The Public Accounts Committee has published a new report which, among many problems, identifies the ongoing presence of legacy IT and issues with outsourcing as major issues causing inventory challenges
The Ministry of Defence’s ageing and complex IT systems have contributed to inventory-management challenges that have created a “significant risk to life” for military personnel, according to a report from MPs.
In a report released today, Improving Defence Inventory Management, the Public Accounts Committee said that the MoD’s platforms for managing stock and deployment of key supplies “remain outdated, and the quality of its data limits its ability to understand its inventory”. The committee added that major departmental programmes to improve inventory management also “rely on the kind of complex transformation which it has had difficulty delivering in the past”.
“The MoD’s transformation plans are complex and ambitious, but its track record means we are sceptical about its ability to achieve them,” the report said. “MoD’s inventory management has faced long-standing issues with its many legacy IT systems, which have limited functionality and reinforce the fragmentation of its inventory management. We remain concerned about the quality of the MoD’s inventory data; the MoD stated that while its visibility of its inventory is generally good, its system functionality can prevent staff from having a deeper understanding of it.”
PAC asks the MoD to inform the committee how it will “ensure that the requirements of medical personnel will be properly addressed in its future inventory management arrangements” and explain “how it will resolve risks more quickly in future”.
Committee chair Dame Meg Hillier commented: “Our committee warned over a decade ago of waste and fragmentation in the MoD’s supply systems, and our report finds that many of those problems remain unresolved and without the right powers to address them. Our brave armed forces personnel put themselves in harm’s way in defence of our nation, and deserve to expect that the equipment they require to do so will be there when they need it.”
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The report also criticised the decision to outsource the supply of vital supplies of food and medicines via a logistics contract awarded to a consortium under the “Team Leidos” banner in 2015, which runs to 2028. Problems with the engagement have resulted in being deployed with out-of-date medical supplies, according to PAC.
“The MoD failed to consider the needs of its medical operations in outsourcing commodity procurement to Team Leidos and this has created significant risks for frontline personnel,” it said. “Units have faced poor availability of medical inventory and been supplied with items without sufficient shelf life for longer deployments.”
In some cases “units have carried increased operational risk because they have had to proceed without the capability to test for and treat certain medical conditions”.
In 2022, the Royal Navy assessed that, “if unresolved, the situation presented a significant risk to life for its personnel”. Yet in 2023 the “performance for medical had still not improved to the required level”, the report stated.
The issue is part of a wider problem, with the MoD “holding substantial amounts of inventory that is unserviceable, overstocked or beyond the service date of its related platform”, MPs said.
Managing an inventory of more than 740 million individual items with a net book value of £11.8bn “is a complex and dynamic task”, the report says. However, attempts by the Whitehall department to manage its inventory are hampered by “a complex organisational set-up with inefficient working practices”.
The report stated that the MoD’s chief of defence logistics and support “does not have the powers needed to deal with the fragmentation of its inventory management”, which means that they are “relying on influencing to improve inventory management”.
Responding to the report, an MoD spokesperson said: “Meeting our operational commitments and ensuring the safety of our personnel are our highest priorities, which is why we are investing millions of pounds to deliver better medical inventory management and higher medical stockpiles. We continue to make improvements to the way we manage inventory across defence, investing £2.5bn in logistic information systems and reducing the number of inventory systems to from 250 to 89 over the past 12 years.”
