NAO -St Athan unaffordable

NAO acknowledges DTR cost problems

The Defence Training Review (DTR) continues to face an uphill struggle to reach a finalised contract after a leaked memo from the NAO confirmed that costs and delays were continuing to increase.

The DTR is designed to consolidate training for armed forces personnel into one location, much of it conducted by private trainers rather than civilian personnel. In 2007 the Metrix consortium which is leading package 1 estimated that the costs would be £11bn.

Up until now the NAO has not weighed in on the DTR since the project was in contractual negotiations and therefore not on the government’s balance sheet. But in a letter to MP Mark Pritchard who’s constituency covers one of the training bases designated for closure if the DTR comes to fruition in St Athan, Wales, the NAO admitted that Package 1 of the contract was now unaffordable.

The provisional contract was awarded to Metrix in January 2008 but by May it had already encountered severe financial problems. According to the NAO’s letter, Metrix submitted a revised proposal in September that was less dependent on raising revenue through the sales of MoD land. If the proposal is accepted, the contract could reach financial close at some point i n 2010, two years after it was first awarded to Metrix.

The training centre was scheduled to be opened by in 2013 but with delays the contract the centre's operational date may be pushed back further.

NAO officials acknowledged that the cost of the programme had now risen to £12bn. However according to a freedom of information request provided to the PCS Union, the initial cost of the programme was £10bn not £11bn, meaning that costs have already risen by £2bn in less than three years.

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