programme.

The figure comes from a report from the National Audit Office (NAO) that uncovered spiralling costs in a number of large defence procurement projects.

The report - entitled Major Projects Report 2001 - finds delays still occurring to many schemes, although the situation is better than it was a year ago.

Costs for the Eurofighter have escalated by £239m this year alone, and the plane is now on schedule to be delivered more than three years late and nearly £2bn over budget.

The report states: "The Department [the MoD] is faced with £33 million of obsolescence costs resulting from rapid changes in computer hardware technology."

The MoD could provide no spokesperson to explain what the £33m was spent on, and why the hardware had to be scrapped.

In addition, software problems caused a 12 month delay to a project to update Swiftsure and Trafalgar class submarines.

Technical factors still account for the bulk of extra costs to defence programmes - £88m this year in total - and for the bulk of the delays.

The MoD has been criticised in the past for poor procurement practices which have allowed costs to spiral out of control. In the last three years it has introduced "Smart Acquisition" to tackle the problem, and this year's NAO report shows the first signs of the impact of the new procedures.

Four out of five projects are performing either as well as or better than they were a year ago.

However the department is still making errors such as the £33m Eurofighter write-off. Senior sources close to the MoD say they are not surprised at the scale of technology write-off in the Eurofighter project, and point to a history of delays.